III.

Indefeasibility
3. Borromeo vs. Descallar
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 159310

February 24, 2009

CAMILO F. BORROMEO, Petitioner,

vs.
ANTONIETTA O. DESCALLAR, Respondent.
DECISION
PUNO, C.J.:
What are the rights of an alien (and his successor-in-interest) who acquired
real properties in the country as against his former Filipina girlfriend in
whose sole name the properties were registered under the Torrens system?

erased from the document. But it could be noted that his signature
remained on the left hand margin of page 1, beside respondents signature
as buyer on page 3, and at the bottom of page 4 which is the last page.
Transfer Certificate of Title (TCT) Nos. 24790, 24791 and 24792 over the
properties were issued in respondents name alone.
Jambrich also formally adopted respondents two sons in Sp. Proc. No. 39MAN,4 and per Decision of the Regional Trial Court of Mandaue City dated
May 5, 1988.5
However, the idyll lasted only until April 1991. By then, respondent found a
new boyfriend while Jambrich began to live with another woman in Danao
City. Jambrich supported respondents sons for only two months after the
break up.
Jambrich met petitioner Camilo F. Borromeo sometime in 1986. Petitioner
was engaged in the real estate business. He also built and repaired
speedboats as a hobby. In 1989, Jambrich purchased an engine and some
accessories for his boat from petitioner, for which he became indebted to
the latter for about P150,000.00. To pay for his debt, he sold his rights and
interests in the Agro-Macro properties to petitioner for P250,000, as
evidenced by a "Deed of Absolute Sale/Assignment." 6 On July 26, 1991,
when petitioner sought to register the deed of assignment, he discovered
that titles to the three lots have been transferred in the name of
respondent, and that the subject property has already been mortgaged.

The facts are as follows:

Wilhelm Jambrich, an Austrian, arrived in the Philippines in 1983 after he
was assigned by his employer, Simmering-Graz Panker A.G., an Austrian
company, to work at a project in Mindoro. In 1984, he transferred to Cebu
and worked at the Naga II Project of the National Power Corporation. There,
he met respondent Antonietta Opalla-Descallar, a separated mother of two
boys who was working as a waitress at St. Moritz Hotel. Jambrich befriended
respondent and asked her to tutor him in English. In dire need of additional
income to support her children, respondent agreed. The tutorials were held
in Antoniettas residence at a squatters area in Gorordo Avenue.
Jambrich and respondent fell in love and decided to live together in a
rented house in Hernan Cortes, Mandaue City. Later, they transferred to
their own house and lots at Agro-Macro Subdivision, Cabancalan, Mandaue
City. In the Contracts to Sell dated November 18, 1985 1 and March 10,
19862 covering the properties, Jambrich and respondent were referred to as
the buyers. A Deed of Absolute Sale dated November 16, 1987 3 was
likewise issued in their favor. However, when the Deed of Absolute Sale was
presented for registration before the Register of Deeds, registration was
refused on the ground that Jambrich was an alien and could not acquire
alienable lands of the public domain. Consequently, Jambrichs name was

On August 2, 1991, petitioner filed a complaint against respondent for

recovery of real property before the Regional Trial Court of Mandaue City.
Petitioner alleged that the Contracts to Sell dated November 18, 1985 and
March 10, 1986 and the Deed of Absolute Sale dated November 16, 1987
over the properties which identified both Jambrich and respondent as
buyers do not reflect the true agreement of the parties since respondent
did not pay a single centavo of the purchase price and was not in fact a
buyer; that it was Jambrich alone who paid for the properties using his
exclusive funds; that Jambrich was the real and absolute owner of the
properties; and, that petitioner acquired absolute ownership by virtue of
the Deed of Absolute Sale/Assignment dated July 11, 1991 which Jambrich
executed in his favor.
In her Answer, respondent belied the allegation that she did not pay a
single centavo of the purchase price. On the contrary, she claimed that she
"solely and exclusively used her own personal funds to defray and pay for
the purchase price of the subject lots in question," and that Jambrich, being
an alien, was prohibited to acquire or own real property in the Philippines.
At the trial, respondent presented evidence showing her alleged financial
capacity to buy the disputed property with money from a supposed copra

business. Petitioner, in turn, presented Jambrich as his witness and

documentary evidence showing the substantial salaries which Jambrich
received while still employed by the Austrian company, Simmering-Graz
Panker A.G.
In its decision, the court a quo found
Evidence on hand clearly show that at the time of the purchase and
acquisition of [the] properties under litigation that Wilhelm Jambrich was
still working and earning much. This fact of Jambrich earning much is not
only supported by documentary evidence but also by the admission made
by the defendant Antoniet[t]a Opalla. So that, Jambrichs financial capacity
to acquire and purchase the properties . . . is not disputed. 7
xxx
On the other hand, evidence . . . clearly show that before defendant met
Jambrich sometime in the latter part of 1984, she was only working as a
waitress at the St. Moritz Hotel with an income of P1,000.00 a month and
was . . . renting and living only in . . . [a] room at . . . [a] squatter area at
Gorordo Ave., Cebu City; that Jambrich took pity of her and the situation of
her children that he offered her a better life which she readily accepted. In
fact, this miserable financial situation of hers and her two children . . . are
all stated and reflected in the Child Study Report dated April 20, 1983
(Exhs. "G" and "G-1") which facts she supplied to the Social Worker who
prepared the same when she was personally interviewed by her in
connection with the adoption of her two children by Wilhelm Jambrich. So
that, if such facts were not true because these are now denied by her . . .
and if it was also true that during this time she was already earning as
much as P8,000.00 to P9,000.00 as profit per month from her copra
business, it would be highly unbelievable and impossible for her to be living
only in such a miserable condition since it is the observation of this Court
that she is not only an extravagant but also an expensive person and not
thrifty as she wanted to impress this Court in order to have a big saving as
clearly shown by her actuation when she was already cohabiting and living
with Jambrich that according to her . . . the allowance given . . . by him in
the amount of $500.00 a month is not enough to maintain the education
and maintenance of her children.8
This being the case, it is highly improbable and impossible that she could
acquire the properties under litigation or could contribute any amount for
their acquisition which according to her is worth more than P700,000.00
when while she was working as [a] waitress at St. Moritz Hotel
earning P1,000.00 a month as salary and tips of more or less P2,000.00 she
could not even provide [for] the daily needs of her family so much so that it
is safe to conclude that she was really in financial distress when she met
and accepted the offer of Jambrich to come and live with him because that

was a big financial opportunity for her and her children who were already
abandoned by her husband.9
xxx
The only probable and possible reason why her name appeared and was
included in [the contracts to sell dated November 18, 1985 and March 10,
1986 and finally, the deed of absolute sale dated November 16, 1987] as
buyer is because as observed by the Court, she being a scheming and
exploitive woman, she has taken advantage of the goodness of Jambrich
who at that time was still bewitched by her beauty, sweetness, and good
attitude shown by her to him since he could still very well provide for
everything she needs, he being earning (sic) much yet at that time. In fact,
as observed by this Court, the acquisition of these properties under
litigation was at the time when their relationship was still going smoothly
and harmoniously.10 [Emphasis supplied.]
The dispositive portion of the Decision states:
WHEREFORE, . . . Decision is hereby rendered in favor of the plaintiff and
against the defendant Antoniet[t]a Opalla by:
1) Declaring plaintiff as the owner in fee simple over the
residential house of strong materials and three parcels of land
designated as Lot Nos. 1, 3 and 5 which are covered by TCT Nos.
24790, 24791 and 24792 issued by the Register of Deeds of
Mandaue City;
2) Declaring as null and void TCT Nos. 24790, 24791 and 24792
issued in the name of defendant Antoniet[t]a Descallar by the
Register of Deeds of Mandaue City;
3) Ordering the Register of Deeds of Mandaue City to cancel TCT
Nos. 24790, 24791 and 24792 in the name of defendant
Antoniet[t]a Descallar and to issue new ones in the name of
plaintiff Camilo F. Borromeo;
4) Declaring the contracts now marked as Exhibits "I," "K" and "L"
as avoided insofar as they appear to convey rights and interests
over the properties in question to the defendant Antoniet[t]a
Descallar;
5) Ordering the defendant to pay plaintiff attorneys fees in the
amount of P25,000.00 and litigation expenses in the amount
of P10,000.00; and,

