CURTAIN PRINCIPLE

SPOUSES ALFONSO
DOMINGO, Respondent.
G.R. No. 195825

AND

MARIA

ANGELES

CUSI, Petitioners, vs.

LILIA

V.

February 27, 2013

RAMONA LIZA L. DE VERA, Petitioner, vs LILIA V. DOMINGO AND SPOUSES RADELIA

AND ALFRED SY, Respondents.
G.R. No. 195871
BERSAMIN, J.:
Under the Torrens system of land registration, the registered owner of realty cannot be
deprived of her property through fraud, unless a transferee acquires the property as an
innocent purchaser for value. A transferee who acquires the property covered by a reissued
owner's copy of the certificate of title without taking the ordinary precautions of honest
persons in doing business and examining the records of the proper Registry of Deeds, or who
fails to pay the full market value of the property is not considered an innocent purchaser for
value.
Under review in these consolidated appeals is the Decision promulgated on July 16,
2010,1 whereby the Court of Appeals (CA) in CA-G.R. CV No. 90452 affirmed the revised
decision rendered on March 1, 2007 by the Regional Trial Court in Quezon City (RTC) against
the petitioners and their seller.2
Antecedents
The property in dispute was a vacant unfenced lot situated in White Plains, Quezon City and
covered by Transfer Certificate of Title (TCT) No. N-165606 issued in the name of respondent
Lilia V. Domingo by the Registry of Deeds of Quezon City. It had an area of 658 square
meters.3 In July 1999, Domingo learned that construction activities were being undertaken
on her property without her consent. She soon unearthed the series of anomalous
transactions affecting her property.
On July 18, 1997, one Radelia Sy (Sy), 4 representing herself as the owner of the property,
petitioned the RTC for the issuance of a new owners copy of Domingos TCT No. N-165606,
appending to her petition a deed of absolute sale dated July 14, 1997 purportedly executed
in her favor by Domingo;5 and an affidavit of loss dated July 17, 1997,6 whereby she claimed
that her bag containing the owners copy of TCT No. N-165606 had been snatched from her
on July 13, 1997 while she was at the SM City in North EDSA, Quezon City. The RTC granted
Sys petition on August 26, 1997. 7 The Registry of Deeds of Quezon City then issued a new
owners duplicate copy of TCT No. N-165606, which was later cancelled by virtue of the deed
of absolute sale dated July 14, 1997, and in its stead the Registry of Deeds of Quezon City
issued TCT No. 186142 in Sys name.8

Sy subsequently subdivided the property into two, and sold each half by way of contract to
sell to Spouses Edgardo and Ramona Liza De Vera and to Spouses Alfonso and Maria Angeles
Cusi. The existence of the individual contracts to sell was annotated on the dorsal portion of
Sys TCT No. 186142 as Entry No. PE-8907/N-186142, 9 stating that the consideration of the
sale was P1,000,000.00 for each set of buyers, or for a total ofP2,000,000.00 for the entire
property that had an actual worth of not less than P14,000,000.00. TCT No. 186142 in the
name of Sy was then cancelled by virtue of the deeds of sale executed between Sy and
Spouses De Vera, and between Sy and Spouses Cusi, to whom were respectively issued TCT
No. 18956810 and TCT No. 189569.11 All the while, the transactions between Sy and the De
Veras, and between Sy and the Cusis were unknown to Domingo, whose TCT No. N-165606
remained in her undisturbed possession.12
It turned out that the construction activities taking place on the property that Domingo
learned about were upon the initiative of the De Veras in the exercise of their dominical and
possessory rights.
Domingo commenced this action against Sy and her spouse, the De Veras and the Cusis in
the RTC, the complaint being docketed as Civil Case No. Q-99-39312 and entitled Lilia V.
Domingo v. Spouses Radelia and Alfred Sy, Spouses Alfonso G. and Maria Angeles S. Cusi,
Spouses Edgardo M. and Ramona Liza L. De Vera, BPI Family Savings Bank and The Register
of Deeds of Quezon City, seeking the annulment or cancellation of titles, injunction and
damages. Domingo applied for the issuance of a writ of preliminary prohibitory and
mandatory injunction, and a temporary restraining order (TRO). 13 The RTC granted
Domingos application for the TRO enjoining the defendants from proceeding with the
construction activities on the property. The RTC later granted her application for the writ of
preliminary injunction.
Ruling of the RTC
On September 30, 2003, the RTC rendered a decision,14 disposing:
WHEREFORE, in view of all the foregoing judgment is hereby rendered:
(a) declaring the sale between Lilia V. Domingo and Radella Sy void and of (sic)
effect;
(b) declaring the Sps. Edgardo and Ramona Liza De Vera and Sps. Alfonso and Maria
Angeles Cusi to be purchasers in good faith and for value;
(c) lifting the writ of preliminary injunction;
(d) finding defendant Radella Sy liable to the plaintiff Lilia Domingo liable (sic) for
damages, as follows:
1. Fourteen Million Pesos (P14,000,000.00) representing the value of the
property covered by TCT No. 165606 plus legal rate of interest until fully paid;
2. One Million Pesos (P1,000,000.00) representing moral damages;

3. Five Hundred Thousand Pesos (P500,000.00) representing exemplary

damages;
4. Five Hundred Thousand Pesos (P500,000.00) representing attorneys fees;
5. Two Hundred Thousand Pesos (P200,000.00) representing litigation
expenses; and
6. Costs of Suit.
IT IS SO ORDERED.
Acting on the motions for reconsideration separately filed by Sy and Domingo, 15 the RTC
reconsidered and set aside its September 30, 2003 decision, and allowed the presentation of
rebuttal and sur-rebuttal evidence.
On March 1, 2007, the RTC rendered a new decision,16 ruling:
WHEREFORE, in view of the foregoing, Judgment is hereby rendered:
(a) Declaring the sale between Lilia Domingo and Radelia Sy void and of no effect;
(b) Declaring the Sps. Edgardo and Ramona Liza De Vera and Sps. Alfonso and Maria
Angeles Cusi not purchasers in good faith and for value;
(c) TCT Nos. 189568 and 189569 are hereby cancelled and declared Null and Void Ab
Initio;
(d) Directing the Register of Deeds of Quezon City to annotate this Order on TCT No.
189568 and 189569;
(e) TCT No. 165606 in the name of Lilia Domingo is hereby revalidated; and,
(f) Finding defendant Radelia Sy liable to the plaintiff Lilia V. Domingo liable (sic) for
damages, as follows:
1. One Million Pesos (P1,000,000.00) representing moral damages;
2. Five Hundred Thousand Pesos (P500,000.00) representing exemplary
damages;
3. Five Hundred Thousand Pesos (P500,000.00) representing attorneys fees;
4. Two Hundred Thousand Pesos (P200,000.00) representing litigation
expenses; and,
5. Costs of suit.

This Decision is without prejudice to whatever civil action for recovery and damages, the
defendants Sps. De Vera and Sps. Cusi may have against defendant Spouses Radelia and
Alfred Sy.
SO ORDERED.
Ruling of the CA
On appeal, the assignment of errors each set of appellants made was as follows:
Spouses Cusi
a) THE REGIONAL TRIAL COURT GRAVELY ERRED IN FINDING THAT DEFENDANTS
SPOUSES ALFONSO AND MARIA ANGELES CUSI ARE NOT PURCHASERS IN GOOD
FAITH AND FOR VALUE.
b) THE REGIONAL TRIAL COURT GRAVELY ERRED IN FAILING TO RESOLVE THE ISSUE
OF WHETHER OR NOT CODEFENDANTS SPOUSES RADELIA SY AND ALFRED SY ARE
LIABLE FOR SPOUSES CUSIS CROSS-CLAIM.
c) THE REGIONAL TRIAL COURT ERRED IN FAILING TO AWARD DAMAGES AND
ATTORNEYS FEES TO DEFENDANTS SPOUSES CUSI.17
Spouses Sy
a) THE TRIAL COURT A QUO ERRED IN HOLDING THAT THE SALE BETWEEN LILIA
DOMINGO AND RADELIA SY VOID AND OF NO EFFECT AND WAS PROCURRED (sic)
THROUGH FRAUDULENT MEANS.
b) THAT THE HONORABLE COURT ERRED IN AWARDING ACTUAL MORAL DAMAGES,
EXEMPLARY DAMAGES AND ATTORNEYS FEES AND LITIGATION EXPENSES THE SAME
BEING NULL AND VOID FOR BEING CONTRARY TO LAW.
c) THAT THE SAID DECISION IS CONTRARY TO LAW AND JURISPRUDENCE AND IS NOT
SUPPORTED BY EVIDENCE, AS THE SAME CONTAIN SERIOUS REVERSIBLE ERRORS
WHEN THE COURT A QUO DECLARED THAT TCT NOS. 189568 AND 189569
CANCELLED AND DECLARED NULL AND VOID AB INITIO.
d) THE INSTANT ASSAILED DECISION OF THE HONORABLE COURT HAVE (sic)
DEPRIVED DEFENDANT[S] SPOUSES SY OF THEIR BASIC CONSTITUTIONAL RIGHT TO
DUE PROCESS OF LAW.18
Spouses De Vera
a) THE LOWER COURT ERRED IN HOLDING THAT THE DE VERA SPOUSES ARE NOT
PURCHASERS IN GOOD FAITH AND NOT ENTITLED TO THE POSSESSION OF THE
PROPERTY COVERED BY TCT NO. N-189568.

b) THE LOWER COURT ALSO ERRED IN NOT AWARDING DEFENDANT-APPELLANT DE

VERA HER COUNTERCLAIMS AGAINST PLAINTIFF-APPELLEE.19
As stated, the CA promulgated its decision on July 16, 2010, affirming the RTC with
modification of the damages to be paid by the Sys to Domingo, viz:
WHEREFORE, premises considered, the instant appeal is denied. Accordingly, the Decision
dated March 1, 2007 of the Regional Trial Court is hereby AFFIRMED with the modification
on the award of damages to be paid by defendants-appellants Spouses Radelia and Alfred Sy
in favor of the plaintiff-appellee Lilia V. Domingo, to wit;
1. P500,000.00 by way of moral damages;
2. P200,000.00 by way of exemplary damages;
3. P100,000.00 as attorneys fees and litigation expenses.
SO ORDERED.20
The CA held that the sale of the property from Domingo to Sy was null and void and
conveyed no title to the latter for being effected by forging the signature of Domingo; that
Sy thereby acquired no right in the property that she could convey to the Cusis and De Veras
as her buyers; that although acknowledging that a purchaser could rely on what appeared
on the face of the certificate of title, the Cusis and De Veras did not have the status of
purchasers in good faith and for value by reason of their being aware of Sys TCT No. 186142
being a reconstituted owners copy, thereby requiring them to conduct an inquiry or
investigation into the status of the title of Sy in the property, and not simply rely on the face
of Sys TCT No. 186142; and that the Cusis and De Veras were also aware of other facts that
should further put them on guard, particularly the several nearly simultaneous transactions
respecting
the
property,
and
the
undervaluation
of
the
purchase
price
from P7,000,000.00/half to only P1,000,000.00/half to enable Sy to pay a lesser capital gains
tax.
The CA later on denied the motions for reconsideration.21
Issues
Hence, this appeal via petitions for review on certiorari by the Cusis (G.R. No. 195825) and
Ramona Liza L. De Vera22 (G.R. No. 195871).
In G.R. No. 195825, the Cusis submit the following issues: 23
I. WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN FINDING THAT
TRANSFER CERTIFICATE OF TITLE NO. 186142 REGISTERED IN THE NAME OF RADELIA
SY IS A RECONSTITUTED TITLE.
II. WHETHER OR NOT THE PETITIONERS ARE BUYERS IN GOOD FAITH AND FOR VALUE.

III. GRANTING, WITHOUT ADMITTING, THAT THE DECISION OF THE HONORABLE

COURT OF APPEALS IS CORRECT WITH RESPECT TO THE SECOND ISSUE, WHETHER
OR NOT PETITIONERS ARE ENTITLED TO REIMBURSEMENT OF ALL THE PAYMENTS
MADE BY PETITIONERS TO THEIR CODEFENDANTS SPOUSES ALFRED AND RADELIA SY
IN ADDITION TO DAMAGES AND ATTORNEYS FEES.
In G.R. No. 195871, De Vera asserts that the primordial issue is whether or not she was an
innocent purchaser for value and in good faith.
Ruling of the Court
The petitions for review are bereft of merit.
Firstly, now beyond dispute is the nullity of the transfer of Domingos property to Sy because
both lower courts united in so finding. The unanimity in findings of both the RTC and the CA
on this all-important aspect of the case is now conclusive on the Court in view of their
consistency thereon as well as by reason of such findings being fully supported by
preponderant evidence. We consider to be significant that the Sys no longer came to the
Court for further review, thereby rendering the judgment of the CA on the issue of nullity
final and immutable as to them.
Secondly, the Cusis and De Vera commonly contend that the CA gravely erred in not
considering them to be purchasers in good faith and for value. They argue that Sys TCT No.
186142 was free of any liens or encumbrances that could have excited their suspicion; and
that they nonetheless even went beyond the task of examining the face of Sys TCT No.
186142, recounting every single detail of their quest to ascertain the validity of Sys title,
but did not find anything by which to doubt her title.
The Court concurs with the finding by the CA that the Cusis and De Vera were not
purchasers for value and in good faith. The records simply do not support their common
contention in that respect.
Under the Torrens system of land registration,24 the State is required to maintain a register of
landholdings that guarantees indefeasible title to those included in the register. The system
has been instituted to combat the problems of uncertainty, complexity and cost associated
with old title systems that depended upon proof of an unbroken chain of title back to a good
root of title. The State issues an official certificate of title to attest to the fact that the person
named is the owner of the property described therein, subject to such liens and
encumbrances as thereon noted or what the law warrants or reserves. 25
One of the guiding tenets underlying the Torrens system is the curtain principle, in that one
does not need to go behind the certificate of title because it contains all the information
about the title of its holder. This principle dispenses with the need of proving ownership by
long complicated documents kept by the registered owner, which may be necessary under a
private conveyancing system, and assures that all the necessary information regarding
ownership is on the certificate of title. Consequently, the avowed objective of the Torrens
system is to obviate possible conflicts of title by giving the public the right to rely upon the
face of the Torrens certificate and, as a rule, to dispense with the necessity of inquiring

further; on the part of the registered owner, the system gives him complete peace of mind
that he would be secured in his ownership as long as he has not voluntarily disposed of any
right over the covered land.26
The Philippines adopted the Torrens system through Act No. 496, 27 also known as the Land
Registration Act, which was approved on November 6, 1902 and took effect on February 1,
1903. In this jurisdiction, therefore, "a person dealing in registered land has the right to rely
on the Torrens certificate of title and to dispense with the need of inquiring
further, except when the party has actual knowledge of facts and circumstances that would
impel a reasonably cautious man to make such inquiry".28
To obtain a grasp of whether a person has actual knowledge of facts and circumstances that
would impel a reasonably cautious man to make such inquiry, an internal matter,
necessitates an analysis of evidence of a persons conduct. 29 That renders the determination
of intent as a factual issue,30 something that the Court does not normally involve itself in
because of its not being a trier of facts. Indeed, as a rule, the review function of the Court is
limited to a review of the law involved.
But the Court now delves into the facts relating to the issue of innocence of the petitioners
in their purchase of the property, considering that the RTC, through its original decision, at
first regarded them to have been innocent purchasers who were not aware of any flaw or
defect in Sys title based on the fact that the property had been unfenced and vacant. The
RTC also regarded the petitioners making of reasonable verifications as their exercise of the
due diligence required of an ordinary buyer. 31 The RTC later completely turned around
through another decision, however, and it was such decision that the CA affirmed subject to
the modifications of the damages granted to Domingo.
There is no question that the petitioners exerted some effort as buyers to determine
whether the property did rightfully belong to Sy. For one, they did not find any encumbrance,
like a notice of lis pendens, being annotated on the TCT of Sy. Nonetheless, their observance
of a certain degree of diligence within the context of the principles underlying the Torrens
system
was not their only barometer under the law and jurisprudence by which to gauge the validity
of their acquisition of title. As the purchasers of the property, they also came under the clear
obligation to purchase the property not only in good faith but also for value.
Therein lay the problem. The petitioners were shown to have been deficient in their vigilance
as buyers of the property. It was not enough for them to show that the property was
unfenced and vacant; otherwise, it would be too easy for any registered owner to lose her
property, including its possession, through illegal occupation. Nor was it safe for them to
simply rely on the face of Sys TCT No. 186142 in view of the fact that they were aware that
her TCT was derived from a duplicate owners copy reissued by virtue of the loss of the
original duplicate owners copy. That circumstance should have already alerted them to the
need to inquire beyond the face of Sys TCT No. 186142. There were other circumstances,
like the almost simultaneous transactions affecting the property within a short span of time,
as well as the gross undervaluation of the property in the deeds of sale, ostensibly at the

behest of Sy to minimize her liabilities for the capital gains tax, that also excited suspicion,
and required them to be extra-cautious in dealing with Sy on the property.
To the Court, the CAs treatment of Sys TCT No. 186142 as similar to a reconstituted copy of
a Torrens certificate of title was not unwarranted. In doing so, the CA cited the ruling
in Barstowe Philippines Corporation v. Republic,32 where the Court, quoting from precedents,
opined that "the nature of a reconstituted Transfer Certificate of Title of registered land is
similar to that of a second Owners Duplicate Transfer Certificate of Title," in that "both are
issued, after the proper proceedings, on the representation of the registered owner that the
original of the said TCT or the original of the Owners Duplicate TCT, respectively, was lost
and could not be located or found despite diligent efforts exerted for that purpose;" 33 and
that both were "subsequent copies of the originals thereof," a fact that a "cursory
examination of these subsequent copies would show" and "put on notice of such fact
[anyone dealing with such copies who is] thus warned to be extracareful." 34
Verily, the Court has treated a reissued duplicate owners copy of a TCT as merely a
reconstituted certificate of title. In Garcia v. Court of Appeals,35 a case with striking
similarities to this one, an impostor succeeded in tricking a court of law into granting his
petition for the issuance of a duplicate owners copy of the supposedly lost TCT. The
impostor then had the TCT cancelled by presenting a purported deed of sale between him
and the registered owners, both of whom had already been dead for some time, and another
TCT was then issued in the impostors own name. This issuance in the impostors own name
was followed by the issuance of yet another TCT in favor of a third party, supposedly the
buyer of the impostor. In turn, the impostors transferee (already the registered owner in his
own name) mortgaged the property to Spouses Miguel and Adela Lazaro, who then caused
the annotation of the mortgage on the TCT. All the while, the original duplicate owners copy
of the TCT remained in the hands of an heir of the deceased registered owners with his coheirs knowledge and consent.
The inevitable litigation ensued, and ultimately ended up with the Court.1wphi1 The
Lazaros, as the mortgagees, claimed good faith, and urged the Court to find in their favor.
But the Court rebuffed their urging, holding instead that they did not deal on the property in
good faith because: (a) "the title of the property mortgaged to the Lazaros was a second
owners duplicate TCT, which is, in effect a reconstituted title. This circumstance should have
alerted them to make the necessary investigation, but they did not;" and (b) their argument,
that "because the TCT of the property on which their mortgage lien was annotated did not
contain the annotation: "Reconstituted title," the treatment of the reissued duplicate owners
copy of the TCT as akin to a reconstituted title did not apply, had no merit considering that:
"The nature of a reconstituted Transfer Certificate of Title of registered land is similar to that
of a second Owner's Duplicate Transfer Certificate of Title. Both are issued, after the proper
proceedings, on the representation of the registered owner that the original of the said TCT
or the original of the Owner's Duplicate TCT, respectively, was lost and could not be located
or found despite diligent efforts exerted for that purpose. Both, therefore,
are subsequent copies of the originals thereof. A cursory examination of these subsequent
copies would show that they are not the originals. Anyone dealing with such copies are put
on notice of such fact and thus warned to be extra-careful. This warning the mortgagees
Lazaros did not heed, or they just ignored it."36

The fraud committed in Garcia paralleled the fraud committed here.1wphi1 The registered
owner of the property was Domingo, who remained in the custody of her TCT all along; the
impostor was Sy, who succeeded in obtaining a duplicate owners copy; and the Cusis and
the De Veras were similarly situated as the Spouses Lazaro, the mortgagees in Garcia. The
Cusis and the De Veras did not investigate beyond the face of Sys TCT No. 186142, despite
the certificate derived from the reissued duplicate owners copy being akin to a
reconstituted TCT. Thereby, they denied themselves the innocence and good faith they
supposedly clothed themselves with when they dealt with Sy on the property.
The records also show that the forged deed of sale from Domingo to Sy appeared to be
executed on July 14, 1997; that the affidavit of loss by which Sy would later on support her
petition for the issuance of the duplicate owners copy of Domingos TCT No. 165606 was
executed on July 17, 1997, the very same day in which Sy registered the affidavit of loss in
the Registry of Deeds of Quezon City; that Sy filed the petition for the issuance of the
duplicate owners copy of Domingos TCT No. 165606; that the RTC granted her petition on
August 26, 1997; and that on October 31, 1997, a real estate mortgage was executed in
favor of one Emma Turingan, with the mortgage being annotated on TCT No. 165606 on
November 10, 1997.
Being the buyers of the registered realty, the Cusis and the De Veras were aware of the
aforementioned several almost simultaneous transactions affecting the property. Their
awareness, if it was not actual, was at least presumed, and ought to have put them on their
guard, for, as the CA pointed out, the RTC observed that "[t]hese almost simultaneous
transactions, particularly the date of the alleged loss of the TCT No. 165606 and the
purported Deed of Sale, suffice[d] to arouse suspicion on [the part of] any person dealing
with the subject property."37 Simple prudence would then have impelled them as honest
persons to make deeper inquiries to clear the suspiciousness haunting Sys title. But they
still went on with their respective purchase of the property without making the deeper
inquiries. In that regard, they were not acting in good faith.
Another circumstance indicating that the Cusis and the De Veras were not innocent
purchasers for value was the gross undervaluation of the property in the deeds of sale at the
measly price of P1,000,000.00 for each half when the true market value was then in the
aggregate of at least P14,000,000.00 for the entire property. Even if the undervaluation was
to accommodate the request of Sy to enable her to minimize her liabilities for the capital
gains tax, their acquiescence to the fraud perpetrated against the Government, no less, still
rendered them as parties to the wrongdoing. They were not any less guilty at all. In the
ultimate analysis, their supposed passivity respecting the arrangement to perpetrate the
fraud was not even plausible, because they knew as the buyers that they were not
personally liable for the capital gains taxes and thus had nothing to gain by their
acquiescence. There was simply no acceptable reason for them to have acquiesced to the
fraud, or for them not to have rightfully insisted on the declaration of the full value of the
realty in their deeds of sale. By letting their respective deeds of sale reflect the grossly
inadequate price, they should suffer the consequences, including the inference of their bad
faith in transacting the sales in their favor.
De Vera particularly insists that she and her late husband did not have any hand in the
undervaluation; and that Sy, having prepared the deed of sale, should alone be held

responsible for the undervaluation that had inured only to her benefit as the seller. However,
such insistence was rendered of no consequence herein by the fact that neither she nor her
late husband had seen fit to rectify the undervaluation. It is notable that the De Veras were
contracting parties who appeared to have transacted with full freedom from undue influence
from Sy or anyone else.
Although the petitioners argue that the actual consideration of the sale was
nearly P7,000,000.00 for each half of the property, the Court rejects their argument as
devoid of factual basis, for they did not adduce evidence of the actual payment of that
amount to Sy. Accordingly, the recitals of the deeds of sale were controlling on the
consideration of the sales.
Good faith is the honest intention to abstain from taking unconscientious advantage of
another. It means the "freedom from knowledge and circumstances which ought to put a
person on inquiry."38
Given this notion of good faith, therefore, a purchaser in good faith is one who buys the
property of another without notice that some other person has a right to, or interest in, such
property and pays full and fair price for the same. 38 As an examination of the records shows,
the petitioners were not innocent purchasers in good faith and for value. Their failure to
investigate Sy's title despite the nearly simultaneous transactions on the property that
ought to have put them on inquiry manifested their awareness of the flaw in Sy's title. That
they did not also appear to have paid the full price for their share of the property evinced
their not having paid true value.39
Resultantly, the Court affirms the lower courts, and restores to Domingo her rights of
dominion over the propetiy.
WHEREFORE, the Court AFFIRMS the decision of the Court of Appeals promulgated on July
16, 201 0; and ORDERS the petitioners to pay the costs of suit.
SO ORDERED.
CASE DIGEST: SPOUSES ALFONSO AND MARIA ANGLES CUSI VS. LILIA DOMINGO
Facts: Respondent Lilia V. Domingo was the owner of the lot in dispute covered under
Transfer Certificate of Title (TCT) No. N-165606.On July 18, 1997, without her consent,
RadeliaSy (Sy) petitioned before the RTC for reissuance of new owners copy and, as proof,
presented a deed of sale dated July 14, 1997 executed by Domingo in her favor, and an
affidavit of loss dated July 17, 1997, stating that her bag containing the owners copy of TCT
No. N-165606 had been snatched while she was at the SM City, North EDSA.
After the RTC granted the petition, the Register of Deeds cancelled the TCT No. N-165606
and issued a new TCT No. 186142 in favor of Syby virtue of the deed of absolute sale date
July 14, 1997. Sy immediately subdivided the property and sold each half to Spouses De
Vera and Spouses Cusi, and were issued TCT Nos. 189568 and 189569 respectively,
annotatedon the TCT a consideration of onlyPhp 1M each but the entire lot had an actual
valueof not less than Php 14M.

It was only on July 1999 when the respondent learned the situation.She filed an action
against Spouses Sy, Spouses De Vera, and the Spouses Cusi seeking annulment of titles,
injuction, and damages. She also applied for the issuance of writ of preliminary prohibition
and mandatory injunction, and a temporary restraining order (TRO).
The RTC granted her application, however, the title of Spouses De Vera and Spouses
Cusiremain valid as they were held purchasers in good faith. Dissatisfied with the decision,
Domingo filed a motion for reconsideration. The RTC set aside its first decision and declaring
the sale between the respondent and Sy void; the buyers were not purchasers in good faith;
cancellation of TCT Nos. 189568 and 189569; the TCT No. 165606 shall be revalidated in the
name of Domingo.
This decision was brought up to the CA filed by the petitioners but was denied. A motion for
reconsideration was also filed but the same was denied.Hence, this petition.
Issue: Whether or not the petitioners are purchasers in good faith and for value.
Held: The petitioners were NOT purchasers in good faith. Under the Torrens System of land
registration, a person dealing in the registered land has the right to rely on the Torrens
certificate title and to dispense with the need of inquiring further, except when the party has
actual knowledge of facts and circumstances that would impel a reasonably cautious man to
make such inquiry. The registered owner of realty cannot be deprived of her property
through fraud, unless a transferee acquires the property as an innocent purchaser for value.
A transferee who acquires the property covered by a reissued owners copy of the certificate
of title without taking the ordinary precautions of honest persons in doing business and
examining the records of the proper Registry of Deeds, or who fails to pay the full market
value of the property is not considered an innocent purchaser for value.
Their observance of a certain degree of diligence within the context of the principles
underlying the Torrens System was not the only barometer for them to verify the acquisition
of title. Under the law and jurisprudence, it was not enough for them to show that the
property was unfenced and vacant nor it was safe for them to rely on the face of Sys TCT
No. 186142 because they were aware that the TCT was derived only from a duplicate
owners copy reissued by virtue of the loss of the original duplicate owners copy. That
circumstance should have already alerted them to the need to inquire beyond the face of
the Sys TCT. Other circumstances that would impel a reasonably cautious man to make
such inquiry in dealing with the property are the almost simultaneous transactions affecting
the acquisition of the property that the petitioners were also aware of and the material,
undervaluation of the property in the deed of sale, e.i. the price in consideration of the
property of Php1M each half when the market value is at least Php 14Mostensibly at the
request of Sy to minimize her liabilities for Capital Gains Tax.