6) To pay the costs.11

Respondent appealed to the Court of Appeals. In a Decision dated April 10,
2002,12 the appellate court reversed the decision of the trial court. In ruling
for the respondent, the Court of Appeals held:
We disagree with the lower courts conclusion. The circumstances involved
in the case cited by the lower court and similar cases decided on by the
Supreme Court which upheld the validity of the title of the subsequent
Filipino purchasers are absent in the case at bar. It should be noted that in
said cases, the title to the subject property has been issued in the name of
the alien transferee (Godinez et al., vs. Fong Pak Luen et al., 120 SCRA 223
citing Krivenko vs. Register of Deeds of Manila, 79 Phils. 461; United Church
Board for World Ministries vs. Sebastian, 159 SCRA 446, citing the case of
Sarsosa Vda. De Barsobia vs. Cuenco, 113 SCRA 547; Tejido vs. Zamacoma,
138 SCRA 78). In the case at bar, the title of the subject property is not in
the name of Jambrich but in the name of defendant-appellant. Thus,
Jambrich could not have transferred a property he has no title thereto. 13
Petitioners motion for reconsideration was denied.
Hence, this petition for review.
Petitioner assigns the following errors:
I. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN
DISREGARDING RESPONDENTS JUDICIAL ADMISSION AND OTHER
OVERWHELMING EVIDENCE ESTABLISHING JAMBRICHS PARTICIPATION,
INTEREST AND OWNERSHIP OF THE PROPERTIES IN QUESTION AS FOUND
BY THE HONORABLE TRIAL COURT.
II. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING
THAT JAMBRICH HAS NO TITLE TO THE PROPERTIES IN QUESTION AND MAY
NOT THEREFORE TRANSFER AND ASSIGN ANY RIGHTS AND INTERESTS IN
FAVOR OF PETITIONER.
III. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN REVERSING
THE WELL-REASONED DECISION OF THE TRIAL COURT AND IN IMPOSING
DOUBLE COSTS AGAINST HEREIN PETITIONER (THEN, PLAINTIFFAPPELLEE).14
First, who purchased the subject properties?
The evidence clearly shows, as pointed out by the trial court, who between
respondent and Jambrich possesses the financial capacity to acquire the

properties in dispute. At the time of the acquisition of the properties in

1985 to 1986, Jambrich was gainfully employed at Simmering-Graz Panker
A.G., an Austrian company. He was earning an estimated monthly salary
of P50,000.00. Then, Jambrich was assigned to Syria for almost one year
where his monthly salary was approximately P90,000.00.
On the other hand, respondent was employed as a waitress from 1984 to
1985 with a monthly salary of not more than P1,000.00. In 1986, when the
parcels of land were acquired, she was unemployed, as admitted by her
during the pre-trial conference. Her allegations of income from a copra
business were unsubstantiated. The supposed copra business was actually
the business of her mother and their family, with ten siblings. She has no
license to sell copra, and had not filed any income tax return. All the
motorized bancas of her mother were lost to fire, and the last one left
standing was already scrap. Further, the Child Study Report15 submitted by
the Department of Social Welfare and Development (DSWD) in the adoption
proceedings of respondents two sons by Jambrich disclosed that:
Antonietta tried all types of job to support the children until she was
accepted as a waitress at St. Moritz Restaurant in 1984. At first she had no
problem with money because most of the customers of St. Moritz are (sic)
foreigners and they gave good tips but towards the end of 1984 there were
no more foreigners coming because of the situation in the Philippines at
that time. Her financial problem started then. She was even renting a small
room in a squatters area in Gorordo Ave., Cebu City. It was during her time
of great financial distress that she met Wilhelm Jambrich who later offered
her a decent place for herself and her children. 16
The DSWD Home Study Report17 further disclosed that:
[Jambrich] was then at the Restaurant of St. Moritz when he saw Antonietta
Descallar, one of the waitresses of the said Restaurants. He made friends
with the girl and asked her to tutor him in [the] English language.
Antonietta accepted the offer because she was in need of additional income
to support [her] 2 young children who were abandoned by their father.
Their session was agreed to be scheduled every afternoon at the residence
of Antonietta in the squatters area in Gorordo Avenue, Cebu City. The
Austrian was observing the situation of the family particularly the children
who were malnourished. After a few months sessions, Mr. Jambrich offered
to transfer the family into a decent place. He told Antonietta that the place
is not good for the children. Antonietta who was miserable and financially
distressed at that time accepted the offer for the sake of the children. 18
Further, the following additional pieces of evidence point to Jambrich as the
source of fund used to purchase the three parcels of land, and to construct
the house thereon:

(1) Respondent Descallar herself affirmed under oath, during her

re-direct examination and during the proceedings for the adoption
of her minor children, that Jambrich was the owner of the
properties in question, but that his name was deleted in the Deed
of Absolute Sale because of legal constraints. Nonetheless, his
signature remained in the deed of sale, where he signed as buyer.
(2) The money used to pay the subject parcels of land in
installments was in postdated checks issued by Jambrich.
Respondent has never opened any account with any bank.
Receipts of the installment payments were also in the name of
Jambrich and respondent.
(3) In 1986-1987, respondent lived in Syria with Jambrich and her
two children for ten months, where she was completely under the
support of Jambrich.
(4) Jambrich executed a Last Will and Testament, where he, as
owner, bequeathed the subject properties to respondent.
Thus, Jambrich has all authority to transfer all his rights, interests and
participation over the subject properties to petitioner by virtue of the Deed
of Assignment he executed on July 11, 1991.
Well-settled is the rule that this Court is not a trier of facts. The findings of
fact of the trial court are accorded great weight and respect, if not finality
by this Court, subject to a number of exceptions. In the instant case, we
find no reason to disturb the factual findings of the trial court. Even the
appellate court did not controvert the factual findings of the trial court.
They differed only in their conclusions of law.

disputed house and lots was the Austrian Wilhelm Jambrich, what now is
the effect of registration of the properties in the name of respondent?
It is settled that registration is not a mode of acquiring ownership. 21 It is
only a means of confirming the fact of its existence with notice to the world
at large.22 Certificates of title are not a source of right. The mere possession
of a title does not make one the true owner of the property. Thus, the mere
fact that respondent has the titles of the disputed properties in her name
does not necessarily, conclusively and absolutely make her the owner. The
rule on indefeasibility of title likewise does not apply to respondent. A
certificate of title implies that the title is quiet, 23and that it is perfect,
absolute and indefeasible.24 However, there are well-defined exceptions to
this rule, as when the transferee is not a holder in good faith and did not
acquire the subject properties for a valuable consideration. 25 This is the
situation in the instant case. Respondent did not contribute a single
centavo in the acquisition of the properties. She had no income of her own
at that time, nor did she have any savings. She and her two sons were then
fully supported by Jambrich.
Respondent argued that aliens are prohibited from acquiring private land.
This is embodied in Section 7, Article XII of the 1987 Constitution, 26 which is
basically a reproduction of Section 5, Article XIII of the 1935
Constitution,27and Section 14, Article XIV of the 1973 Constitution. 28 The
capacity to acquire private land is dependent on the capacity "to acquire or
hold lands of the public domain." Private land may be transferred only to
individuals or entities "qualified to acquire or hold lands of the public
domain." Only Filipino citizens or corporations at least 60% of the capital of
which is owned by Filipinos are qualified to acquire or hold lands of the
public domain. Thus, as the rule now stands, the fundamental law explicitly
prohibits non-Filipinos from acquiring or holding title to private lands,
except only by way of legal succession or if the acquisition was made by a
former natural-born citizen.29

Further, the fact that the disputed properties were acquired during the
couples cohabitation also does not help respondent. The rule that coownership applies to a man and a woman living exclusively with each other
as husband and wife without the benefit of marriage, but are otherwise
capacitated to marry each other, does not apply. 19 In the instant case,
respondent was still legally married to another when she and Jambrich lived
together. In such an adulterous relationship, no co-ownership exists
between the parties. It is necessary for each of the partners to prove his or
her actual contribution to the acquisition of property in order to be able to
lay claim to any portion of it. Presumptions of co-ownership and equal
contribution do not apply.20

Therefore, in the instant case, the transfer of land from Agro-Macro

Development Corporation to Jambrich, who is an Austrian, would have been
declared invalid if challenged, had not Jambrich conveyed the properties to
petitioner who is a Filipino citizen. In United Church Board for World
Ministries v. Sebastian,30 the Court reiterated the consistent ruling in a
number of cases31 that if land is invalidly transferred to an alien who
subsequently becomes a Filipino citizen or transfers it to a Filipino, the flaw
in the original transaction is considered cured and the title of the transferee
is rendered valid. Applying United Church Board for World Ministries, the
trial court ruled in favor of petitioner, viz.:

Second, we dispose of the issue of registration of the properties in the

name of respondent alone. Having found that the true buyer of the

[W]hile the acquisition and the purchase of (sic) Wilhelm Jambrich of the
properties under litigation [were] void ab initio since [they were] contrary to
the Constitution of the Philippines, he being a foreigner, yet, the acquisition

of these properties by plaintiff who is a Filipino citizen from him, has cured
the flaw in the original transaction and the title of the transferee is valid.

SPOUSES
CARPO,

MORRIS

CARPO

and

SOCORRO

Petitioners,
The trial court upheld the sale by Jambrich in favor of petitioner and
ordered the cancellation of the TCTs in the name of respondent. It declared
petitioner as owner in fee simple of the residential house of strong
materials and three parcels of land designated as Lot Nos. 1, 3 and 5, and
ordered the Register of Deeds of Mandaue City to issue new certificates of
title in his name. The trial court likewise ordered respondent to pay
petitioner P25,000 as attorneys fees and P10,000 as litigation expenses, as
well as the costs of suit.
We affirm the Regional Trial Court.

G.R. No. 166577

Present:
PUNO, C.J.,
Chairperson,
CARPIO MORALES,
LEONARDO-DE CASTRO,
BERSAMIN, and
VILLARAMA, JR., JJ.

- versus -

AYALA LAND, INCORPORATED,

Respondent.

Promulgated:
February 3, 2010

The rationale behind the Courts ruling in United Church Board for World
Ministries, as reiterated in subsequent cases,32 is this since the ban on
aliens is intended to preserve the nations land for future generations of
Filipinos, that aim is achieved by making lawful the acquisition of real
estate by aliens who became Filipino citizens by naturalization or those
transfers made by aliens to Filipino citizens. As the property in dispute is
already in the hands of a qualified person, a Filipino citizen, there would be
no more public policy to be protected. The objective of the constitutional
provision to keep our lands in Filipino hands has been achieved.
IN VIEW WHEREOF, the petition is GRANTED. The Decision of the Court of
Appeals in C.A. G.R. CV No. 42929 dated April 10, 2002 and its Resolution
dated July 8, 2003 are REVERSED and SET ASIDE. The Decision of the
Regional Trial Court of Mandaue City in Civil Case No. MAN-1148 is
REINSTATED.

x----------------------------------------------------x
DECISION

SO ORDERED.