Mirror Principle
SPOUSES MANUEL CHU, SR. and CATALINA B. CHU, the former substituted by
THEANLYN B. CHU, THEAN CHING LEE B. CHU, THEAN LEEWN B. CHU and MARTIN
LAWRENCE B. CHU, the latter represented by his mother and guardian ad litem,
petitioner CATALINA B. CHU, petitioners, vs. BENELDA ESTATE DEVELOPMENT
CORPORATION, respondent.
G.R. No. 142313

March 1, 2001

DE LEON, JR., J.:

Before us is a petition for review on certiorari of the Decision 1 and Resolution2 of the Court of
Appeals,3 dated November 29, 1999 and March 14, 2000, respectively, which reversed the
Order4 dated March 30, 1998 of the Regional Trial Court of Pampanga, Branch 52, denying
respondent's motion to dismiss as well as the Order denying respondent's motion for
reconsideration, dated May 26, 1998.
The petitioners spouses Manuel Chu, Sr. and Catalina Chu (the former substituted by
Theanlyn Chu, Thean Ching Lee Chu, Thean Leewn Chu, and Martin Lawrence Chu) were the
registered owners of five (5) parcels of land situated in Barrio Saguin, San Fernando,
Pampanga, covered and described in Transfer Certificate of Title Nos. 198470-R, 198471-R,
198472-R, 198473-R and 199556-R of the Registry of Deeds of the province of Pampanga.
On September 30, 1986, the petitioners executed a deed of sale with assumption of
mortgage in favor of Trinidad N. Cunanan in consideration of P5,161,090.00. Although
Cunanan has actually an unpaid balance of P2,561,090.00, it was made to appear in the
deed of sale that the total consideration had been fully paid to enable Cunanan to have the
parcels of land registered in her name so that she could mortgage the same to secure a loan
and thereupon pay from the proceeds of the loan the said balance of P2,561,090.00. Their
agreement, however, was that the ownership of the properties shall remain with the
petitioners until full payment of the balance of the total purchase price. Trinidad N. Cunanan
was thus able to cause the cancellation of the said titles registered in the name of the
petitioners spouses Manuel Chu, Sr. and Catalina Chu and in lieu thereof the issuance of TCTs
No. 239278-R, No. 239376-R, No. 239279-R, No. 239277-R, and No. 239280-R which are all
registered in her name.
Cunanan failed to pay the balance of the total purchase price to the petitioners. Without the
knowledge of the petitioners, Cunanan sold the three (3) parcels of land to Cool Town Realty
and Development Corporation, and the two (2) other parcels of land subject of the instant
case and covered by TCT Nos. 239276-R and 239277-R to the spouses Amado and Gloria
Carlos. The spouses Carlos, in turn, sold these two (2) properties to the respondent Benelda
Estate Development Corporation.
Petitioners commenced Civil Case No. G-1936 before the Regional Trial Court of Pampanga
against Trinidad N. Cunanan, Cool Town Realty and Development Corporation and the

Register of Deeds of Pampanga. The petitioners amended their complaint to include

respondent Benelda Estate Development Corporation as a defendant, alleging, insofar as the
latter is concerned that:
13. That in order to cause financial damage and irreparable injury to the original
plaintiffs, defendant Trinidad N. Cunanan without any lawful right and authority
whatsoever sold the remaining two (2) parcels of land involved in this case previously
covered by Transfer Certificates of Title Nos. 239276-R and 239277-R registered in
her name (formerly embraced by Transfer Certificates of Titles Nos. 198471-R and
198472-R in the names of the original plaintiffs) in favor of the spouses AMADO E.
CARLOS and GLORIA A. CARLOS, who like defendant Cool Town Realty and
Development Corporation are not also buyers for value and in good faith of the
subject two (2) parcels of land as shown by Transfer Certificates of Titles Nos.
247026-R and 246947-R both of the Register of Deeds of Pampanga, whose xerox
copies are hereto attached respectively as Annexes "G", "G-1", "G-2", "H", and "H-1"
hereof .
14. That likewise in order to cause further financial damage and prejudice to the
plaintiffs, the spouses AMADO E. CARLOS AND GLORIA A. CARLOS, who have never
acquired valid titles over the two (2) parcels of land previously embraced by Transfer
Certificates of Titles Nos. 247026-R and 246947-R both of the Registry of Deeds of
Pampanga registered in their names referred to in the immediately preceding
paragraph sold the same two (2) parcels of land on November 13, 1995 in favor of
defendant BENELDA ESTATE DEVELOPMENT CORPORATION as shown by the
corresponding Deed of Absolute Sale, whose xerox copy is hereto attached as
Annexes "I" and "I-2" hereof .
15. That in view of the fact that the ownership of the five (5) parcels of land in issue
in this case legally remains with the plaintiffs, the deed of conveyances executed by
defendant Trinidad N. Cunanan relative to the subject five (5) parcels of land in
litigation in favor of defendant Cool Town Realty & Development Corporation and in
favor of the spouses Amado L. Carlos and Gloria A. Carlos and the deed of absolute
sale dated November 13e 1995 executed by the spouses Amado E. Carlos and Gloria
A. Carlos on lot 4224-A-2 of the subdivision plan previously covered by Transfer
Certificate of Title No. 246947-R and Lot 4224-A-3 of the subdivision plan formerly
embraced by Transfer Certificate of Title No. 247026-R both of the Registry of Deeds
of Pampanga in favor of defendant BENELDA ESTATE DEVELOPMENT CORPORATION,
which are among the five (5) parcels of land involved in this case are all null and
void, consequently the said deed of conveyances did not vest valid title of ownership
over the said five (5) parcels of land in controversy in favor of defendant COOL TOWN
REALTY DEVELOPMENT CORPORATION and BENELDA ESTATE DEVELOPMENT
CORPORATION because defendant Trinidad N. Cunanan, who has never been an
owner of any of the five (5) parcels of land in dispute cannot validly and legally
transfer the ownership thereof in favor of any person whomsoever.
16. That despite demands made by the plaintiffs to the defendants, the latter
unjustifiably failed and refused as they still fail and refuse to reconvey the five (5)
parcels of land to the said plaintiffs.5

The respondent filed its answer with a motion to dismiss on the ground, among others, that
the amended complaint states no cause of action against herein respondent. It alleged that
respondent corporation, through its officers, acted in good faith in buying the properties
inasmuch as it exerted all efforts to verify the authenticity of the titles and that no defect
was found therein. After the petitioner filed an opposition to the motion to dismiss, the trial
court rendered a decision denying the motion to dismiss.
The respondent filed a petition for certiorari under Rule 65 of the Rules of Court before the
Court of Appeals alleging that the trial court committed grave abuse of discretion in denying
its motion to dismiss the amended complaint. The Court of Appeals reversed the order of the
trial court and dismissed the case as against herein respondent on the ground of lack of
cause of action and for failure of the petitioners to include the spouses Carlos as
indispensable parties in the complaint.
Petitioner raises the following assignments of error:
I
WITH ALL DUE RESPECT TO THIS HONORABLE COURT CONTRARY TO ITS
CONCLUSION IN ITS DECISION SOUGHT TO BE SET ASIDE, PETITIONERS' AMENDED
COMPLAINT DATED JUNE 9, 1997 STATES A VALID CAUSE OF ACTION AGAINST
RESPONDENT BENELDA ESTATE DEVELOPMENT CORPORATION.
II
WITH ALL DUE RESPECT TO THIS HONORABLE COURT THE SPOUSES AMADO E.
CARLOS AND GLORIA A. CARLOS ARE NOT REAL AND INDISPENSABLE PARTIES IN THE
CASE AT BENCH.
III
IT IS RESPECTFULLY SUBMITTED THAT THE AVERMENTS MADE IN THAT DEED OF
ABSOLUTE SALE, WHOSE XEROX COPY IS ATTACHED AS ANNEXES "1" AND "1-2" OF
THE AMENDED COMPLAINT INVOLVED IN THIS CASE TO THE EFFECT THAT THE
SPOUSES AMADO E. CARLOS AND GLORIA A. CARLOS WARRANTED "VALID TITLES TO
AND POSSESSION OF THE PROPERTIES SOLD AND CONVEYED" AND THAT THEIR
TITLES THERETO ARE " FREE AND CLEAR OF ALL LIENS AND ENCUMBRANCES OF ANY
KIND WHATSOEVER" CANNOT BE VALIDLY CONSIDERED IN DETERMINING WHETHER
OR NOT PETITIONERS' AMENDED COMPLAINT DATED JUNE 9, 1997 STATES A VALID
CAUSE OF ACTION AGAINST RESPONDENT.
IV
IT IS RESPECTFULLY SUBMITTED THAT THE SPOUSES AMADO E. CARLOS AND GLORIA
A. CARLOS CANNOT TRANSFER VALID TITLE TO THE TWO (2) PARCELS OF LAND
INVOLVED IN THIS PETITION WHICH THEY THEMSELVES DO NOT HAVE.
V

IT IS RESPECTFULLY SUBMITTED THAT THE EXTRAORDINARY WRIT OF CERTIORARI IS

NOT AVAILABLE TO CHALLENGE THE ASSAILED ORDERS OF MARCH 30, 1998 AND
MAY 26, 1998 WHICH ARE BOTH INTERLOCUTORY IN CHARACTER.
A cause of action is defined as an act or omission by which a party violates a right of
another.6 The test of the sufficiency of the facts found in a petition as constituting a cause of
action is whether or not, admitting the facts alleged, the court can render a valid judgment
upon the same in accordance with the prayer thereof.7
In land title cases, this Court has time and again held that a person dealing with registered
land may safely rely on the correctness of the certificate of title issued therefor and the law
will in no way oblige him to go behind the certificate to determine the condition of the
property.8 This person is considered in law as an innocent purchaser for value who is defined
as one who buys the property of another, without notice that some other person has a right
or interest in such property and pays a full price for the same, at the time of such purchase
or before he has notice of the claims or interest of some other person in the property. 9 In this
connection, Section 53 of Presidential Decree No. 1529, otherwise known as the Property
Registration Decree, provides that:
Presentation of owner's duplicate upon entry of new certificates. No voluntary
instrument shall be registered by the Register of Deeds, unless the owner's duplicate
certificate is presented with such instrument, except in cases expressly provided for
in this Decree or upon order of the court, for cause shown.
The production of the owner's duplicate certificate, whenever any voluntary
instrument is presented for registration, shall be conclusive authority from the
registered owner to the Register of Deeds to enter a new certificate or to make a
memorandum of registration in accordance with such instrument, and the new
certificate or memorandum shall be binding upon the registered owner and upon all
persons claiming under him, in favor of every purchaser for value and in good faith.
[Italic Supplied]
xxx

xxx

xxx

Thus, a title procured through fraud and misrepresentation can still be the source of a
completely legal and valid title if the same is in the hands of an innocent purchaser for
value.10
In a case for annulment of title, therefore, the complaint must allege that the purchaser was
aware of the defect in the title so that the cause of action against him will be sufficient.
Failure to do so, as in the case at bar, is fatal for the reason that the court cannot render a
valid judgment against the purchaser who is presumed to be in good faith in acquiring the
said property. Failure to prove, much less impute, bad faith on said purchaser who has
acquired a title in his favor would make it impossible for the court to render a valid judgment
thereon due to the indefeasibility and conclusiveness of his title.
We find that the Court of Appeals did not err in dismissing the amended complaint insofar as
the respondent is concerned. The amended complaint and the annexes thereto did not

allege bad faith on the part of the respondent corporation. In fact, respondent's claim that it
bought the two (2) parcels of land in good faith are supported by the Annexes "1" and "1-2"
(Deeds of Absolute Sale) attached to petitioner's amended complaint. These deeds executed
by the spouses Carlos in favor of herein private respondent state that the spouses Carlos
warranted "valid title(s) to and possession of the properties sold and conveyed," and
furthermore declare that their titles thereto are "free and clear of all liens and encumbrances
of any kind whatsoever."11 There is no way for the trial court to render judgment against
herein respondent whose title to the subject parcels of land remains indefeasible and
conclusive, there being no allegation in the amended complaint that it allegedly acquired
the said properties in bad faith.
Petitioners contend that since the ground of respondent's motion to dismiss is lack of cause
of action, the allegations in the amended complaint are hypothetically assumed to be true or
admitted, and consequently the respondent's claim of good faith is defeated by its
knowledge of the allegedly admitted facts in the amended complaint regarding the
fraudulent circumstances involving the passing of the titles. We find that the technical or
assumed admission on the part of respondent, in such an event, does not defeat its status
as an innocent purchaser for value. The defense of good faith of respondent is valid for the
reason that such mental disposition was present at the time it purchased those two (2)
parcels of land from the Carlos spouses up to the time the corresponding two (2) transfer
certificates of title thereto were issued in its favor. What is important is that when
respondent bought the subject properties, it was not aware of any defect in the covering
certificates of title thereto at the time of such purchase. There is no allegation to the
contrary in the amended complaint. Therefore, the title of respondent, being that of an
innocent purchaser for value, remains valid.
By allowing the cancellation of their certificates of title and the issuance of new ones in lieu
thereof in the name of Trinidad N. Cunanan despite alleged non-payment of the full purchase
price for their subject two (2) parcels of land, the petitioners took the risk of losing their
titles on the said properties inasmuch as the subject deed of sale with assumption of
mortgage constitutes their consent and announcement to the whole world that Cunanan was
indeed the legal owner of the properties by virtue of the said deed which is a public
document.
Petitioners' reliance on Mathay v. Court of Appeals12 which held that "No one can transfer a
greater right to another than he himself has" is not applicable to the instant case for the
reason that the said legal maxim, according to the same case, only holds true if the same
land had already been registered and an earlier certificate for the same is in existence. In
the case at bar, the petitioners no longer have any title to the subject two (2) parcels of land
inasmuch as petitioners spouses Manuel Chu, Sr. and Catalina B. Chu, as sellers, have
consented to the cancellation of their certificates of title in favor of Cunanan, as buyer. Thus,
the conclusiveness of respondent's certificates of title is binding on the whole world
including the petitioners.
Petitioners also claim that since the orders of the trial court denying their motion to dismiss
are merely interlocutory, the same cannot be the subject of a petition for certiorari.
However, as correctly pointed out by the respondent, the rule admits of an exception. Thus,
where the denial of the motion to dismiss by the trial court was tainted with grave abuse of