LEONARDO-DE CASTRO, J.:

43. Carpo vs. Ayala Land

In the instant petition for review on certiorari under Rule 45 of the

Rules of Court, petitioners seek to set aside and annul the Decision [1] dated
December 22, 2003 of the Court of Appeals (CA) in CA-G.R. CV No. 61784,
which reversed and set aside the Summary Judgment[2] dated December
22, 1998 of the Regional Trial Court (RTC) of Las Pias City, Branch
255. Also subject of the present petition is the CA Resolution [3] dated
December 16, 2004 which denied the motion for reconsideration of the
earlier decision.
FIRST DIVISION

follows:

A summary of the facts, as culled from the records of the case,

On February 16, 1995, petitioner spouses Morris and Socorro

Carpo (Carpos) filed a Complaint for Quieting of Title [4] with the RTC of
Makati City against Ayala Corporation, Ayala Property Ventures Corporation

(APVC), and the Register of Deeds of Las Pias, docketed as Civil Case No.
95-292.
In their Complaint, the Carpos claimed to be the owners of a
171,209-square meter parcel of land covered by Transfer Certificate of Title
(TCT) No. 296463 issued in their names. [5] They further alleged that Ayala
Corporation was claiming to have titles (specifically, TCT Nos. 125945, T4366, T-4367 and T-4368) over the property covered by the Carpos TCT No.
296463 and that Ayala Corporation had made such property its equity
contribution
in
APVC
to
be
developed
into
a
residential
subdivision. Attached as annexes to the complaint were photocopies of:
(a) TCT No. 296463 issued on August 13, 1970 in the name of the
Carpos, covering a parcel of land (Lot 3, plan Psu-56007) located in the
Barrio of Almanza, Las Pias with an area of 171,309 square meters;
(b) TCT No. 125945 issued on April 6, 1988 in the name of Ayala
Corporation, covering a parcel of land (Lot 3, Plan Psu-80886) located in Bo.
Tindig na Manga, Las Pias with an area of 171,309 square meters;
(c) TCT No. T-4367 issued on May 18, 1988 in the name of Ayala
Corporation, covering a parcel of land (Lot 2, plan Psu-47035) located in the
Sitio of May Kokak, Bo. of Almanza, Las Pias with an area of 218,523
square meters; and
(d) TCT No. T-4368 issued on May 18, 1988 in the name of Ayala
Corporation, covering a parcel of land (Lot 3, plan Psu-47035) located in the
Sitio of May Kokak, Bo. of Almanza, Las Pias with an area of 155,345
square meters.
No copy of TCT No. T-4366 was attached to the complaint.
According to the complaint, TCT Nos. 125945, T-4366, T-4367 and
T-4368 and their derivatives appear to have been issued in the name of
Ayala and purport to cover and embrace the Carpos property or portion
thereof duly covered registered under the already indefeasible and
incontrovertible TCT [No.] 296463 are inherently invalid and enforceable
(sic) for not being the duly issued derivatives of the Carpos title. [6] The
Carpos additionally applied for a restraining order and writ of preliminary
injunction to enjoin Ayala Corporation and APVC from doing construction
and development works on the properties in purported violation of the
Carpos rights.
The complaint prayed that the trial court render judgment:
(1) canceling and declaring void TCT Nos. 125945, T-4366, T-4367,
T-4368 and all alleged derivatives thereof, issued in the name of Ayala
Corporation and/or APVC over the properties or portion thereof embraced in
the Carpos TCT No. 296463 and issuing a writ of possession in favor of the
Carpos and/or ordering Ayala Corporation and APVC to surrender to the

Carpos the properties or portion thereof being occupied by the said

corporations under inherently invalid or void titles; (2) declaring TCT No.
296463 issued in their names as valid and the Carpos as the owners of the
property described therein including the parcels of land being claimed and
occupied by Ayala [Corporation] and APVC withou[t] valid and enforceable
titles; and (3) ordering Ayala Corporation and APVC to pay jointly and
severally the amount of P100,000 as attorneys fees plus costs of suit and
litigation expenses.[7]
On March 10, 1995, before defendants could file an answer,
petitioners filed an Amended Complaint, impleading respondent Ayala
Land, Incorporated (ALI) in lieu of Ayala Corporation after purportedly
verifying with the Register of Deeds of Las Pias that the title to the subject
property was registered in the name of ALI and not Ayala Corporation. [8]
On October 12, 1995 and January 12, 1996, ALI filed its Answer
with Counterclaims and Opposition to Application for Restraining Order and
Writ of Preliminary Injunction[9] and Pre-trial Brief with Motion to
Admit Amended Answer,[10] respectively.
In its Amended Answer, ALI alleged that APVC no longer exists
having been merged with ALI in 1991. ALI pointed out that the areas
covered by TCT Nos. T-4366, T-4367, and T-4368 do not overlap with the
Carpos claimed property and the dispute pertained only to the land
covered by the Carpos TCT No. 296463 and TCT No. T-5333 in the name of
Las Pias Ventures, Inc. (LPVI) which was derived from TCT No. 125945 in
the name of Ayala Corporation. It appeared that Ayala Corporation
contributed the property to LPVI and LPVI had, in turn, also merged with
ALI. Further, ALI alleged that it is the true owner of the property covered by
TCT No. T-5333 as it traces back its title to Original Certificate of Title (OCT)
No. 242 issued in 1950 while the Carpos title was derived from OCT No.
8575 issued only in 1970. ALI also claimed the Carpos complaint was
barred by res judicata in view of the 1941 decision of this Court in Guico v.
San Pedro[11]which upheld the ownership of a certain Eduardo Guico over
the subject property as Lot 3, of Psu-80886 over the claim of a certain
Florentino Baltazar who was asserting ownership of the same under his
plan, Psu-56007.
During the pendency of the case, ALI secured a title in its own
name, TCT No. T-41262, over the property previously covered by TCT No. T5333.[12]
In the Order[13] dated March 6, 1996, the Makati RTC ruled that the
present case was an action in rem and directed the transfer of the case to
the RTC of Las Pias where the disputed property is located. The case was
thereafter assigned to Branch 255 of the Las Pias RTC and docketed as
Civil Case No. 96-0082.
On December 17, 1996, ALI filed a Motion for Summary
Judgment on the ground that there was allegedly no genuine issue as to

any material fact and the only issue for the court to resolve was a purely
legal one which of the two (2) titles should be accorded
priority. According to ALI, the parties were relying on their respective TCTs,
and since ALI admittedly traces its title to OCT No. 242 which was issued
more than twenty (20) years earlier than the Carpos predecessors title
(OCT No. 8575), its title is, thus, superior. Expectedly, the Carpos filed an
opposition to the motion for summary judgment, arguing that there were
genuine issues and controversies to be litigated.
In an Order dated April 7, 1997, the RTC denied ALIs motion for
summary judgment. This denial was challenged in a petition
for certiorari with the CA in CA-G.R. SP No. 44243.
In a decision[14] dated September 25, 1997, the CA granted ALIs
petition and ordered the RTC to render a summary judgment. Both parties
moved for reconsideration of the CA Decision. ALI filed a motion for partial
reconsideration, entreating the CA itself to render the summary judgment
in the interest of judicial economy and on a claim that the sole issue was
legal. The Carpos, in their motion, insisted that there were genuine issues
in this case that must be threshed out in a trial. Both motions were denied
in the CA Resolution dated January 12, 1998.[15]
Both parties elevated the matter to this Court in separate petitions
for review on certiorari. In G.R. No. 132259, ALI assailed the CAs refusal to
render a summary judgment, while in G.R. No. 132440, the Carpos assailed
the CAs ruling that trial was unnecessary.
In separate minute Resolutions,[16] the Court denied both
petitions. Both parties motions for reconsideration were likewise denied.
Accordingly, the RTC rendered a Summary Judgment dated
December 22, 1998, finding the Carpos title superior to that of ALI and
ruling, thus:
Upon the other hand, this Court is not inclined to
concur with Ayalas claim of the validity of its TCT No. T5333 and alleged OCT No. 242 absent of any admission to
that effect by the plaintiffs in their complaint. A reading
of the defendants answer reveals that OCT No. 242
covers the property surveyed under SWO, but the
pleadings on file fail to allege that the same was
approved by the Director of the Bureau of Lands, thereby
justifying this court to be skeptical of the validity of the
issuance of OCT No. 242. In original land registration
cases, it is mandatory that the application should be
accompanied by a survey plan of the property applied for
registration, duly approved by the Director of the Bureau
of Lands. A survey plan without the approval of the
Director of the Bureau of Lands has the character of being
of dubious origin and it is not therefore worthy of being