discretion amounting to lack or excess of jurisdiction, as in the case at bar, the aggrieved
party may assail the order of denial on certiorari. A wide breadth of discretion is granted in
certiorari proceedings in the interest of substantial justice and to prevent a substantial
wrong.13 The appellate court therefore was correct in entertaining the petition for the reason
that the trial court committed a grave abuse of discretion when it refused to dismiss the
case as against herein respondent, despite the obvious insufficiency of the amended
complaint against the respondent. To implead the herein respondent in the case at bar,
absent an allegation of bad faith on its part, is to undermine a well-settled rule protecting
innocent purchasers for value and the indefeasibility and conclusiveness of certificates of
title issued under the Torrens System.
In view of the foregoing, there is no need to discuss the assignment of error as to whether
the spouses Amado E. Carlos and Gloria A. Carlos (sellers of the subject titled parcels of land
to respondent) are real and indispensable parties in the case at bar.
WHEREFORE, the petition is DENIED for lack of cause of action. With costs against the
petitioners.
CASE DIGEST: SPOUSES CHU V. BENELDA ESTATE DEVELOPMENT CORP
G.R. No. 142313. March 1, 2001
Facts: The petitioners spouses Manuel Chu, Sr. and Catalina Chu were the registered owners
of five (5) parcels of land situated in Barrio Saguin, San Fernando, Pampanga. They executed
a deed of sale on Sept. 30, 1986 with assumption of mortgage in favor of Trinidad N.
Cunanan. It was made to appear in the deed of sale that the total consideration had been
fully paid to enable Cunanan to have the parcels of land registered in her name so that she
could mortgage the same to secure a loan and thereupon pay from the proceeds of the loan.
Their agreement, however, was that the ownership of the properties shall remain with the
petitioners until full payment of the balance of the total purchase price.
Cunanan failed to pay the balance of the total purchase price to the petitioners. Without the
knowledge of the petitioners, Cunanan sold the three (3) parcels of land to Cool Town Realty
and Development Corporation, and the two (2) other parcels of land to the spouses Amado
and Gloria Carlos. The spouses Carlos, in turn, sold these two (2) properties to the
respondent Benelda Estate Development Corporation.
Petitioners commenced civil case before the Regional Trial Court of Pampanga against
Trinidad N. Cunanan, Cool Town Realty and Development Corporation and the Register of
Deeds of Pampanga. The petitioners amended their complaint to include respondent
Benelda Estate Development Corporation as a defendant.
The respondent filed its answer with a motion to dismiss on the ground that the amended
complaint states no cause of action against respondent. It alleged that respondent
corporation, through its officers, acted in good faith in buying the properties inasmuch as it
exerted all efforts to verify the authenticity of the titles and that no defect was found.
After the petitioner filed an opposition to the motion to dismiss, the trial court rendered a
decision denying the motion to dismiss.

The respondent filed a petition for certiorari under Rule 65 of the Rules of Court before the
Court of Appeals alleging that the trial court committed grave abuse of discretion in denying
its motion to dismiss the amended complaint. The Court of Appeals reversed the order of the
trial court and dismissed the case as against the respondent on the ground of lack of cause
of action and for failure of the petitioners to include the spouses Carlos as indispensable
parties in the complaint.
Issues: a) Whether the spouses Amado E. Carlos and Gloria A. Carlos (sellers of the subject
titled parcels of land to respondent) are real and indispensable parties in the case at bar.
b) Whether or not the respondent corporation is an innocent purchaser for value.
Held: A cause of action is defined as an act or omission by which a party violates a right of
another. The test of the sufficiency of the facts found in a petition as constituting a cause of
action is whether or not, admitting the facts alleged, the court can render a valid judgment
upon the same in accordance with the prayer thereof.
In land title cases, the court held that a person dealing with registered land may safely rely
on the correctness of the certificate of title issued and the law will in no way oblige him to go
behind the certificate to determine the condition of the property.
A person is considered in law as an innocent purchaser for value who is defined as one who
buys the property of another, without notice that some other person has a right or interest in
such property and pays a full price for the same, at the time of such purchase or before he
has notice of the claims or interest of some other person in the property. In this connection,
Section 53 of Presidential Decree No. 1529, otherwise known as the Property Registration
Decree, provides that:
The production of the owners duplicate certificate, whenever any voluntary instrument is
presented for registration, shall be conclusive authority from the registered owner to the
Register of Deeds to enter a new certificate or to make a memorandum of registration in
accordance with such instrument, and the new certificate or memorandum shall be binding
upon the registered owner and upon all persons claiming under him, in favor of every
purchaser for value and in good faith.
Thus, a title procured through fraud and misrepresentation can still be the source of a
completely legal and valid title if the same is in the hands of an innocent purchaser for
value.
In a case for annulment of title, therefore, the complaint must allege that the purchaser was
aware of the defect in the title so that the cause of action against him will be sufficient.
Failure to do so, as in the case at bar, is fatal for the reason that the court cannot render a
valid judgment against the purchaser who is presumed to be in good faith in acquiring the
said property. Failure to prove, much less impute, bad faith on said purchaser who has
acquired a title in his favor would make it impossible for the court to render a valid judgment
thereon due to the indefeasibility and conclusiveness of his title.
What is important is that when respondent bought the subject properties, it was not aware
of any defect in the covering certificates of title thereto at the time of such purchase. There

is no allegation to the contrary in the amended complaint. Therefore, the title of respondent,
being that of an innocent purchaser for value, remains valid.
By allowing the cancellation of their certificates of title and the issuance of new ones in lieu
thereof in the name of Trinidad N. Cunanan despite alleged non-payment of the full purchase
price for their subject two (2) parcels of land, the petitioners took the risk of losing their
titles on the said properties inasmuch as the subject deed of sale with assumption of
mortgage constitutes their consent and announcement to the whole world that Cunanan was
indeed the legal owner of the properties by virtue of the said deed which is a public
document.
The appellate court therefore was correct in entertaining the petition for the reason that the
trial court committed a grave abuse of discretion when it refused to dismiss the case against
the respondent, despite the obvious insufficiency of the amended complaint against the
corporation respondent.
To implead the respondent in the case at bar, absent an allegation of bad faith on its part, is
to undermine a well-settled rule protecting innocent purchasers for value and the
indefeasibility and conclusiveness of certificates of title issued under the Torrens System.
The petition is DENIED for lack of cause of action.

REPUBLIC
OF
THE
PHILIPPINES,
represented
by
the
DIRECTOR
OF
LANDS, petitioner, vs.HONORABLE MARIANO M. UMALI, in his capacity as Presiding
Judge, Regional Trial Court, Fourth Judicial Region, Branch 23, Trece Martires City,
REMEDIOS MICLAT, JUAN C. PULIDO, ROSALINA NAVAL, and the REGISTER OF
DEEDS OF CAVITE, respondents.
G.R. No. 80687 April 10, 1989
CRUZ, J.:
The petitioner seeks reversion of a parcel of land on the ground that the original sale thereof
from the government was tainted with fraud because based on a forgery and therefore
void ab initio. The present holders of the property claiming to be innocent purchasers for
value and not privy to the alleged forgery, contend that the action cannot lie against them.
The land in question is situated in Tanza, Cavite, and consists of 78,865 square meters. 1 It
was originally purchased on installment from the government on July 1, 1910 by Florentina
Bobadilla, who allegedly transferred her rights thereto in favor of Martina, Tomasa, Gregorio
and Julio, all surnamed Cenizal, in 1922. 2 Tomasa and Julio assigned their shares to Martina,
Maria and Gregorio. 3 In 1971 these three assignees purportedly signed a joint affidavit
which was filed with the Bureau of Lands to support their claim that they were entitled to the
issuance of a certificate of title over the said land on which they said they had already made
full payment. 4 On the basis of this affidavit, the Secretary of Agriculture and Natural
Resources executed Deed No. V-10910 (Sale Certificate No. 1280) on September 10, 1971, in
favor of the said affiants. 5 Subsequently, on October 13, 1971, TCT No. 55044 (replacing
Bobadilla's OCT No. 180) was issued by the register of deeds of Cavite in favor of Maria
Cenizal, Gregorio Cenizal, and (in lieu of Martina Cenizal) Rosalina Naval, Luz Naval, and
Enrique Naval. 6
When the complaint for reversion was filed on October 10, 1985, the registered owners of
the land, following several transfers, were Remedios Miclat under TCT No. 80392, Juan C.
Pulido under TCT No. 80393, and Rosalina, Luz and Enrique Naval under TCT No.
80394. 7 They were named as defendants and asked to return the property to the State on
the aforestated grounds of forgery and fraud. The plaintiff claimed that Gregorio Cenizal
having died on February 25, 1943, and Maria Cenizal on January 8, 1959, they could not
have signed the joint affidavit dated August 9, 1971, on which Deed No. V-10910 (Sale
Certificate No. 1280) was based. 8
In their answer, Pulido and the Navals denied any participation in the joint affidavit and said
they had all acquired the property in good faith and for value. By way of affirmative
defenses, they invoked estoppel, laches, prescription and res judicata. 9 For her part, Miclat
moved to dismiss the complaint, contending that the government had no cause of action
against her because there was no allegation that she had violated the plaintiff's right, that
the government was not the real party-in-interest because the subject land was already
covered by the Torrens system, and that in any event the action was barred by prescription
or laches. 10

The respondent court, in its order dated October 2, 1987, granted the motion. 11 The
petitioner, contesting this order, now insists that it has a valid cause of action and that it is
not barred by either prescription or res judicata.
The Court will observe at the outset that the joint affidavit is indeed a forgery. Apart from the
fact that two of the supposed affiants were already dead at the time they were supposed to
have signed the sworn statement, even the most cursory examination of the document will
show that the three signatures affixed thereto were written by one and the same
hand. 12 There is no doubt about it. It is indeed difficult to understand how such an obvious
forgery could have deceived the people in the Bureau of Lands who processed the papers of
this case and made possible the fraudulent transfer of the land.
But given such deception, would the sale itself be considered null and void from the start, as
the petitioner insists, so as to make all titles derived therefrom also ineffectual ab initio?
We agree with the contention that there is no allegation in the complaint 13 filed by the
petitioner that any one of the defendants was privy to the forged joint affidavit or that they
had acquired the subject land in bad faith. Their status as innocent transferees for value was
never questioned in that pleading. Not having been disproved, that status now accords to
them the protection of the Torrens System and renders the titles obtained by them
thereunder indefeasible and conclusive. The rule will not change despite the flaw in TCT No.
55044.
Section 39 of the Land Registration Act clearly provided:
Sec. 39. Every person receiving a certificate of title in
pursuance of a decree of registration, and every subsequent
purchaser of registered land who takes a certificate of title for
value in good faith shall hold the same free of all encumbrance
except those noted on said certificate.
The rulings on this provision are indeed as numerous as they are consistent:
Thus, under Section 44 of P.D. 1529 (then Sec. 39 of the Land Reg. Act), every
registered owner receiving a certificate of title in pursuance of a decree of
registration, and every subsequent purchaser of registered land taking a
certificate of title for value and in good faith, shall hold the same free from all
encumbrances except those noted on the certificate and any of the
encumbrances which may be subsisting, and enumerated in the law. Under
said provision, claims and liens of whatever character, except those
mentioned by law as existing against the land prior to the issuance of
certificate of title, are cut off by such certificate if not noted thereon, and the
certificate so issued binds the whole world, including the government. 14
xxx xxx xxx
A holder in bad faith is not entitled to the protection of Sec. 39 of the Land
Registration Act. 15

xxx xxx xxx

The real purpose of the Torrens System of land registration is to quiet title to
land; to put a stop forever to any question of the legality of the title, except
claims which were noted at the time of registration in the certificate, or which
may arise subsequent thereto. That being the purpose of the law, it would
seem that once the title was registered, the owner might rest secure, without
the necessity of waiting in the portals of the court, or sitting in the "mirador
de su casa," to avoid the possibility of losing his land. 16
The decision in Piero v. Director of Lands 17 is not applicable to the present proceeding
because the lands involved in that case had not yet passed to the hands of an innocent
purchaser for value. They were still held by the Pineros. The action for reversion was filed by
the government against them as the original transferees of the properties in question. They
were the direct grantees of the free patents issued by the government pursuant to which the
corresponding certificates of title were issued under the Torrens system. The fraud alleged
by the government as a ground for the reversion sought was imputable directly to the
Pineros, who could not plead the status of innocent purchasers for value.
The difference between them and the private respondents is that the latter acquired the
land in question not by direct grant but in fact after several transfers following the original
sale thereof to Bobadilla in 1910. The presumption is that they are innocent transferees for
value in the absence of evidence to the contrary. The petitioner contends that it was Pedro
Miclat who caused the falsification of the joint affidavit, but that is a bare and hardly
persuasive allegation, and indeed, even if true, would still not prove any collusion between
him and the private respondents. The mere fact that Remedios Miclat was the daughter and
heiress of Miclat, without more, would not necessarily visit upon her the alleged sins of her
father.
The Solicitor General also argues that Remedios is an extension of the juridical personality of
her father and so cannot claim to be an innocent purchaser for value because she is charged
with knowledge of her father's deceit. Such conclusion has no basis in fact or law. Moreover,
there is evidence that Remedios did not merely inherit the land but actually purchased it for
valuable consideration and without knowledge of its original defect. The agreement to
subdivide, 18 which she presented to show that she had acquired the land for valuable
confederation, is more acceptable than the conjectures of the petitioner. It is also consonant
with the presumption of good faith.
The land being now registered under the Torrens system in the names of the private
respondents, the government has no more control or jurisdiction over it. It is no longer part
of the public domain or, as the Solicitor General contends as if it made any difference
of the Friar Lands. The subject property ceased to be public land when OCT No. 180 was
issued to Florentina Bobadilla in 1910 or at the latest from the date it was sold to the
Cenizals in 1971 upon full payment of the purchase price. As private registered land, it is
governed by the provisions of the Land Registration Act, now denominated the Property
Registration Decree, which applies even to the government.
The pertinent provision of the Land Registration Act was Section 122, which read as follows:

Sec. 122. Whenever public lands in the Philippine Islands belonging to the
Government of the United States or to the Government of the Philippine
Islands are alienated, granted, or conveyed to persons or to public or private
corporations, the same shall be brought forthwith under the operation of this
Act and shall become registered lands. 19
This should be related to Section 12 of the Friar Lands Act, providing thus:
Sec. 12. . . . upon the payment of the final installment together with all
accrued interest, the Government will convey to such settler and occupant the
said land so held by him by proper instrument of conveyance, which shall be
issued and become effective in the manner provided in section one hundred
and twenty-two (Sec. 122) of the Land Registration Act.
The petitioner claims that it is not barred by the statute of limitations because the original
transfer of the land was null and void ab initio and did not give rise to any legal right. The
land therefore continued to be part of the public domain and the action for this reversion
could be filed at any time. The answer to that is the statement made by the Court in Heirs
of Tanak Pangawaran Patiwayan v. Martinez 20 that "even if respondent Tagwalan eventually
is proven to have procured the patent and the original certificate of title by means of fraud,
the land would not revert back to the State," precisely because it has become private land.
Moreover, the petitioner errs in arguing that the original transfer was null and void ab
initio, for the fact is that it is not so. It was only voidable. The land remained private as long
as the title thereto had not been voided, but it is too late to do that now. As the Court has
held in Ramirez vs. Court of Appeals. 21
A certificate of title fraudulently secured is not null and void ab initio, unless
the fraud consisted in misrepresenting that the land is part of the public
domain, although it is not. In such case the nullity arises, not from the fraud or
deceit, but from the fact that the land is not under the jurisdiction of the
Bureau of Lands. Inasmuch as the land involved in the present case does not
belong to such category, OCT No. 282-A would be merely voidable or
reviewable (Vda. de Cuaycong vs. Vda. de Sengbengco, 110 Phil. 113): (1)
upon proof of actual fraud; (2) although valid and effective, until annulled or
reviewed in a direct proceeding therefor (Legarda vs. Saleeby, 31 Phil. 590),
not collaterally (Sorongon vs. Makalintal, 80 Phil. 259, 262; Director of Lands
vs. Gan Tan, 89 Phil. 184; Henderson vs. Garrido, 90 Phil. 624,630; Samonte
vs. Sambilon, 107 Phil. 198,200); (3) within the statutory period therefor (Sec.
38, Act 496; Velasco vs. Gochuico 33 Phil. 363; Delos Reyes vs. Paterno, 34
Phil. 420; Snyder vs. Provincial Fiscal, 42 Phil. 761, 764; Reyes vs. Borbon, 50
Phil. 791; Clemente vs. Lukban, 53 Phil. 931; Sugayan vs. Solis, 56 Phil. 276,
279; Heirs of Lichauco vs. Director of Lands, 70 Phil. 69); (4) after which, the
title would be conclusive against the whole world, including the Government
(Legarda vs. Saleeby, 31 Phil. 590, 596; Central Capiz vs. Ramirez, 40 Phil.
883; J. M. Tuason vs. Santiago, 99 Phil. 615).
And as we declared in Municipality of Hagonoy vs. Secretary of Agriculture and Natural
Resources: 22

. . . Once a patent is registered and the corresponding certificate of title is

issued, the land ceases to be part of public domain and becomes private
property over which the director of Lands has neither control nor jurisdiction.
A public land patent, when registered in the corresponding Register of Deeds,
is a veritable Torrens Title, and becomes as indefeasible as Torrens Title upon
the expiration of one (1) year from the date of issuance thereof. Said title is,
like one issued pursuant to a judicial decree, subject to review within one (1)
year from the date of the issuance of the patent. Beyond said period, the
action for the annulment of the certificate of title issued upon the land grant
can no longer be entertained. (Emphasis supplied).
It is worth observing here that in two earlier cases, the private respondents were challenged
by the heirs of Matilde Cenizal Arguson but both were dismissed and the titles of the
registered owners were confirmed by the trial court. 23 This decision was later sustained by
this Court. 24 While this is not to say that the present petition is barred by res judicata, as the
government was not a party in these cases, it does suggest that the issue it wants to rake
up now has long been settled. It should not be the subject of further judicial inquiry,
especially at this late hour. Litigation must stop at some point instead of dragging on
interminably.
The Torrens system was adopted in this country because it was believed to be the most
effective measure to guarantee the integrity of land titles and to protect their indefeasibility
once the claim of ownership is established and recognized. If a person purchases a piece of
land on the assurance that the seller's title thereto is valid, he should not run the risk of
being told later that his acquisition was ineffectual after all. This would not only be unfair to
him. What is worse is that if this were permitted, public confidence in the system would be
eroded and land transactions would have to be attended by complicated and not necessarily
conclusive investigations and proof of ownership. The further consequence would be that
land conflicts could be even more numerous and complex than they are now and possibly
also more abrasive if not even violent. The government, recognizing the worthy purposes of
the Torrens system, should be the first to accept the validity of titles issued thereunder once
the conditions laid down by the law are satisfied. As in this case.
We find that the private respondents are transferees in good faith and for value of the
subject property and that the original acquisition thereof, although fraudulent, did not affect
their own titles. These are valid against the whole world, including the government.
ACCORDINGLY, the petition is DENIED, without any pronouncement as to costs. It is so
ordered.

REPUBLIC OF THE PHILIPPINES, Petitioner, vs. DOMINGO ESPINOSA, Respondent.

G.R. No. 171514

July 18, 2012

REYES, J.:
This is a petition for review on certiorari from the Decision 1 dated November 11, 2004 and
Resolution2 dated February 13, 2006 of the Court of Appeals in CA-G.R. CV No. 72456.
On March 3, 1999, respondent Domingo Espinosa (Espinosa) tiled with the Municipal Trial
Court (MTC) of Consolacion, Cebu an application 3 for land registration covering a parcel of
land with an area of 5,525 square meters and situated in Barangay Cabangahan,
Consolacion, Cebu. In support of his application, which was docketed as LRC Case No. N-81,
Espinosa alleged that: (a) the property, which is more particularly known as Lot No. 8499 of
Cad. 545-D (New), is alienable and disposable; (b) he purchased the property from his
mother, Isabel Espinosa (Isabel), on July 4, 1970 and the latters other heirs had waived their
rights thereto; and (c) he and his predecessor-in-interest had been in possession of the
property in the concept of an owner for more than thirty (30) years.
Espinosa submitted the blueprint of Advanced Survey Plan 07-000893 4 to prove the identity
of the land. As proof that the property is alienable and disposable, he marked as evidence
the annotation on the advance survey plan made by Cynthia L. Ibaez, Chief of the Map
Projection Section, stating that "CONFORMED PER L.C. MAP NOTATION L.C. Map No. 2545
Project No. 28 certified on June 25, 1963, verified to be within Alienable & Disposable
Area".5 Espinosa also presented two (2) tax declarations for the years 1965 and 1974 in
Isabels name Tax Declaration Nos. 013516 and 06137 to prove that she had been in
possession of the property since 1965. To support his claim that he had been religiously
paying the taxes due on the property, Espinosa presented a Certification 6 dated December
1, 1998 issued by the Office of the Treasurer of Consolacion, Cebu and three (3) tax
declarations for the years 1978, 1980 and 1985 Tax Declaration Nos. 14010, 17681 and
010717.8
Petitioner opposed Espinosas application, claiming that: (a) Section 48(b) of Commonwealth
Act No. 141 otherwise known as the "Public Land Act" (PLA) had not been complied with as
Espinosas predecessor-in-interest possessed the property only after June 12, 1945; and (b)
the tax declarations do not prove that his possession and that of his predecessor-in-interest
are in the character and for the length of time required by law.
On August 18, 2000, the MTC rendered a Judgment 9 granting Espinosas petition for
registration, the dispositive portion of which states:
WHEREFORE, and in view of all the foregoing, judgment is hereby rendered ordering for the
registration and the confirmation of title of Espinosa over Lot No. 8499, Cad 545-D (New),
situated at Barangay Cabangahan, Consolacion, Cebu, Philippines, containing an area of
5,525 square meters and that upon the finality of this decision, let a corresponding decree of

registration be issued in favor of the herein applicant in accordance with Section 39, P.D.
1529.
SO ORDERED.10
According to the MTC, Espinosa was able to prove that the property is alienable and
disposable and that he complied with the requirements of Section 14(1) of Presidential
Decree (P.D.) No. 1529. Specifically:
After a careful consideration of the evidence presented in the above-entitled case, the Court
is convinced, and so holds, that Espinosa was able to establish his ownership and possession
over the subject lot which is within the area considered by the Department of Environment
and Natural Resources (DENR) as alienable and disposable land of the public domain.
The Court is likewise convinced that the applicant and that of predecessor-in-interest have
been in open, actual, public, continuous, adverse and under claim of title thereto within the
time prescribed by law (Sec. 14, sub-par. 1, P.D. 1529) and/or in accordance with the Land
Registration Act.11
Petitioner appealed to the CA and pointed Espinosas failure to prove that his possession and
that of his predecessor-in-interest were for the period required by law. As shown by Tax
Declaration No. 013516, Isabels possession commenced only in 1965 and not on June 12,
1945 or earlier as required by Section 48(b) of the PLA. On the other hand, Espinosa came
into possession of the property only in 1970 following the sale that transpired between him
and his mother and the earliest tax declaration in his name was for the year 1978. According
to petitioner, that Espinosa and his predecessor-in-interest were supposedly in possession
for more than thirty (30) years is inconsequential absent proof that such possession began
on June 12, 1945 or earlier.12
Petitioner also claimed that Espinosas failure to present the original tracing cloth of the
survey plan or a sepia copy thereof is fatal to his application. Citing Del Rosario v. Republic
of the Philippines13 and Director of Lands v. Judge Reyes, 14 petitioner argued that the
submission of the original tracing cloth is mandatory in establishing the identity of the land
subject of the application.15
Further, petitioner claimed that the annotation on the advance survey plan is not the
evidence admissible to prove that the subject land is alienable and disposable. 16
By way of the assailed decision, the CA dismissed petitioners appeal and affirmed the MTC
Decision dated August 18, 2000. The CA ruled that possession for at least thirty (30) years,
despite the fact that it commenced after June 12, 1945, sufficed to convert the property to
private. Thus:
The contention of petitioner is not meritorious on the following grounds:
a) The record of the case will show that Espinosa has successfully established valid title over
the subject land and that he and his predecessor-in-interest have been in continuous,
adverse, public and undisturbed possession of said land in the concept of an owner for more

than 30 years before the filing of the application. Established jurisprudence has consistently
pronounced that "open, continuous and exclusive possession for at least 30 years of
alienable public land ipso jure converts the same into private property (Director of Lands vs.
Intermediate Appellate Court, 214 SCRA 604). This means that occupation and cultivation for
more than 30 years by applicant and his predecessor-in-interest vests title on such applicant
so as to segregate the land from the mass of public land (National Power Corporation vs.
Court of Appeals, 218 SCRA 41); and
b) It is true that the requirement of possession since June 12, 1945 is the latest amendment
of Section 48(b) of the Public Land Act (C.A. No. 141), but a strict implementation of the law
would in certain cases result in inequity and unfairness to Espinosa. As wisely stated by the
Supreme Court in the case of Republic vs. Court of Appeals, 235 SCRA 567:
"Following the logic of the petitioner, any transferee is thus foreclosed to apply for
registration of title over a parcel of land notwithstanding the fact that the transferor, or his
predecessor-in-interest has been in open, notorious and exclusive possession thereof for
thirty (30) years or more."17
The CA also ruled that registration can be based on other documentary evidence, not
necessarily the original tracing cloth plan, as the identity and location of the property can be
established by other competent evidence.
Again, the aforesaid contention of [the petitioner] is without merit. While the best evidence
to identify a piece of land for registration purposes may be the original tracing cloth plan
from the Land Registration Commission, the court may sufficiently order the issuance of a
decree of registration on the basis of the blue print copies and other evidence (Republic of
the Philippines vs. Intermediate Appellate Court, G.R. No. L-70594, October 10, 1986). The
said case provides further:
"The fact that the lower court finds the evidence of the applicant sufficient to justify the
registration and confirmation of her titles and did not find it necessary to avail of the original
tracing cloth plan from the Land Registration Commission for purposes of comparison,
should not militate against the rights of the applicant. Such is especially true in this case
where no clear, strong, convincing and more preponderant proof has been shown by the
oppositor to overcome the correctness of said plans which were found both by the lower
court and the Court of Appeals as conclusive proofs of the description and identities of the
parcels of land contained therein."
There is no dispute that, in case of Del Rosario vs. Republic, supra the Supreme Court
pronounced that the submission in evidence of the original tracing cloth plan, duly approved
by the Bureau of Lands, in cases for application of original registration of land is a
mandatory requirement, and that failure to comply with such requirement is fatal to ones
application for registration. However, such pronouncement need not be taken as an iron clad
rule nor to be applied strictly in all cases without due regard to the rationale behind the
submission of the tracing cloth plan.
x x x:

xxxx
As long as the identity of and location of the lot can be established by other competent
evidence like a duly approved blueprint copy of the advance survey plan of Lot 8499 and
technical description of Lot 8499, containing and identifying the boundaries, actual area and
location of the lot, the presentation of the original tracing cloth plan may be excused. 18
Moreover, the CA ruled that Espinosa had duly proven that the property is alienable and
disposable:
Espinosa has established that Lot 8499 is alienable and disposable. In the duly approved
Advance Survey Plan As-07-0000893 (sic) duly approved by the Land Management Services,
DENR, Region 7, Cebu City, it is certified/verified that the subject lot is inside the alienable
and disposable area of the disposable and alienable land of the public domain. 19
Petitioner moved for reconsideration but this was denied by the CA in its Resolution 20 dated
February 13, 2006.
Petitioners Case
Petitioner entreats this Court to reverse and set aside the CAs assailed decision and
attributes the following errors: (a) Espinosa failed to prove by competent evidence that the
subject property is alienable and disposable; (b) jurisprudence dictates that a survey plan
identifies the property in preparation for a judicial proceeding but does not convert the
property into alienable, much less, private; (c) under Section 17 of P.D. No. 1529, the
submission of the original tracing cloth plan is mandatory to determine the exact metes and
bounds of the property; and (d) a blueprint copy of the survey plan may be admitted as
evidence of the identity and location of the property only if it bears the approval of the
Director of Lands.
Issues
The resolution of the primordial question of whether Espinosa has acquired an imperfect title
over the subject property that is worthy of confirmation and registration is hinged on the
determination of the following issues:
a. whether the blueprint of the advanced survey plan substantially complies with
Section 17 of P.D. No. 1529; and
b. whether the notation on the blueprint copy of the plan made by the geodetic
engineer who conducted the survey sufficed to prove that the land applied for is
alienable and disposable.
Our Ruling
The lower courts were unanimous in holding that Espinosas application is anchored on
Section 14(1) of P.D. No. 1529 in relation to Section 48(b) of the PLA and the grant thereof is

warranted in view of evidence supposedly showing his compliance with the requirements
thereof.
This Court is of a different view.
Based on Espinosas allegations and his supporting documents, it is patent that his claim of
an imperfect title over the property in question is based on Section 14(2) and not Section
14(1) of P.D. No. 1529 in relation to Section 48(b) of the PLA. Espinosa did not allege that his
possession and that of his predecessor-in-interest commenced on June 12, 1945 or earlier as
prescribed under the two (2) latter provisions. On the contrary, Espinosa repeatedly alleged
that he acquired title thru his possession and that of his predecessor-in-interest, Isabel, of
the subject property for thirty (30) years, or through prescription. Therefore, the rule that
should have been applied is Section 14(2) of P.D. No. 1529, which states:
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:
xxxx
(2) Those who have acquired ownership of private lands by prescription under the provision
of existing laws.
Obviously, the confusion that attended the lower courts disposition of this case stemmed
from their failure to apprise themselves of the changes that Section 48(b) of the PLA
underwent over the years. Section 48(b) of the PLA originally states:
Sec. 48. The following described citizens of the Philippines, occupying lands of the public
domain or claiming to own any such lands or an interest therein, but whose titles have not
been perfected or completed, may apply to the Court of First Instance of the province where
the land is located for confirmation of their claims and the issuance of a certificate of title
therefor, under the Land Registration Act, to wit:
xxxx
(b) Those who by themselves or through their predecessors-in-interest have been in the
open, continuous, exclusive and notorious possession and occupation of agricultural lands of
the public domain, under a bona fide claim of acquisition or ownership, except as against the
Government, since July twenty-sixth, eighteen hundred and ninety-four, except when
prevented by war or force majeure. These shall be conclusively presumed to have performed
all the conditions essential to a Government grant and shall be entitled to a certificate of
title under the provisions of this chapter.
Thus, the required possession and occupation for judicial confirmation of imperfect title was
since July 26, 1894 or earlier.

On June 22, 1957, Republic Act (R.A.) No. 1942 amended Section 48(b) of the PLA by
providing a thirty (30)-year prescriptive period for judicial confirmation of imperfect title.
Thus:
(b) Those who by themselves or through their predecessors-in-interest have been in the
open, continuous, exclusive and notorious possession and occupation of agricultural lands of
the public domain, under a bona fide claim of acquisition or ownership, for at least thirty
years immediately preceding the filing of the application for confirmation of title except
when prevented by war or force majeure. These shall be conclusively presumed to have
performed all the conditions essential to a Government grant and shall be entitled to a
certificate of title under the provisions of this chapter.
On January 25, 1977, P.D. No. 1073 was issued, changing the requirement for possession and
occupation for a period of thirty (30) years to possession and occupation since June 12, 1945
or earlier. Section 4 of P.D. No. 1073 states:
Sec. 4. The provisions of Section 48(b) and Section 48(c), Chapter VIII of the Public Land Act
are hereby amended in the sense that these provisions shall apply only to alienable and
disposable lands of the public domain which have been in open, continuous, exclusive and
notorious possession and occupation by the applicant himself or thru his predecessor-ininterest, under a bona fide claim of acquisition of ownership, since June 12, 1945.
On June 11, 1978, P.D. No. 1529 was enacted. Notably, the requirement for possession and
occupation since June 12, 1945 or earlier was adopted under Section 14(1) thereof.
P.D. No. 1073, in effect, repealed R.A. No. 1942 such that applications under Section 48(b) of
the PLA filed after the promulgation of P.D. No. 1073 should allege and prove possession and
occupation that dated back to June 12, 1945 or earlier. However, vested rights may have
been acquired under Section 48(b) prior to its amendment by P.D. No. 1073. That is, should
petitions for registration filed by those who had already been in possession of alienable and
disposable lands of the public domain for thirty (30) years at the time P.D. No. 1073 was
promulgated be denied because their possession commenced after June 12, 1945? In
Abejaron v. Nabasa,21 this Court resolved this legal predicament as follows:
However, as petitioner Abejarons 30-year period of possession and occupation required by
the Public Land Act, as amended by R.A. 1942 ran from 1945 to 1975, prior to the effectivity
of P.D. No. 1073 in 1977, the requirement of said P.D. that occupation and possession should
have started on June 12, 1945 or earlier, does not apply to him. As the Susi doctrine holds
that the grant of title by virtue of Sec. 48(b) takes place by operation of law, then upon
Abejarons satisfaction of the requirements of this law, he would have already gained title
over the disputed land in 1975. This follows the doctrine laid down in Director of Lands v.
Intermediate Appellate Court, et al., that the law cannot impair vested rights such as a land
grant. More clearly stated, "Filipino citizens who by themselves or their predecessors-ininterest have been, prior to the effectivity of P.D. 1073 on January 25, 1977, in open,
continuous, exclusive and notorious possession and occupation of agricultural lands of the
public domain, under a bona fide claim of acquisition of ownership, for at least 30 years, or
at least since January 24, 1947" may apply for judicial confirmation of their imperfect or
incomplete title under Sec. 48(b) of the Public Land Act. 22 (Citations omitted)

Consequently, for one to invoke Section 48(b) and claim an imperfect title over an alienable
and disposable land of the public domain on the basis of a thirty (30)-year possession and
occupation, it must be demonstrated that such possession and occupation commenced on
January 24, 1947 and the thirty (30)-year period was completed prior to the effectivity of P.D.
No. 1073.
There is nothing in Section 48(b) that would suggest that it provides for two (2) modes of
acquisition. It is not the case that there is an option between possession and occupation for
thirty (30) years and possession and occupation since June 12, 1945 or earlier. It is neither
contemplated under Section 48(b) that if possession and occupation of an alienable and
disposable public land started after June 12, 1945, it is still possible to acquire an imperfect
title if such possession and occupation spanned for thirty (30) years at the time of the filing
of the application.
In this case, the lower courts concluded that Espinosa complied with the requirements of
Section 48(b) of the PLA in relation to Section 14(1) of P.D. No. 1529 based on supposed
evidence that he and his predecessor-in-interest had been in possession of the property for
at least thirty (30) years prior to the time he filed his application. However, there is nothing
on record showing that as of January 25, 1977 or prior to the effectivity of P.D. No. 1073, he
or Isabel had already acquired title by means of possession and occupation of the property
for thirty (30) years. On the contrary, the earliest tax declaration in Isabels name was for
the year 1965 indicating that as of January 25, 1977, only twelve (12) years had lapsed from
the time she first came supposedly into possession.
The CAs reliance on Director of Lands v. Intermediate Appellate Court 23 is misplaced
considering that the application therein was filed on October 20, 1975 or before the
effectivity of P.D. No. 1073. The same can be said with respect to National Power Corporation
v. Court of Appeals.24 The petition for registration therein was filed on August 21, 1968 and
at that time, the prevailing rule was that provided under Section 48(b) as amended by R.A.
No. 1942.
In Republic v. Court of Appeals,25 the applicants therein entered into possession of the
property on June 17, 1978 and filed their application on February 5, 1987. Nonetheless,
there is evidence that the individuals from whom the applicant purchased the property, or
their predecessors-in-interest, had been in possession since 1937. Thus, during the
effectivity of Section 48(b) as amended by R.A. No. 1942, or while the prevailing rule was
possession and occupation for thirty (30) years, or prior to the issuance of P.D. No. 1073, the
thirty (30)-year prescriptive period was already completed.
Thus, assuming that it is Section 48(b) of the PLA in relation to Section 14(1) of P.D. No. 1529
that should apply in this case, as the lower courts held, it was incumbent upon Espinosa to
prove, among other things, that Isabels possession of the property dated back at least to
June 12, 1945. That in view of the established fact that Isabels alleged possession and
occupation started much later, the lower courts should have dismissed Espinosas
application outright.
In sum, the CA, as well as the MTC, erred in not applying the present text of Section 48(b) of
the PLA. That there were instances wherein applications were granted on the basis of

possession and occupation for thirty (30) years was for the sole reason discussed above.
Regrettably, such reason does not obtain in this case.
Being clear that it is Section 14(2) of P.D. No. 1529 that should apply, it follows that the
subject property being supposedly alienable and disposable will not suffice. As Section 14(2)
categorically provides, only private properties may be acquired thru prescription and under
Articles 420 and 421 of the Civil Code, only those properties, which are not for public use,
public service or intended for the development of national wealth, are considered private. In
Heirs of Mario Malabanan v. Republic, 26 this Court held that there must be an official
declaration to that effect before the property may be rendered susceptible to prescription:
Nonetheless, Article 422 of the Civil Code states that "property of public dominion, when no
longer intended for public use or for public service, shall form part of the patrimonial
property of the State." It is this provision that controls how public dominion property may be
converted into patrimonial property susceptible to acquisition by prescription. After all,
Article 420(2) makes clear that those property "which belong to the State, without being for
public use, and are intended for some public service or for the development of the national
wealth" are public dominion property. For as long as the property belongs to the State,
although already classified as alienable or disposable, it remains property of the public
dominion if when it is "intended for some public service or for the development of the
national wealth." (Emphasis supplied)
Accordingly, there must be an express declaration by the State that the public dominion
property is no longer intended for public service or the development of the national wealth
or that the property has been converted into patrimonial. Without such express declaration,
the property, even if classified as alienable or disposable, remains property of the public
dominion, pursuant to Article 420(2), and thus incapable of acquisition by prescription. It is
only when such alienable and disposable lands are expressly declared by the State to be no
longer intended for public service or for the development of the national wealth that the
period of acquisitive prescription can begin to run. Such declaration shall be in the form of a
law duly enacted by Congress or a Presidential Proclamation in cases where the President is
duly authorized by law.27
Thus, granting that Isabel and, later, Espinosa possessed and occupied the property for an
aggregate period of thirty (30) years, this does not operate to divest the State of its
ownership. The property, albeit allegedly alienable and disposable, is not patrimonial. As the
property is not held by the State in its private capacity, acquisition of title thereto
necessitates observance of the provisions of Section 48(b) of the PLA in relation to Section
14(1) of P.D. No. 1529 or possession and occupation since June 12, 1945. For prescription to
run against the State, there must be proof that there was an official declaration that the
subject property is no longer earmarked for public service or the development of national
wealth. Moreover, such official declaration should have been issued at least ten (10) or thirty
(30) years, as the case may be, prior to the filing of the application for registration. The
period of possession and occupation prior to the conversion of the property to private or
patrimonial shall not be considered in determining completion of the prescriptive period.
Indeed, while a piece of land is still reserved for public service or the development of
national wealth, even if the same is alienable and disposable, possession and occupation no