accepted as evidence. The property being claimed by the

defendant ALI, allegedly registered under OCT No. 242, is
shown to have been surveyed under SWO and not
bearing the approval of the Director of the Bureau of
Lands. Any title issued emanating from a survey plan
without the approval of the Director of the Bureau of
Lands is tainted with irregularity and therefore void, as
ruled in Republic Cement Corporation vs. Court of
Appeals, et al., 198 SCRA 734. In the said case, the
Supreme Court held: That unless a survey plan is duly
approved by the Director of Lands the same is of dubious
value and is not acceptable as evidence. Indubitably,
therefore, the reported survey and its alleged results are
not entitled to credit and should be rejected.
The submission of the plan is a statutory
requirement of mandatory character and unless the plan
and its technical description are duly approved by the
Director of Lands, the same are not of much value
(Republic vs. Vera, 120 SCRA 210). In another case, it
was ruled that the Land Registration Commission has no
authority to approve original survey plans (Director of
Lands, et al. vs. Honorable Salvador Reyes, et al., 68
SCRA 177).
Evidently, the SWO survey of the property which
defendant ALI claimed to have been originated from OCT
No. 242 had not been approved by the Director of the
Bureau of Lands, but was apparently prepared and
approved by the then Land Registration Commissioner
and under the law, the same is void.
It will also be noted that aside from the
admissions made by defendant ALI in its answer, it clearly
appears in its title TCT No. T-5333 that the date of survey
was on July 28, 1930. Plaintiffs property covered by TCT
No. 296463 was surveyed on January 4-6, 1927. This
means that plaintiffs predecessor-in-interest had claimed
ownership of the property ahead of that of defendant
ALIs predecessor-in-interest. The principle of prior
registration cannot be applied in this case because the
land previously surveyed cannot anymore be the subject
of another survey, and there is already a record of a prior
survey in the Bureau of Lands. This is precisely the
reason why the survey plan has to be approved by the
Director of the Bureau of Lands. This must be the reason
why the later survey in favor of Ayalas predecessor-ininterest did not anymore bear the approval of the Director
of Lands because had it been submitted for approval, the
records of the Bureau of Lands will show that an earlier

survey of the same land had already been made and

approved by the Director of the Bureau of Lands.
Evidently, Ayalas claim of superiority of its title
over that of the plaintiffs cannot therefore be
sustained. Be that as it may, the fact that cannot be
disputed on the basis of Ayalas answer is its admission
that SWO survey without the approval of the Director of
the Bureau of Lands was submitted in the alleged
registration proceedings, rendering the decree and the
title issued thereunder to be tainted with irregularity and
therefore void.
WHEREFORE, in the light of the foregoing and
the prevailing jurisprudence on the matter, judgment is
hereby rendered:
(a)

(b)

(c)

(d)

Declaring TCT No. 296463 in the

name of the plaintiffs Spouses Morris G.
Carpo and Socorro R. Carpo as valid and
legal, and superior to that of defendant
Ayalas TCT No. T-5333;
Declaring TCT No. T-5333, TCT No.
125945, TCT No. T-6055, TCT No. 4366,
TCT No. 4367 and TCT No. 4368 and
their derivatives as null and void;
Ordering the defendant Ayala Land,
Inc. to pay the sum of P100,000.00 as
attorneys fees; and
To pay the costs.[17]

On January 5, 1999, ALI filed a notice of appeal but the same was
dismissed by the CA in a Resolution[18] dated May 14, 1999 for failure to pay
the full amount of docket fees. In its motion for reconsideration, ALI
pointed out that it paid the full amount assessed by the cash clerk on duty
at the RTC Las Pias. The motion was also denied, prompting ALI to file with
this Court a petition for review docketed as G.R. No. 140162. Finding ALIs
petition meritorious, the Court, in a Decision[19] dated November 22, 2000,
reversed the CAs dismissal of ALIs appeal and remanded the same to the
CA for further proceedings.
On December 22, 2003, the CA rendered the herein challenged
decision in favor of ALI, the dispositive portion of which reads as follows:
instant

FOR THE FOREGOING DISQUISITIONS, the

appeal is GRANTED, the assailed Summary

Judgment of the Regional Trial Court of Las Pias, Branch

255,
dated
December
22,
1998,
is
herebyREVERSED and SET ASIDE, and a new one is
rendered as follows:
(1)
TCT No. 41262, formerly TCT No. T5333, in the name of defendant-appellant Ayala Land,
Incorporated is hereby declared to be the VALID title to
the subject property;
(2)
TCT No. 296463 issued in the name
of plaintiffs-appellees is declared to be NULL and VOID;
(3)
The concerned Register of Deeds is
hereby ORDERED to cancel plaintiffs-appellees TCT No.
296463, and any and all titles issued covering the subject
property, for being spurious and void, and of no force and
effect.[20]
The Carpos filed their motion for reconsideration but the same was
denied by the CA in its Resolution dated December 16, 2004. Hence, the
instant petition for review filed by Socorro Carpo and the heirs of Morris
Carpo.[21] The Petition contained the following assignment of errors:
A
THE COURT OF APPEALS ERRED IN
DECLARING THAT THE TITLE OF RESPONDENT IS VALID
EVEN WITHOUT THE REQUISITE SURVEY PLAN APPROVED
BY THE DIRECTOR OF LANDS.
B.
THE COURT OF APPEALS ERRED IN
DECLARING PETITIONERS GUILTY OF LACHES AND
PRESCRIPTION.
C.
THE COURT OF APPEALS ERRED IN
DECLARING THAT THE RTC RELIED HEAVILY ON AN
ALLEGED ADMISSION BY RESPONDENT OF THE VALIDITY
OF THE TITLE OF PETITIONERS OVER THE DISPUTED
PARCEL OF LAND.
D.
THE COURT OF APPEALS ERRED IN
DECLARING THAT THERE IS RES JUDICATA AGAINST
PETITIONERS BASED ON THE CASE OF GUICO V. SAN
PEDRO, ET AL., 72 PHIL 415, WITHOUT PROPER
DETERMINATION OF WHETHER THE FACTS IN SAID CASE
ARE DIRECTLY APPLICABLE TO THIS CASE AND WHETHER
THE ELEMENTS OF RES JUDICATA ARE PRESENT.[22]
Petitioners prayed that this Court render a decision: (a) reversing and
setting aside the CA Decision dated December 22, 2003 and Resolution

dated December 16, 2004; (b) reinstating and affirming in toto the RTCs
Summary Judgment dated December 22, 1998; or in the alternative (c)
remanding the case to the RTC for further proceedings.
After a thorough review of the records, we deny the petition and
concur with the CA that the Summary Judgment rendered by the trial court
should be reversed and set aside.
Preliminary
discussion
regarding subject matter
of the controversy
At the outset, it should be noted that the trial court in its Summary
Judgment declared null and void (a) TCT No. T-5333 (and its antecedent,
TCT No. [125945] T-6055A) covering a parcel of land with an area of
171,309 square meters; (b) TCT No. T-4366 with a land area of 254,085
square meters; (c) TCT No. T-4367 with a land area of 218,523 square
meters; and (d) TCT No. T-4368 with a land area of 155,345 square meters,
despite the lack of evidence of identity of the properties described in TCT
Nos. T-4366, T-4367 and T-4368 with the property covered by the Carpos
TCT No. 296463 or any portion of said property claimed by petitioners. This
was grievous and palpable error on the part of the trial court considering
that the property being claimed by the Carpos under their TCT No. 296463
had an area of only 171,309 square meters and the total area of the
properties in the titles invalidated by the trial court was 799,262 square
meters.
It must be emphasized that in CA-G.R. SP No. 44243, involving the
same parties, the CA ruled that:
On the other hand, defendant ALI, in its
responsive pleading did not deny the existence of a title
in the name of the plaintiffs/private respondents. Instead,
it alleged:
14. The parcel of land
described in TCT No. 296463, issued in
the name of the plaintiffs, completely
overlaps the property covered by ALIs
TCT No. T-5333. But TCT No. T-296463
traces itself to OCT No. 8575 which was
issued on August 12, 1970, long after
OCT No. 242 (the title from which ALIs
TCT No. T-5333 was derived) was issued
on May 9, 1950 (on the basis of Decree
of Registration No. 2917, Record No.
43516). Hence, ALIs TCT No. T-5333 is
superior to TCT No. 296463. xxx.

This is an admission that the private respondents

have a title to the property in question, and that the
property described in private respondents TCT No.
296463 completely overlaps the title of petitioner
ALI. This fact is further substantiated by an
affidavit of Jose Rizal Mercado, a Geodetic Engineer
who,
after
attesting
to
his
qualifications,
competence and experience, declared under oath:
9. In connection with the
subject case, Affiant was requested to
find out, based on the technical
descriptions in their respective titles, if
the lots described in the title of
plaintiffs, TCT No. 296463, overlaps the
lots of ALI covered by TCT No. 41262
(formerly, TCT No. T-5333 of LPVI, and,
more previously, TCT No. T (125945)
6055-A, in the name of Ayala
Corporation), TCT No. 4366, TCT No.
4367 and TCT No. 4368, x x x.
9.1.
To
accomplish this task,
Affiant resorted to the
plotting
of
the
technical descriptions
found in the plaintiffs
and ALIs respective
titles. The
standard
operating procedure,
adopted by Affiant in
this
particular
instance, in plotting
properties is to study
the
technical
description
in
the
titles and at the same
time, to get all the
available survey plans
described in the titles
for reference.
9.2.
To
evidence this plotting
that
Affiant
conducted,
Affiant
prepared a Sketch
Plan
reflecting
Plaintiffs
title vis-a-

vis ALIs
title. Attached hereto
as Annex G is an
original copy of the
Sketch Plan prepared
by the Affiant.
9.3.
The
orange-shaded
portion on the Sketch
Plan indicates the
area covered by the
title of the plaintiffs
and it is clearly shown
in
this
plan
that plaintiffs
claimed
property
entirely
overlaps
ALIs
property
delineated in TCT
No.
T41262. Plaintiffs
claimed
property
(Lot 3, PSU-56007)
is in fact identical
to ALIs lot (Lot 3,
PSU-80886).

xxxx
In contrast, the private respondents never
controverted the petitioners allegation that their (private
respondents) title, TCT No. 296463 traces its origin to
OCT No. 8575, issued on August 12, 1970, while that of
the petitioner has its origin in OCT No. 242, issued on May
9,
1950. Moreover,
the
private
respondents
attached no supporting document to its Opposition
to the Motion for Summary Judgment.
Thus, as matters stand, the requisites for the
grant of summary judgment appear to have been
satisfied xxx.
xxxx

9.4.
The
blue,
pink
and
green lines on the
Sketch
Plan
indicate
the
boundaries of ALIs
TCT
Nos.
4366,
4367
and
4368,
respectively, and it
is clearly shown
that these do not
overlap
with
plaintiffs claimed
property.

Since the existence of two titles over the

same property, as well as the fact of overlapping of
the technical descriptions of the two titles are
admitted in the pleadings, and substantiated by
the supporting documents attached by the
defendant-movant (petitioner herein) to its Motion
for Summary Judgment, there is no genuine issue
as to any material fact. If at all, the sole issue is a
legal one, to wit: whose title (as to the conflicting
ones) is superior and must be upheld. This issue
may be decided on the basis of the affidavits and
supporting documents submitted by the parties, as
well as the applicable law and jurisprudence on the
matter. In other words, there need not be a protracted
trial thereon, since all that the trial court should do is to
apply the law to the issue, taking into consideration the
documents attached by the parties in their respective
pleadings and/or submitted together with the motion or
the opposition thereto. The same is true with the
other defenses raised by the petitioner in its
responsive
pleading,
to
wit: res
judicata,
prescription and laches which may likewise be
resolved without going to trial. [24] (Emphasis and
underscoring supplied.)

The Sketch Plan attached thereto clearly

indicates the overlapping and identical boundaries
between the private respondents TCT No. 296463
and petitioners TCT No. 125945, (formerly TCT No.
T-5333).[23] In addition to the affidavit of the Geodetic
Engineer, the petitioner likewise attached to its Motion for
Summary Judgment copies of the following titles:

The foregoing CA decision became final and executory after the

separate petitions for review filed with this Court by the parties were
denied with finality. The parties, and even the trial court, were bound by
the CAs factual finding therein that the only lots whose technical
descriptions overlap are those covered by the Carpos TCT No. 296463 and
ALIs TCT No. T-5333 which later became TCT No. T-41262. There was

simply no basis for the trial court to invalidate all the ALI titles mentioned in
the complaint.
The incorrectness of this sweeping invalidation of ALI titles in the
Summary Judgment is even more evident in the case of TCT No. T-4367 (Lot
2, plan Psu-47035) and TCT No. T-4368 (Lot 3, plan Psu-47035). Petitioners
claims with respect to these properties are already barred by res judicata.
In Realty Sales Enterprise, Inc. v. Intermediate Appellate Court, [25]petitioner
Morris Carpo already asserted his purported ownership of these two
properties based on a transfer certificate of title with the same survey plan
number (Psu-56007) as TCT No. 296463. However, inRealty, his claim was
discredited by the Court when it held that Realty Sales Enterprise, Inc.
(Realty), ALIs predecessor in interest,[26] is the one with valid title to these
properties. The relevant portions of the Realty Decision are quoted here:
Two (2) adjacent parcels of land located in
Almanza, Las Pias, Metro Manila, having an aggregate
area of 373,868 sq. m., situated in the vicinity of the
Ayala Alabang Project and BF Homes Paraaque are
covered by three (3) distinct sets of Torrens titles to wit:
1)
TCT No. 20408 issued on May 29, 1975 in
the name of Realty Sales Enterprise,
Inc., which was derived from OCT No.
1609, issued on May 21, 1958, pursuant
to Decree No. N-63394 in LRC Cases
Nos. 657, 758 and 976, GLRO Record
Nos. N-29882, N-33721 and N-43516,
respectively.
2)
TCT No. 303961 issued on October 13,
1970 in the name of Morris G. Carpo,
which was derived from OCT No. 8629,
issued on October 13, 1970 pursuant to
decree No. N-131349 in LRC Case No.
N-11-M (N-6217), GLRO Record No. N32166.
3)
TCTs Nos. 333982 and 333985, issued on
July 27, 1971 in the name of Quezon
City
Development
and
Financing
Corporation, derived from OCT No. 8931
which was issued on July 27, 1971
pursuant to LRC Case No. P-206 GLRO
Record No. N-31777.
On December 29, 1977, Morris Carpo filed a
complaint with the Court of First Instance of Rizal, Branch
XXIII, presided over by Judge Rizalina Bonifacio Vera
(hereafter referred to as Vera Court), for "declaration of
nullity of Decree No. N-63394 and TCT No. 20408."
Named defendants were Realty Sales Enterprise, Inc.,
Macondray Farms, Inc. and the Commissioner of Land
Registration. x x x.

xxxx
In the case at bar, it appears that it was
Estanislao Mayuga, father of Dominador Mayuga,
predecessor-in-interest of Realty, who originally filed on
June 24, 1927 a registration proceeding docketed as LRC
Case No. 657, GLRO Record No. N-29882 in the Court of
First Instance of Rizal to confirm his title over parcels of
land described as Lots 1, 2 and 3, Plan Psu-47035.
(Lots 2 and 3 are the subject of the instant
litigation among Carpo, Realty and QCDFC.) Case
No. 657 was jointly tried with two other cases, LRC Case
No. 976, GLRO Record No. 43516 filed by Eduardo Guico
and LRC Case No. 758, GLRO Record No. 33721 filed by
Florentino Baltazar, as the three cases involved identical
parcels of land, and identical applicants/oppositors.
xxxx
Carpo bought the disputed property from the
Baltazars, the original registered owners, by virtue of a
deed executed before Iluminada Figueroa, Notary Public
of Manila dated October 9, 1970. x x x.
xxxx
The Baltazars, predecessors-in-interest of Carpo
are heirs of Florentino Baltazar, an oppositor in the
original application filed by Estanislao Mayuga in 1927. As
stated earlier, the CFI-Rizal confirmed the title of
Estanislao to Lots 1, 2 and 3 of Plan Psu47035 "desestimando oposicion de Florentino Baltazar . .
. con respeto a dichos lotes . . ." As such successors of
Florentino, they could not pretend ignorance of the
land registration proceedings over the disputed
parcels of land earlier initiated by Eduardo Guico,
Florentino Baltazar and Estanislao Mayuga, as
when as the decisions rendered therein.
Moreover, it is not disputed that the title in
the name of Dominador Mayuga, from whom Realty
derived its title, was issued in 1958, or twelve
years before the issuance of the title in the name
of the Baltazars in 1970.
In this jurisdiction, it is settled that "(t)he
general rule is that in the case of two certificates
of title, purporting to include the same land, the
earlier in date prevails x x x. In successive
registrations, where more than one certificate is issued in
respect of a particular estate or interest in land, the
person claiming under the prior certificate is entitled to
the estate or interest; and that person is deemed to
hold under the prior certificate who is the holder
of, or whose claim is derived directly or indirectly
from the person who was the holder of

the earliest certificate issued in respect thereof x x

x.[27] (Emphasis and underscoring ours; citations
omitted.)
We now discuss each assignment of error raised in the petition.
First Assignment of Error
Petitioners alleged that the CA erred in declaring that the title of
respondent is valid even without the requisite survey plan approved by the
Director of the Bureau of Lands.
Petitioners clearly misunderstood or deliberately misread the CAs
ruling on this point. It is the CAs view that the trial courts pronouncement
that OCT No. 242 was issued without an approved survey plan was
unwarranted in view of the presumption of regularity that said title enjoys.
We cannot but agree with the CA on this point upon perusing the
following portion of the Summary Judgment:
Upon the other hand, this Court is not inclined to
concur with Ayalas claim of the validity of its TCT No. T5333 and alleged OCT No. 242 absent of any admission to
that effect by the plaintiffs in their complaint. A reading
of the defendants answer reveals that OCT No. 242
covers the property surveyed under SWO, but the
pleadings on file fail to allege that the same was
approved by the Director of the Bureau of Lands, thereby
justifying this court to be skeptical of the validity of the
issuance of OCT No. 242. In original land registration
cases, it is mandatory that the application should be
accompanied by a survey plan of the property applied for
registration, duly approved by the Director of the Bureau
of Lands. A survey plan without the approval of the
Director of the Bureau of Lands has the character of being
of dubious origin and it is not therefore worthy of being
accepted as evidence. The property being claimed by the
defendant ALI, allegedly registered under OCT No. 242, is
shown to have been surveyed under SWO and not
bearing the approval of the Director of the Bureau of
Lands. Any title issued emanating from a survey plan
without the approval of the Director of the Bureau of
Lands is tainted with irregularity and therefore void, as
ruled in Republic Cement Corporation vs. Court of
Appeals, et al., 198 SCRA 734. In the said case, the
Supreme Court held: That unless a survey plan is duly
approved by the Director of Lands the same is of dubious
value and is not acceptable as evidence. Indubitably,

therefore, the reported survey and its alleged results are

not entitled to credit and should be rejected.
The submission of the plan is a statutory
requirement of mandatory character and unless the plan
and its technical description are duly approved by the
Director of Lands, the same are not of much value
(Republic vs. Vera, 120 SCRA 210). In another case, it
was ruled that the Land Registration Commission has no
authority to approve original survey plans (Director of
Lands, et al. vs. Honorable Salvador Reyes, et al., 68
SCRA 177).
Evidently, the SWO survey of the property which
defendant ALI claimed to have been originated from OCT
No. 242 had not been approved by the Director of the
Bureau of Lands, but was apparently prepared and
approved by the then Land Registration Commissioner
and under the law, the same is void.[28]
To begin with, a perusal of the defendants answer or amended
answer would show that, contrary to the trial courts allusions thereto,
there is no admission on the part of ALI that OCT No. 242 was issued
without a survey plan that was duly approved by the Director of the Bureau
of Lands. There is likewise no evidence on record to support the trial courts
finding that the survey plan submitted to support the issuance of OCT No.
242 in the 1950 land registration proceedings was approved only by the
Land Registration Commissioner and not by the Director of the Bureau of
Lands.
It would appear the trial court came to the conclusion that OCT No.
242 was issued without a duly approved survey plan simply because the
notation SWO appeared in the technical description of the said title which
was attached to the answer and due to ALIs failure to allege in its
pleadings that the survey plan submitted in support of the issuance of OCT
No. 242 was approved by the Director of the Bureau of Lands.[29]
It is incomprehensible how the trial court could conclude that the
survey plan mentioned in OCT No. 242 was unapproved by the appropriate
authority all from the notation SWO which appeared beside the survey
plan number on the face of the title or from a failure to allege on the part of
ALI that a duly approved survey plan exists. We quote with approval the
discussion of the CA on this point:
Pursuant to the foregoing, the court a quo erred
when, in ruling that the validity of OCT No. 242 is
dubious, it gave emphasis to defendant-appellants
failure to allege that the survey plan of OCT No. 242 was
duly approved by the Director of the Bureau of Lands. It