matter how lengthy will not ripen to ownership or give rise to any title that would defeat that
of the States if such did not commence on June 12, 1945 or earlier.
At any rate, as petitioner correctly pointed out, the notation on the survey plan does not
constitute incontrovertible evidence that would overcome the presumption that the property
belongs to the inalienable public domain.
All lands of the public domain belong to the State, which is the source of any asserted right
to any ownership of land. All lands not appearing to be clearly within private ownership are
presumed to belong to the State. Accordingly, public lands not shown to have been
reclassified or released as alienable agricultural land, or alienated to a private person by the
State, remain part of the inalienable public domain. The burden of proof in overcoming the
presumption of State ownership of the lands of the public domain is on the person applying
for registration (or claiming ownership), who must prove that the land subject of the
application is alienable or disposable. To overcome this presumption, incontrovertible
evidence must be established that the land subject of the application (or claim) is alienable
or disposable.28
In Republic v. Sarmiento,29 this Court reiterated the earlier ruling in Menguito v.
Republic30 that the notation made by a surveyor-geodetic engineer that the property
surveyed is alienable and disposable is not the positive government act that would remove
the property from the inalienable domain. Neither it is the evidence accepted as sufficient to
controvert the presumption that the property is inalienable:
To discharge the onus, respondent relies on the blue print copy of the conversion and
subdivision plan approved by the DENR Center which bears the notation of the surveyorgeodetic engineer that "this survey is inside the alienable and disposable area, Project No.
27-B. L.C. Map No. 2623, certified on January 3, 1968 by the Bureau of Forestry."
Menguito v. Republic teaches, however, that reliance on such a notation to prove that the lot
is alienable is insufficient and does not constitute incontrovertible evidence to overcome the
presumption that it remains part of the inalienable public domain.
"To prove that the land in question formed part of the alienable and disposable lands of the
public domain, petitioners relied on the printed words which read: "This survey plan is inside
Alienable and Disposable Land Area, Project No. 27-B as per L.C. Map No. 2623, certified by
the Bureau of Forestry on January 3, 1968," appearing on Exhibit "E" (Survey Plan No. Swo13-000227).
This proof is not sufficient. Section 2, Article XII of the 1987 Constitution, provides: "All lands
of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of
potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural
resources are owned by the State. . . ."
For the original registration of title, the applicant (petitioners in this case) must overcome
the presumption that the land sought to be registered forms part of the public domain.
Unless public land is shown to have been reclassified or alienated to a private person by the
State, it remains part of the inalienable public domain. Indeed, "occupation thereof in the

concept of owner, no matter how long, cannot ripen into ownership and be registered as a
title." To overcome such presumption, incontrovertible evidence must be shown by the
applicant. Absent such evidence, the land sought to be registered remains inalienable.
In the present case, petitioners cite a surveyor geodetic engineers notation in Exhibit "E"
indicating that the survey was inside alienable and disposable land. Such notation does not
constitute a positive government act validly changing the classification of the land in
question.
Verily, a mere surveyor has no authority to reclassify lands of the public domain. By relying
solely on the said surveyors assertion, petitioners have not sufficiently proven that the land
in question has been declared alienable."31 (Citations omitted and underscoring supplied)
Therefore, even if Espinosas application may not be dismissed due to his failure to present
the original tracing cloth of the survey plan, there are numerous grounds for its denial. The
blueprint copy of the advanced survey plan may be admitted as evidence of the identity and
location of the subject property if: (a) it was duly executed by a licensed geodetic engineer;
(b) it proceeded officially from the Land Management Services (LMS) of the DENR; and (c) it
is accompanied by a technical description of the property which is certified as correct by the
geodetic surveyor who conducted the survey and the LMS of the DENR. As ruled in Republic
v. Guinto-Aldana,32the identity of the land, its boundaries and location can be established by
other competent evidence apart from the original tracing cloth such as a duly executed
blueprint of the survey plan and technical description:
Yet if the reason for requiring an applicant to adduce in evidence the original tracing cloth
plan is merely to provide a convenient and necessary means to afford certainty as to the
exact identity of the property applied for registration and to ensure that the same does not
overlap with the boundaries of the adjoining lots, there stands to be no reason why a
registration application must be denied for failure to present the original tracing cloth plan,
especially where it is accompanied by pieces of evidencesuch as a duly executed blueprint
of the survey plan and a duly executed technical description of the propertywhich may
likewise substantially and with as much certainty prove the limits and extent of the property
sought to be registered.33
However, while such blueprint copy of the survey plan may be offered as evidence of the
identity, location and the boundaries of the property applied for, the notation therein may
not be admitted as evidence of alienability and disposability. In Republic v. Heirs of Juan
Fabio,34 this Court enumerated the documents that are deemed relevant and sufficient to
prove that the property is already outside the inalienable public domain as follows:
In Republic v. T.A.N. Properties, Inc., we ruled that it is not enough for the Provincial
Environment and Natural Resources Office (PENRO) or CENRO to certify that a land is
alienable and disposable. The applicant for land registration must prove that the DENR
Secretary had approved the land classification and released the land of the public domain as
alienable and disposable, and that the land subject of the application for registration falls
within the approved area per verification through survey by the PENRO or CENRO. In
addition, the applicant must present a copy of the original classification of the land into
alienable and disposable, as declared by the DENR Secretary, or as proclaimed by the

President. Such copy of the DENR Secretarys declaration or the Presidents proclamation
must be certified as a true copy by the legal custodian of such official record.1wphi1 These
facts must be established to prove that the land is alienable and disposable. 35 (Citation
omitted)
Based on the foregoing, it appears that Espinosa cannot avail the benefits of either Section
14(1) of P.O. No. 1529 in relation to Section 48(b) of the PLA or Section 14(2) of P.O. No.
1529. Applying Section 14(1) of P.O. No. 1529 and Section 48(b) of the PLA, albeit improper,
Espinosa failed to prove that: (a) Isabel's possession of the property dated back to June 12,
1945 or earlier; and (b) the property is alienable and disposable. On the other hand,
applying Section 14(2) of P.O. No. 1529, Espinosa failed to prove that the property is
patrimonial. As to whether Espinosa was able to prove that his possession and occupation
and that of Isabel were of the character prescribed by law, the resolution of this issue has
been rendered unnecessary by the foregoing considerations.
WHEREFORE, premises considered, the petition is GIVEN DUE COURSE and GRANTED. The
Decision dated November 11, 2004 and Resolution dated February 13, 2006 of the Court of
Appeals in CA-G.R. CV No. 72456 are REVERSED and SET ASIDE and Domingo Espinosa's
application for registration of title over Lot No. 8499 of Cad. 545-D (New) located at
Barangay Cabangahan, Consolacion, Cebu is hereby DENIED for lack of merit. No
pronouncement as to costs.
SO ORDERED.

LEONCIO C. OLIVEROS, represented by his heirs, * MOISES DE LA CRUZ,** and the

HEIRS OF LUCIO DELA CRUZ, represented by FELIX DELA CRUZ, Petitioners, vs. SAN
MIGUEL CORPORATION, THE REGISTER OF DEEDS OF CALOOCAN CITY, and THE
REGISTER OF DEEDS OF VALENZUELA, METRO MANILA, Respondents.
G.R. No. 173531

February 1, 2012

DEL CASTILLO, J.:

Only holders of valid titles can invoke the principle of indefeasibility of Torrens titles.
Before the Court is a Petition for Review 1 of the April 21, 2006 Decision of the Court of
Appeals (CA) in CA-G.R. CV No. 59704, as well as its July 7, 2006 Resolution, denying
reconsideration of the assailed Decision. The dispositive portion of the April 21, 2006
Decision reads:
WHEREFORE, the appealed Decision dated August 12, 1997 is affirmed, subject to the
modification that the award of attorneys fees is reduced to P100,000.00.
SO ORDERED.2
The CA affirmed the trial courts judgment, which dismissed petitioners complaint for the
nullification of the title of San Miguel Corporations (SMC) predecessor-in-interest, Ramie
Textile (Ramitex), Inc., over Lot 1131 of the Malinta Estate and granted Ramitex prayer for
the cancellation of petitioner Leoncio C. Oliveros (Oliveros) title over the subject property.
Factual Antecedents
This case involves a parcel of land known as Lot 1131 (subject property) of the Malinta
Estate located in Barrio Bagbaguin of Valenzuela, Metro Manila.
Ramitex bought the subject property from co-owners Tomas Soriano (Soriano) and
Concepcion Lozada (Lozada) in 1957. On the basis of such sale, the Register of Deeds of
Bulacan (Bulacan RD) cancelled the vendors Transfer Certificate of Title (TCT) No.
293343 and issued TCT No. T-18460 on March 6, 1957 in favor of Ramitex.
Lot 1131 is just one of the 17 lots owned by Ramitex within the Malinta Estate. In 1986,
Ramitex consolidated and subdivided its 17 lots within the Malinta Estate into six lots only
under Consolidation Subdivision Plan Pcs-13-000535. 4 Lot 1131, which contains 8,950 square
meters, was consolidated with portions of Lots 1127-A and 1128-B to become consolidated
Lot No. 4 (consolidated Lot 4). The consolidated area of Lot 4 is 16,958 square meters. By
virtue of this consolidation, the Register of Deeds of Caloocan City (Caloocan RD) cancelled
Ramitex individual title to Lot 1131 (TCT No. T-18460) and issued a new title, TCT No. T137261, for the consolidated Lot 4.

Troubles began for Ramitex on February 22, 1989, when Oliveros filed a petition 5 in Branch
172 of the Regional Trial Court of Valenzuela (Valenzuela RTC) for the reconstitution of TCT
No. T-17186, his alleged title over Lot 1131 of the Malinta Estate (reconstitution case). 6 He
claimed that the original copy was destroyed in the fire that gutted the office of the Bulacan
RD on March 7, 1987.7
Ramitex filed its opposition to Oliveros petition 8 asserting that TCT No. T-17186 never
existed in the records of the Bulacan RD and cannot therefore be reconstituted. 9 The State,
through the provincial prosecutor, also opposed on the basis that Oliveros TCT No. T-17186,
which is embodied on a judicial form with Serial Number (Serial No.) 124604, does not come
from official sources. The State submitted a certification from the Land Registration
Authority (LRA) that its Property Section issued the form with Serial No. 124604 to the
Register of Deeds of Davao City (Davao RD), and not to the Bulacan RD, as claimed in
Oliveros alleged title.10
In light of Ramitex opposition and ownership claims over Lot 1131, Oliveros filed a
complaint for the declaration of nullity of Ramitex title over Lot 1131 on November 16, 1990
(nullity case).11 This complaint was docketed as Civil Case No. 3232-V-89 and raffled to
Branch 172 of the Valenzuela RTC. Oliveros claimed that he bought the subject property
sometime in November 1956 from the spouses Domingo De Leon and Modesta Molina, and
pursuant to such sale, the Bulacan RD issued TCT No. T-17186 in his favor on November 14,
1956.
He was joined in the suit by his alleged overseers to Lot 1131, petitioners Moises and Felix
Dela Cruz, who were judicially ejected by Ramitex from Lot 1127 two years before. 12
Oliveros and his co-petitioners alleged that Ramitex did not own Lot 1131 and that its
individual title to Lot 1131, TCT No. 18460, was fake and was used by Ramitex to consolidate
Lot 1131 with its other properties in the Malinta Estate. They further claimed that the
resulting consolidated Lot 4 is not actually a consolidation of several lots but only contains
Lot 1131, which belongs to Oliveros. Thus, they asked for the nullification as well of Ramitex
title to consolidated Lot 4,13 insofar as it unlawfully included Lot 1131.
Given the prejudicial nature of the nullity case on the reconstitution case, the latter was held
in abeyance until the resolution of the former.
Ramitex answered that its title over Lot 1131 is valid and claimed continuous possession and
ownership of the subject property. It prayed for the dismissal of petitioners complaint
against it for lack of merit.14 Ramitex counterclaimed that it is Oliveros title, TCT No. T17186, that should be cancelled for being spurious and non-existent.
During trial, 15 Oliveros testified that the Bulacan RD lost the original of his alleged title when
its office and records were destroyed by fire on March 7, 1987. He presented a certification
from the Bulacan RD to the effect that all its records, titles and documents were burned. 16 He
also presented a certification from the Caloocan RD to the effect that it did not receive the
original certificate of title bearing TCT No. T-17186 from the Bulacan RD, after Presidential
Decree No. 82417 removed jurisdiction over the Municipality of Valenzuela from the Province

of Bulacan to Caloocan.18 The Valenzuela RD likewise certified that it has no record of the
original of TCT No. T-17186.19
When questioned why the original of his title was not transmitted to the Caloocan RD and
the Valenzuela RD when the jurisdiction over the properties of the Malinta Estate was
transferred to these offices, Oliveros explained that it was only the titles with new
transactions that were transferred. Since his title was dormant, meaning he did not make
any transaction on it, it was never trasmitted to the Caloocan or Valenzuela RD.
Notably, Oliveros failed to present his owners duplicate of TCT No. T-17186 during the entire
trial but only presented a machine copy thereof. He claimed that he had already sold Lot
1131 to a certain Nelson Go of DNG Realty and Development Corporation (DNG Realty) in
June of 1991,20 and that the vendee has possession of the owners duplicate. Oliveros
explained that Go would not lend to him the owners duplicate for presentation to the court
because of a pending case for rescission of sale between them. 21 The complaint for
rescission alleged that Oliveros deceived and defrauded Nelson Go and DNG Realty by
misrepresenting ownership and actual possession of Lot 1131, which turned out to be owned
and possessed by Ramitex.22
Instead of his owners duplicate, Oliveros presented a lot data computation 23 from the Land
Management Bureau (LMB) as proof that Lot 1131 exists in the public records as comprising
16,958 square meters, not 8,950 as claimed by SMC and Ramitex. 24 He also showed an
undated and unapproved survey plan25 to prove that Lot 1131 was surveyed to contain the
said area.26 As further proof of his ownership, Oliveros presented his tax declarations
covering Lot 1131.
With respect to his allegation that Ramitex title to Lot 1131 is void, Oliveros pointed out that
the title does not contain the propertys technical description; it was issued on March 6,
1957, the same date that 13 other titles over other lots within the Malinta Estate were
issued in favor of Ramitex; and the signatures of the registrar, Soledad B. De Jesus, on the
said titles were dubious.27
On the other hand, SMC (having substituted28 Ramitex as party-defendant after buying
Ramitex interests over the subject property 29) presented officials from various government
offices to prove that Oliveros purported title to Lot 1131 does not actually exist in the
official records.
Fortunato T. Pascual (Pascual),30 who heads the Property Section of the Land Registration
Authority,31 explained that his office supplies all the RDs throughout the country with the
blank title forms, called Judicial Form No. 109-D. Starting in 1954, Judicial Forms No. 109-D
became accountable forms bearing unique serial numbers.32Once a form is used by a
registrar for issuing a land title, the registrar has to account for such forms by submitting a
report of consumption (of the title forms) to the LRA. 33 The Property Section of the LRA
maintains a record of all the title forms already used by the different registers of
deeds.34 Pascual then testified that, based on the LRAs Record of Consumption of Judical
Forms,35 the LRA issued Judicial Form No. 109-D with Serial No. 124604 to the Davao RD on
February 21, 1957, and not to the Bulacan RD sometime in 1956, as stated on Oliveros
purported title.36 As further proof that the Bulacan RD has not been issued a Judicial Form