is admitted that a survey plan is one of the requirements

for the issuance of decrees of registration, but upon the
issuance of such decree, it can most certainly be
assumed that said requirement was complied with by
ALIs original predecessor-in-interest at the time the
latter sought original registration of the subject
property. Moreover, the land registration court must be
assumed to have carefully ascertained the propriety of
issuing a decree in favor of ALIs predecessor-in-interest,
under the presumption of regularity in the performance of
official functions by public officers. The court upon which
the law has conferred jurisdiction, is deemed to have all
the necessary powers to exercise such jurisdiction, and to
have exercised it effectively. This is as it should be,
because once a decree of registration is made under the
Torrens system, and the time has passed within which
that decree may be questioned the title is perfect and
cannot later on be questioned. There would be no
end to litigation if every litigant could, by repeated
actions, compel a court to review a decree previously
issued by another court forty-five (45) years ago. The
very purpose of the Torrens system would be destroyed if
the same land may be subsequently brought under a
second action for registration, as what the court a quo did
when it faulted ALIs failure to allege that its predecessorin-interest submitted a survey plan approved by the
Director of the Bureau of Lands in the original land
registration case.

It cannot be gainsaid that the issuance of OCT No. 242 was a

result of the registration decree of the Court of First Instance of Rizal,
pursuant to land registration proceedings in Case No. 976. In the absence
of proof to the contrary, OCT No. 242 and its derivatives, including ALIs TCT
No. T-41262, enjoy the presumption of regularity and ALI need not allege or
prove that its title was regularly issued. That is precisely the nature of such
a presumption, it dispenses with proof. Rule 131, Section 3 of the Rules of
Court provides:

The Court need not emphasize that it is not for

ALI to allege in its pleadings, much less prove, that its
predecessor-in-interest complied with the requirements
for the original registration of the subject property. A
party dealing with a registered land need not go
beyond the Certificate of Title to determine the
true owner thereof so as to guard or protect his or
her interest. Hence, ALI was not required to go beyond
what appeared in the transfer certificate of title in the
name of its immediate transferor. It may rely solely,
as it did, on the correctness of the certificate of title
issued for the subject property and the law will in no
way oblige it to go behind the certificate of title to
determine the condition of the property. This is the
fundamental nature of the Torrens System of land
registration, to give the public the right to rely upon the
face of a Torrens certificate of title and to dispense with
the need of inquiring further.[30] (Underscoring ours;
citations omitted.)

In the absence of evidence to the contrary,

the Ordinary Decree Book, LRC (CLR) Rec. No. 6763,
showing that Decree No. 4244 was issued on March 3,
1911, is presumed to have been regularly issued by
the accountable public officers who enjoy the legal
presumption of regularity in the performance of
their functions. Thus, the proceedings that led to
the issuance of Decree No. 4244 in favor of the
Municipality of Cabuyao cannot
be
overturned
without any countervailing proof to the contrary. In
the words of Tichangco v. Enriquez:[32]

Section 3. Disputable presumptions. The

following presumptions are satisfactory if uncontradicted,
but may be contradicted and overcome by other
evidence:
xxxx
(m) That official duty has been regularly
performed;
(n) That a court, or judge acting as such,
whether in the Philippines or elsewhere, was acting in the
lawful exercise of jurisdiction;
(o) That all the matters within an issue raised in
a case were laid before the court and passed upon by it;
and in like manner that all matters within an issue raised
in a dispute submitted for arbitration were laid before the
arbitrators and passed upon by them; x x x.
Thus, we held in Herce, Jr. v. Municipality of Cabuyao, Laguna[31]:

To
overturn
this
legal
presumption carelessly more than 90
years since the termination of the case
will not only endanger judicial
stability, but also violate the underlying
principle of the Torrens system. Indeed,
to do so would reduce the vaunted legal
indefeasibility of Torrens titles to

meaningless
supplied.)

verbiage.

(Emphasis

The presumption of regularity enjoyed by the registration decree

issued in Case No. 976 and OCT No. 242 includes the presumption that all
the requisites for the issuance of a valid title had been complied with. ALI
need not allege or prove that a duly approved survey plan accompanied the
issuance of OCT No. 242 in 1950 because it is presumed. It is the party who
seeks to overcome the presumption who would have the burden to present
adequate and convincing evidence to the contrary. This, petitioners did not
even attempt to do.
We cannot accept petitioners proposition that they did not have
the burden of proof of showing the irregularity of ALIs title since the burden
of proof purportedly did not shift to them since no full-blown trial was
conducted by the RTC.
This specious argument deserves scant credit. Rule 131, Section 1
of the Rules of Court provides:
Section 1. Burden of proof. Burden of proof is
the duty of a party to present evidence on the facts in
issue necessary to establish his claim or defense by the
amount of evidence required by law.
With the filing of the complaint, petitioners should already have
alleged all the bases of their cause of action, particularly their allegation
that ALIs title is null and void and that such title should be cancelled.
However, a scrutiny of the complaint would show that petitioners never
alleged the purported lack of an approved survey plan as a defect of ALIs
title. All that the complaint alleged is that ALIs titles should be declared
void for not being derivatives of the Carpos title. Implicit in that allegation
is that petitioners were relying solely on the supposed priority of their own
title over ALIs. It stands to reason then that ALI did not have to allege in its
Answer that its mother title, OCT No. 242, was supported by a duly
approved survey plan when petitioners did not raise the same as an issue
in their complaint or in any other pleading filed with the trial court.
Indubitably, in view of the CAs Decision in CA-G.R. SP No. 44243,
this controversy has been reduced to the sole substantive issue of which
between the two titles, purporting to cover the same property, deserves
priority. This is hardly a novel issue. As petitioners themselves are aware,
in Realty, it was held that:
In this jurisdiction, it is settled that "(t)he
general rule is that in the case of two certificates
of title, purporting to include the same land, the
earlier in date prevails x x x. In successive

registrations, where more than one certificate is issued in

respect of a particular estate or interest in land, the
person claiming under the prior certificate is
entitled to the estate or interest; and that person
is deemed to hold under the prior certificate who is
the holder of, or whose claim is derived directly or
indirectly from the person who was the holder of
the earliest certificate issued in respect thereof x x
x."[33] (Emphasis supplied.)
In Degollacion v. Register of Deeds of Cavite,[34] we held that
[w]here two certificates of title purport to include the same land, whether
wholly or partly, the better approach is to trace the original certificates
from which the certificates of title were derived.
In all, we find that the CA committed no reversible error when it
applied the principle Primus Tempore, Portior Jure (First in Time, Stronger
in Right) in this case and found that ALIs title was the valid title having
been derived from the earlier OCT.
Second Assignment of Error
Petitioners contend that it is error on the part of the CA to rule that
their cause of action has been barred by prescription and laches. According
to them, since the OCT from which ALI derived its title is void for want of a
duly approved survey plan, their cause of action did not prescribe.
However, as discussed above, the conclusion of the trial court that OCT No.
242 is void was not sufficiently borne out by the evidence on record. Verily,
the premise upon which petitioners build their theory of imprescriptibility of
their action did not exist.
In sum, we find no reason to disturb the CAs finding that:
As previously emphasized, OCT No. 242 of ALIs
predecessor-in-interest was issued on May 7, 1950, or
forty-five (45) years before plaintiffs-appellees filed their
complaint on March 10, 1995. As such, it is the Courts
firmly held view that plaintiffs-appellees claim is barred
not only by prescription, but also by laches.
Aside from the fact that OCT No. 242 had
become incontrovertible after the lapse of one (1) year
from the time a decree of registration was issued, any
action for reconveyance that plaintiffs-appellees could
have availed of is also barred. Although plaintiffsappellees complaint was for quieting of title, it is in
essence an action for reconveyance based on an implied
or constructive trust, considering that plaintiffs-appellees
were alleging in said complaint that there was a serious

mistake, if not fraud, in the issuance of OCT No. 242 in

favor of ALIs predecessor-in-interest. It is now wellsettled that an action for reconveyance, which is a legal
remedy granted to a landowner whose property has been
wrongfully or erroneously registered in anothers name,
must be filed within ten years from the issuance of the
title, since such issuance operates as a constructive
notice. Since ALIs title is traced to an OCT issued in
1950, the ten-year prescriptive period expired in 1960.
By laches is meant the negligence or omission to
assert a right within a reasonable time, warranting a
presumption that the party entitled to assert it either has
abandoned it or declined to assert it. It does not involve
mere lapse or passage of time, but is principally an
impediment to the assertion or enforcement of a right,
which has become under the circumstances inequitable
or unfair to permit. In the instant case, plaintiffsappellees, as well as their predecessor-in-interest, have
not shown that they have taken judicial steps to nullify
OCT No. 242, from which ALIs title was derived, for fortyfive (45) years. To allow them to do so now, and if
successful, would be clearly unjust and inequitable to
those who relied on the validity of said OCT, the innocent
purchasers for value, who are protected by the precise
provisions of P.D. 1529, thus:
SECTION
32. Review
of
decree
of
registration;
Innocent
purchaser for value The decree of
registration shall not be reopened or
revised xxx subject, however, to the
right of any person xxx to file in the
proper Court of First Instance a petition
for reopening and review of the decree
of registration not later than one year
from and after the date of entry of such
decree of registration, but in no case
shall such petition be entertained by
the court where an innocent purchaser
for value has acquired the land or an
interest therein, whose rights may be
prejudiced. Whenever
the
phrase
innocent purchaser for value or an
equivalent phrase occurs in this Decree,
it shall be deemed to include and
innocent lessee, mortgagee or other
encumbrances for value.[35]

Third Assignment of Error

The next assigned error involves the question of whether the trial
court, in rendering the Summary Judgment, indeed relied heavily on the
alleged admission made by ALI on the validity of Carpos title, as declared
by the CA. Specifically, the CA stated as follows:
In its assailed decision, the court a quo relied
heavily on the alleged admission by ALI in it[s] Answer of
the existence and validity of plaintiffs-appellees title. We
have read the pertinent pleading and We find ALIs
statement to be of no moment.
Nowhere in ALIs statement was there an
admission of the validity of plaintiffs-appellees title. x x
x.
The Court cannot comprehend where and how
the court a quo could have gotten the impression that ALI
was admitting not only the existence, but also the validity
of plaintiffs-appellees certificate of title. x x x.[36]
An examination of the Summary Judgment of the trial court would
readily show that indeed the trial court relied on ALIs supposed admission
of the existence of Carpos title in ruling which of the conflicting titles was
valid. Pertinently, the trial court merely declared:
The existence of plaintiffs TCT No. 296463 has
been admitted by defendant Ayala in its answer to have
been originated from OCT No. 8575 which was issued on
August 12, 1970. It is very significant that defendant ALI
admitted it in its answer that OCT No. 8575 and plaintiffs
TCT No. 296463 both originated from Decree No. 131141
issued on October 15, 1969 in the name of Apolonio
Sabater as Annex G to defendant ALIs answer. This
admission made by the defendant in its answer is
conclusive upon it. It cannot therefore take
position contrary to or inconsistent with its answer,
and the facts are to be taken as true (Westminister
High School vs. Sto. Domingo, et al., G.R. No. 12666 RJuly 5, 1955; McDaniel vs. Apacible, 44 Phil. 248-255).
Upon the other hand, this Court is not inclined to
concur with Ayalas claim of the validity of its TCT No. T5333 and alleged OCT No. 242 absent of any admission to
that effect by the plaintiffs in their complaint. x x x. [37]

Although the Summary Judgment did not expressly state that ALI
admitted the validity of Carpos title with its admission of the said titles
existence, that is the unmistakable import of the trial courts statements
that ALIs admission of the existence of Carpos title are conclusive upon
it and bars ALI from taking a position contrary to or inconsistent with its
answer followed by the statement that the trial court is not inclined to
concur with Ayalas claim of validity of its TCT No. T-5333 and alleged OCT
No. 242, absent of (sic) any admission to that effect by the plaintiffs. This
is yet another non sequitur argument on the part of the trial court which
the CA correctly pointed out in its own Decision.
Fourth Assignment of Error
As to the issue of res judicata, the Court of Appeals ruled that the
decision in the case of Guico v. San Pedro[38] was binding on the Carpos as it
proceeded to discuss, thus:
In Guico vs. San Pedro, the Supreme Court
resolved the conflicting claims over a tract of land
situated in barrio Tindig na Manga, Paraaque, Rizal,
which was subdivided into eleven (11) lots. The subject
land was sought to be registered by a certain Eduardo C.
Guico on the basis of an accompanying plan Psu-80886,
which interestingly is also the basis of ALIs TCT No. T5333, now TCT No. 41262. Guicos application was
opposed by, among others, Florentino Baltazar, on the
basis of plan Psu 56007, under which plaintiffs-appellees
title was derived.
It appears that Lots 2 and 3 were adjudicated to
Guico on the basis of Psu-80886 (Lot 3 is the subject
matter of the instant case), Lot 10 in favor of Baltazar on
the basis of Psu 56007, under which plaintiffs-appellees
title was based, and the rest to the heirs of Narciso
Mayuga. While Baltazar claimed Lot 3 on the basis of his
Psu-56007, his claim was rejected and the Lot was
adjudicated to Guico on the basis of his Psu-80886.
It is clear, therefore, that whatever claim
plaintiffs-appellees have on the subject property on the
basis of Lot 3 Psu-56007, through their predecessor-ininterest, Florentino Baltazar, the same had been clearly
and finally denied by the Supreme Court in Guico vs. San
Pedro.
For res judicata to apply, four requisites must be
met: (1) the former judgment or order must be final; (2) it
must be a judgment or an order on the merits; (3) it must
have been rendered by a court having jurisdiction over

the subject matter and the parties; and (4) there must be,
between the first and the second actions, identity of
parties,
of
subject
matter
and
of
cause
of
action. Plaintiffs-appellees only have objections with
respect to the fourth requisite, offering the lame excuse
that it is not bound by such decision, there being no
identity of parties in Guico vs. San Pedro and the instant
case.[39]
We agree with petitioners that it is not apparent from an
examination of Guico and the evidence on record that indeed the
predecessors-in-interest of ALI and the Carpos with respect to the subject
property are Eduardo Guico and Florentino Baltazar, especially since the
parties respective OCTs were not issued in these persons names but
rather a certain Alberto Yaptinchay and Apolonio Sabater. It cannot be
categorically said that there was identity of parties between the Guico case
and the instant case. Clearly, one of the elements of res judicata, i.e., that
there must be, between the first and the second actions, identity of parties,
is lacking. In any event, the CAs questioned Decision had sufficient basis
in fact and law even without relying on the Guico case.
In conclusion, we find that the Court of Appeals committed no
reversible error in setting aside the patently erroneous Summary Judgment
of the trial court.
WHEREFORE,
the
petition
is DENIED. The
Court
of
Appeals Decision dated December 22, 2003 and the Resolution dated
December 16, 2004 are hereby AFFIRMED.
SO ORDERED.
83. Guaranteed Homes Inc. vs. Valdez
GUARANTEED HOMES, INC.,
Petitioner,
- versus HEIRS OF MARIA P. VALDEZ,
(EMILIA V. YUMUL and VICTORIA
V. MOLINO), HEIRS OF SEVERINA
P. TUGADE (ILUMINADA and
LEONORA P. TUGADE, HEIRS OF
ETANG P. GATMIN (LUDIVINA
G. DELA CRUZ (by and through
ALFONSO G. DELA CRUZ), HILARIA
G. COBERO and ALFREDO G. COBERO)

G.R. No. 171531

Present:
QUISUMBING, J.,
Chairperson,
CORONA,*
CARPIO MORALES,
TINGA, and
BRION, JJ.
Promulgated:

and SIONY G. TEPOL (by and through

ELENA T. RIVAS and ELESIO TEPOL,
JR.), AS HEIRS OF DECEDENT PABLO
January 30, 2009
PASCUA,
Respondents.
x ------------------------------------------------------------------------------------------------- x
This is a petition for review[1] under Rule 45 of the Rules of Court of
the Court of Appeals Decision dated 22 March 2005[2] and Resolution
dated 9 February 2006[3] in CA-G.R. CV No. 67462. The Court of Appeals
reversed the 12 November 1999 Order of the Regional Trial Court (RTC)
of Olongapo City, Branch 73[4] which granted the motion to dismiss filed by
Guaranteed Homes, Inc. (petitioner). The appellate court denied
petitioners motion for reconsideration.
The factual antecedents are as follows:
Respondents, who are the descendants of Pablo Pascua (Pablo), filed a
complaint seeking reconveyance of a parcel of land with an area of 23.7229
hectares situated in Cabitaugan, Subic, Zambales and covered by Original
Certificate of Title (OCT) No. 404 in the name of Pablo. [5] In the alternative,
the respondents prayed that damages be awarded in their favor.[6]
OCT No. 404[7] was attached as one of the annexes of respondents
complaint. It contained several annotations in the memorandum of
encumbrances which showed that the property had already been sold by
Pablo during his lifetime to Alejandria Marquinez and Restituto Morales.
Respondents also attached copies of the following documents as integral
parts of their complaint: Transfer Certificate of Title (TCT) No. T-8241, [8] TCT
No. T-8242,[9] TCT No. T-10863,[10] the Extrajudicial Settlement of a Sole Heir
and Confirmation of Sales[11] executed by Cipriano Pascua, Sr. (Cipriano),
and the Deed of Sale with Mortgage [12] between spouses Albino Rodolfo and
Fabia Rodolfo (spouses Rodolfo) and petitioner.
In their complaint,[13] respondents alleged that Pablo died intestate
sometime in June 1945 and was survived by his four children, one of whom
was the deceased Cipriano. [14] On 13 February 1967, Cipriano executed a
document denominated as Extrajudicial Settlement of a Sole Heir and
Confirmation of Sales,[15] wherein he declared himself as the only heir of
Pablo and confirmed the sales made by the decedent during his lifetime,
including the alleged sale of the disputed property to spouses Rodolfo.
Respondents likewise averred that on the following day 14 February 1967,
TCT No. T-8241[16] was issued in the name of Cipriano without OCT No. 404
having been cancelled.[17]However, TCT No. T-8241 was not signed by the
Register of Deeds. On the same day, TCT No. T-8242 was issued in the
name of the spouses Rodolfo and TCT No. T-8241 was thereby cancelled.
[18]
Subsequently, on 31 October 1969, the spouses Rodolfo sold the
disputed property to petitioner by virtue of a Deed of Sale with Mortgage.