No. 109-D with Serial No. 124604 in November 1956 (as stated in Oliveros title), Pascual
presented the record of consumption that was submitted by the Bulacan RD for the said
month and year. The record states that the Bulacan RD consumed or issued 52 pieces of
Judicial Form No. 109-D, with serial numbers starting from 113292 up to 113343 only. 37
Atty. Aludia P. Gadia (Gadia), the Registrar of Davao RD, confirmed Pascuals testimony. She
personally conducted the research and verifications from her office records that Judicial Form
No. 109-D bearing Serial No. 124604 was used for issuing TCT No. T-7522 on August 8, 1957
in the name of a certain Consuelo Javellana, married to Angel Javellana. She presented the
cancelled copy of TCT No. T-7522 to the court. 38 Gadia likewise attested to the fact that the
serial numbers close to Serial No. 124604 (e.g. 124599, 124600, 124601, etc.) are all
accounted for in Book No. 38 of the Davao RD. 39
SMC then assailed Oliveros Tax Declaration (TD) No. B-027-01995 over Lot 1131. It
presented Cesar Marquez (Marquez), the municipal assessor of the Municipality of
Valenzuela. Marquez testified that TD No. B-027-01995, which on its face states that it
covers Lot 1131 with TCT No. T-17186, 40 is actually a revision of TD No. B-027-01170, 41 which
covers Lot 1134 of the Malinta Estate with TCT No. T-193116. 42
Bartolome Garcia, the acting chief of the Realty Tax Division of the Office
of the Municipal Treasurer of Valenzuela, 43 corroborated Marquez testimony that it was only
on September 12, 198344 that Oliveros started paying real estate taxes, but the said
payments were for Lot 1134,45 not Lot 1131. Per the records of his office, Oliveros began
paying taxes for Lot 1131 only on March 12, 1990. On the other hand, Ramitex had been
paying realty taxes for Lot 1131 since 1967.46
Engineer Ernesto Erive (Engineer Erive), chief of the Surveys Division of the Land
Management Sector, testified that the lot data computation and unapproved survey plan
presented by Oliveros are used by geodetic engineers for reference purposes only, not for
registration purposes.47
Engineer Erive also pointed out that Oliveros title, which describes Lot 1131 as containing
16,958 square meters, is clearly erroneous. According to their office records, Lot 1131 of the
Malinta Estate contains 8,950 square meters only. He presented as proof the approved
survey plan for Lot 1131, Plan SP-2906. Engineer Erive explained that it was only after the
consolidation made by Ramitex that Lot 1131 became a part of consolidated Lot 4 with the
consolidated area of 16,958 square meters.48 Thus, Oliveros title, unapproved survey plan
and lot data computation all contain technical descriptions of the consolidated Lot 4 of
Ramitex Pcs-13-000-535, and not of Lot 1131 of the Malinta Estate.49
Engineer Erive dispelled doubts regarding the absence of a technical description on TCT No.
(T-18460) T-64433, Ramitex title over Lot 1131. He explained that such was the usual
practice with respect to lots within the Malinta Estate; that titles there usually include only
the lot number and the case number.50
SMC also debunked the alleged parent title, from which Oliveros title was

derived, TCT No. T-16921. For this purpose, SMC presented Christian Bautista (Bautista), the
land registration examiner from the Valenzuela RD, who testified that the only record it has
of TCT No. T-16921 pertains to Lot 20-D of the Lolomboy Estate in the name of Beatriz Dela
Cruz. It does not pertain to Lot 1131 of the Malinta Estate and is not in the name of Oliveros
alleged transferors, Domingo De Leon and Modesta Molina.51
In stark contrast, SMC established its claim to Lot 1131. Bautista presented the original
copies of Ramitex individual titles over the 16 parcels of land within the Malinta Estate, as
well as the original titles of the consolidated lots, 52 which are all properly recorded in the
Valenzuela RD.53 Bautista also brought to court TCT No. (T-29334) T-63790, which is the title
of Ramitexs alleged predecessors-in-interest to Lot 1131, Soriano and Lozada. 54
For his rebuttal, Oliveros presented Ramon Vasquez (Vasquez), a record custodian of the LMB
assigned to the Escolta Branch.55 Vasquez testified that their office has a record of an
unsigned and undated lot data computation for Lot 1131 of the Malinta Estate in the name
of Domingo De Leon.56 Upon cross examination, however, Vasquez admitted that the Escolta
branch had no record of survey plans for the Malinta Estate 57 and that a lot data
computation is not used as basis for the registration of land.58
Ruling of the Regional Trial Court59
The trial court found sufficient evidence to support the conclusion that Oliveros TCT No. T17186 does not exist. It gave due credence to the certification of the LRA that Bulacan RD
never possessed, hence could never have issued, Judicial Form No. 109-D with Serial No.
124604.60
It observed that the certification from the Bulacan RD only proved that its records and
documents were destroyed in the fire of March 1987. It did not, in the least, prove that TCT
No. T-17186 existed prior to the fire.61
Further, Oliveros failed to explain why the parent title of TCT No. T-17186 refers to a lot in
the Lolomboy Estate.62 He did not present the deed of sale allegedly executed in his favor by
his vendors Domingo de Leon and Modesta Molina; nor could he produce the correct title,
from which his TCT No. T-17186 was derived.63
On the other hand, the trial court found overwhelming evidence supporting SMCs claim as
to the validity of its title to the subject property. The title from which SMCs predecessor-ininterest Ramitex derived its own title, TCT No. (T-63790) 29334, was in the name of Ramitex
vendors Soriano and Lozada, and was still in existence in the Bulacan RD. Moreover, Entry
No. 39069 can be found on the dorsal portion thereof, which corroborates Ramitex claim
that it bought Lot 1131 from the said vendors.64
The trial court ruled in favor of SMC, thus:
WHEREFORE, judgment is hereby rendered as follows:
1). Declaring TCT No. T-17186 of Oliveros as not genuine and dismissing the aboveentitled case for lack of merit; and

2). Ordering the plaintiffs, jointly and severally, to pay defendant SMC the amount
of P700,000.00 as attorneys fees, plus the costs of suit.
SO ORDERED.65
Ruling of the Court of Appeals66
Petitioners appealed to the CA. They asked for the reversal of the finding that Oliveros title
over Lot 1131 is spurious and non-existent.67 Petitioners averred that TCT No. T-17186 was
issued earlier than Ramitex title, contains the technical description for Lot 1131 and is
signed by Soledad B. De Jesus, the registrar of the Bulacan RD. Thus, TCT No. T-17186 enjoys
the presumption of regularity accorded to every public instrument and thus, cannot be
collaterally attacked.68 Petitioners relied heavily on the alleged conclusiveness of Oliveros
title based on its earlier issuance.69
The appellate court affirmed the trial courts Decision.
After reviewing the factual findings of the trial court, the CA agreed that there is no evidence
that Oliveros title came from official sources. On the other hand, SMC adequately
established the existence and validity of its title (TCT No. T-18460), as well as those of its
predecessors titles those of Ramitex (TCT No. T-137261) and Soriano and Lozada (TCT No.
29334).70 Given that these titles exist in official sources, they are indefeasible unless and
until credible evidence is presented to obtain their annulment on grounds of fraud. In this
instance, the CA found that Oliveros failed to present such evidence and thus, sustained the
validity of SMCs title.
The CA however found the trial courts award of P700,000.00 as attorneys fees excessive,
and thus reduced the same to P100,000.00.71
Petitioners filed a Motion for Reconsideration,72 which was denied for lack of merit in the
appellate courts July 7, 2006 Resolution.73
Hence, this petition.
Petitioners Arguments74
Petitioners insist that the mere existence of Oliveros earlier title negates the conclusiveness
of Ramitex title.75Oliveros TCT No. T-17186, as the older title, should enjoy presumptive
conclusiveness of ownership and indefeasibility of title. Corollarily, Ramitexs title being a
later title should have the presumption of invalidity. Thus, SMC has the burden of
overcoming this presumption.76 Oliveros argues that SMC failed to prove the validity of its
title, which should be cancelled accordingly.
Petitioners then assail the CA Decision for allowing a collateral attack on Oliveros title. Since
the complaint filed below was for the declaration of nullity of Ramitexs title, not Oliveros
title, what occurred below when the trial and appellate courts nullified Oliveros title was a
collateral attack.77

Petitioners pray that Oliveros title over Lot 1131 be declared valid; while that of SMC be
declared null and void.
Respondents Arguments78
Respondent SMC argues that the principle of indefeasibility of titles applies only to an
existing valid title to the litigated property. In the instant case, SMC showed that Oliveros
title, while claiming priority, is actually spurious; thus, between SMC and Oliveros, it is only
SMC which has a valid title and in whose favor the doctrine of indefeasibility of title applies.
SMC further stresses that Oliveros cannot assert a right by virtue of a title, the existence of
which Oliveros cannot establish. By the best evidence rule, the contents of a title can only
be proved by presenting the original document. Secondary evidence, such as the ones
presented by Oliveros (photocopy of TCT No. T-17186, tax declaration, and unapproved land
surveys), are inadmissible until the offeror has laid the predicate for the presentation of
secondary evidence. In the instant case, Oliveros failed to lay the predicate for the
presentation of secondary evidence. The certifications he presented from the various RDs
attest only that their offices do not have a record of TCT No. T-17186. They did not certify
that TCT No. T-17186 existed in their records but was destroyed or transferred to another
office.
Moreover, Oliveros admits that his owners duplicate of TCT No. T-17186 is in the possession
of his vendee, DNG Realty. Since it is not lost or destroyed, Oliveros is not justified in not
presenting it in court. Oliveros explanation that DNG Realty will not lend him the title is
unacceptable because there is legal recourse for such recalcitrance, which is to compel DNG
Realty to present the duplicate copy in the instant case through a subpoena duces tecum.
Lastly, SMC argues against the validity of Oliveros title by reiterating the evidence they
presented during trial.
Issues
Petitioners present the following issues for this Courts resolution: 79
1. Whether the CA erred in applying the doctrines of indefeasibility and
conclusiveness of title in favor of respondent SMC;
2. Whether the decisions of the CA and the trial court allowed a collateral attack on
Oliveros certificate of title.
Our Ruling
Petitioners contend that the CA erred in holding that it was their burden to prove the
invalidity of SMCs title and that they failed to discharge such burden. They maintain that
the mere existence of a prior title in Oliveros name suffices to create the presumption that
SMCs title, being the later title, is void. 80 With that presumption, it was incumbent upon SMC
to prove the validity of its alleged title.

Petitioners are oversimplifying the rule. The principle that the earlier title prevails over a
subsequent one applies when there are two apparently valid titles over a single property.
The existence of the earlier valid title renders the subsequent title void because a single
property cannot be registered twice. As stated in Metropolitan Waterworks and Sewerage
Systems v. Court of Appeals,81 which petitioners themselves cite, "a certificate is not
conclusive evidence of title if it is shown that the same land had already been
registered and an earlier certificate for the same is in existence." Clearly, a mere
allegation of an earlier title will not suffice.
It is elementary that parties have the burden of proving their respective allegations. 82 Since
petitioners allege that they have a title which was issued earlier than SMCs title, it was their
burden to prove the alleged existence and priority of their title. The trial and appellate
courts shared conclusion that petitioners TCT No. T-17186 does not exist in the official
records is a finding of fact that is binding on this Court. Petitioners have not offered a reason
or pointed to evidence that would justify overturning this finding. Neither did they assert
that this factual finding is unsubstantiated by the records. Without a title, petitioners cannot
assert priority or presumptive conclusiveness.83
In contrast to petitioners, SMC adequately proved its title to Lot 1131. SMC proved that its
and its predecessors titles to Lot 1131 all exist in the official records, and petitioners failed
to present any convincing evidence to cast doubt on such titles. Thus, the CA correctly ruled
that SMCs title enjoys presumptive conclusiveness and indefeasibility under the Torrens
system.84
Petitioners argument that the ruling of the trial and appellate courts allowed a collateral
attack on his title is clearly unmeritorious and easily disposed of.
In the first place, the prohibition against collateral attack does not apply to spurious or nonexistent titles, since such titles do not enjoy indefeasibility. "Well-settled is the rule that the
indefeasibility of a title does not attach to titles secured by fraud and misrepresentation. In
view of these circumstances, it was as if no title was ever issued in this case to the
petitioner and therefore this is hardly the occasion to talk of collateral attack against a
title."85
Moreover, the attack on Oliveros title was not a collateral attack.1wphi1 "An action or
proceeding is deemed an attack on a title when the object of the action is to nullify the title,
and thus challenge the judgment pursuant to which the title was decreed. The attack is
direct when the object of the action is to annul or set aside such judgment, or to enjoin its
enforcement. On the other hand, it is indirect or collateral when, in an action or proceeding
to obtain a different relief, an attack on the judgment is nevertheless made as an incident
thereof."86
Here, SMC/Ramitex assailed the validity of Oliveros title as part of its counterclaim in an
action to declare SMC/Ramitexs title a nullity. A counterclaim is essentially a complaint filed
by the defendant against the plaintiff and stands on the same footing as an independent
action.87 Thus, Ramitexs counterclaim can be considered a direct attack on Oliveros title.

WHEREFORE, premises considered, the petition is DENIED. The April 21, 2006 Decision and
the July 7, 2006 Resolution of the Court of Appeals in CA-G.R. CV No. 59704 are AFFIRMED.
SO ORDERED.