Consequently, on 5 November 1969, TCT No. T-8242 was cancelled and TCT
No. T-10863[19] was issued in the name of petitioner.[20]
It was further averred in the complaint that Jorge Pascua, Sr., son of
Cipriano, filed on 24 January 1997 a petition before the RTC of Olongapo
City, Branch 75, for the issuance of a new owners duplicate of OCT No.
404, docketed as Other Case No. 04-0-97. [21] The RTC denied the petition.
[22]
The trial court held that petitioner was already the owner of the land,
noting that the failure to annotate the subsequent transfer of the property
to it at the back of OCT No. 404 did not affect its title to the property.
Petitioner filed a motion to dismiss [23] the complaint on the grounds that the
action is barred by the Statute of Limitations, more than 28 years having
elapsed from the issuance of TCT No. T-10863 up to the filing of the
complaint, and that the complaint states no cause of action as it is an
innocent purchaser for value, it having relied on the clean title of the
spouses Rodolfo.
Impleaded as defendants, the heirs of Cipriano filed an answer to the
complaint in which they denied knowledge of the existence of the
extrajudicial settlement allegedly executed by Cipriano and averred that
the latter, during his lifetime, did not execute any document transferring
ownership of the property.[24]
The Register of Deeds and the National Treasurer filed, through the Office of
the Solicitor General, an answer averring that the six (6)-year period fixed
in Section 102 of Presidential Decree (P.D.) No. 1529 for the filing of an
action against the Assurance Fund had long prescribed since the transfer of
ownership over the property was registered through the issuance of TCT No.
T-10863 in favor of petitioner as early as 1969. They also claimed that
respondents have no cause of action against the Assurance Fund since they
were not actually deprived of ownership over the property, as they could
have recovered the property had it not been for their inaction for over 28
years.[25]
The RTC granted petitioners motion to dismiss. [26] Noting that
respondents had never claimed nor established that they have been in
possession of the property and that they did not present any evidence to
show that petitioner has not been in possession of the property either, the
RTC applied the doctrine that an action to quiet title prescribes where the
plaintiff is not in possession of the property.
The trial court found that the complaint per its allegations presented a case
of implied or constructive trust on the part of Cipriano who had inaccurately
claimed to be the sole heir of Pablo in the deed of extrajudicial settlement
of estate which led to the issuance of TCT No. T- 8241 in his favor. As the
prescriptive period for reconveyance of a fraudulently registered real
property is ten (10) years reckoned from the date of the issuance of the
title, the trial court held that the action for reconveyance had already
prescribed with the lapse of more than 28 years from the issuance of TCT

No. T-10863 on 5 November 1969 as of the filing of the complaint on 21

November 1997.
The RTC added that it is an enshrined rule that even a registered
owner of property may be barred from recovering possession of property by
virtue of laches.
The RTC further held that petitioner had the right to rely on TCT No.
T- 8242 in the name of spouses Rodolfo. Petitioner is not obliged to go
beyond the title considering that there were no circumstances surrounding
the sale sufficient to put it into inquiry.
Concerning the Assurance Fund, the RTC held that the claim against
it had long prescribed since Section 102 of P.D. No. 1529 provides for a sixyear period within which a plaintiff may file an action against the fund and
in this case the period should be counted from the time of the issuance of
the challenged TCT No. T-10863 on 5 November 1969 and thus expired in
1975.
Undaunted, respondents appealed to the Court of Appeals.[27]
The Court of Appeals reversed the RTCs order. [28] In ordering the
reinstatement of the complaint, the appellate court ruled that the
averments in respondents complaint before the RTC make out a case for
quieting of title which has not prescribed. Respondents did not have to
prove possession over the property since petitioner as the movant in a
motion to dismiss hypothetically admitted the truth of the allegations in the
complaint. The appellate court found that possession over the property was
sufficiently alleged in the complaint which stated that neither petitioner
nor the Rodolfo spouses ever had possession of the disputed property as
a number of the Pascua heirs either had been (still are) in actual,
continuous and adverse possession thereof or had been enjoying (still are
enjoying) the use thereof.[29] By the same token, laches had not set in, the
Court of Appeals added.
The appellate court further held that the ruling of the RTC that
petitioner is an innocent purchaser for value is contrary to the allegations in
respondents complaint.
Hence, the present petition for review.
The sole issue before this Court revolves around the propriety of the
RTCs granting of the motion to dismiss and conversely the tenability of the
Court of Appeals reversal of the RTCs ruling.
The petition is meritorious.
It is well-settled that to sustain a dismissal on the ground that the
complaint states no cause of action, the insufficiency of the cause of action

must appear on the face of the complaint, and the test of the sufficiency of
the facts alleged in the complaint to constitute a cause of action is whether
or not, admitting the facts alleged, the court could render a valid judgment
upon
the
same
in
accordance
with
the
prayer of the complaint. For the purpose, the motion to dismiss must
hypothetically admit the truth of the facts alleged in the complaint. [30] The
admission, however, is limited only to all material and relevant facts which
are well pleaded in the complaint.[31]
The factual allegations in respondents complaint should be
considered in tandem with the statements and inscriptions on the
documents attached to it as annexes or integral parts. In a number of
cases, the Court held that in addition to the complaint, other pleadings
submitted by the parties should be considered in deciding whether or not
the complaint should be dismissed for lack of cause of action. [32] Likewise,
other facts not alleged in the complaint may be considered where the
motion to dismiss was heard with the submission of evidence, or if
documentary evidence admitted by stipulation discloses facts sufficient to
defeat the claim.[33] For while the court must accept as true all well pleaded
facts in the complaint, the motion does not admit allegations of which the
court will take judicial notice are not true, nor does the rule apply to legally
impossible facts, nor to facts inadmissible in evidence, nor to facts which
appear by record or document included in the pleadings to be unfounded.
[34]

In the case at bar, the trial court conducted a hearing on the motion
to dismiss. At the hearing, the parties presented documentary evidence.
Among the documents marked and offered in evidence are the annexes of
the complaint.[35]
Based on the standards set by this Court in relation to the factual
allegations and documentary annexes of the complaint as well as the
exhibits offered at the hearing of the motion to dismiss, the inescapable
conclusion is that respondents complaint does not state a cause of action
against petitioner.
Firstly, the complaint does not allege any defect with TCT No. T-8242 in the
name of the spouses Rodolfo, who were petitioners predecessors-ininterest, or any circumstance from which it could reasonably be inferred
that petitioner had any actual knowledge of facts that would impel it to
make further inquiry into the title of the spouses Rodolfo. [36] It is basic that a
person dealing with registered property need not go beyond, but only has
to rely on, the title of his predecessor-in-interest. Since "the act of
registration is the operative act to convey or affect the land insofar as
third persons are concerned, it follows that where there is nothing in the
certificate of title to indicate any cloud or vice in the ownership of the
property, or any encumbrance thereon, the purchaser is not required to
explore farther than what the Torrens title upon its face indicates in quest
for any hidden defect or inchoate right that may subsequently defeat his
right thereto. If the rule were otherwise, the efficacy and conclusiveness of

the certificate of title which the Torrens system seeks to insure would
entirely be futile and nugatory. The public shall then be denied of its
foremost motivation for respecting and observing the Torrens system of
registration. In the end, the business community stands to be
inconvenienced and prejudiced immeasurably.[37]
Contrary to the assertion of respondents, OCT No. 404 was expressly
cancelled by TCT No. T-8241. The alleged non-signature by the Register of
Deeds Soliman Achacoso, , does not affect the validity of TCT No. T-8241
since he signed TCT No. T- 8242 and issued both titles on the same day.
There is a presumption of regularity in the performance of official duty. The
presumption is further bolstered by the fact that TCT No. T-8241 was
certified to be on file with the Registry of Deeds and registered in the name
of Cipriano. It is enough that petitioner had examined the latest certificate
of title which in this case was issued in the name of the immediate
transferor, the spouses Rodolfo. The purchaser is not bound by the original
certificate but only by the certificate of title of the person from whom he
had purchased the property.[38]
Secondly, while the Extrajudicial Settlement of a Sole Heir and Confirmation
of Sales executed by Cipriano alone despite the existence of the other heirs
of Pablo, is not binding on such other heirs, nevertheless, it has operative
effect under Section 44 of the Property Registration Decree, which provides
that:
SEC. 44. Statutory Liens Affecting Title. 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 said certificate and any of the following
encumbrances which may be subsisting, namely:
x x x x
Even assuming arguendo that the extrajudicial settlement was a forgery,
the Court still has to uphold the title of petitioner. The case law is that
although generally a forged or fraudulent deed is a nullity and conveys no
title, there are instances when such a fraudulent document may become
the root of a valid title.[39] And one such instance is where the certificate of
title was already transferred from the name of the true owner to the forger,
and while it remained that way, the land was subsequently sold to an
innocent purchaser. For then, the vendee had the right to rely upon what
appeared in the certificate.[40]
The Court cannot give credence to respondents claims that the
Extrajudicial Settlement of a Sole Heir and Confirmation of Sales was not
registered and that OCT No. 404 was not cancelled by the Register of
Deeds. The Register of Deeds of Zambales certified that the extrajudicial
settlement was recorded on 14 February 1967, per Entry No. 18590. This is
in compliance with Section 56 of Act No. 496, [41] the applicable law at the
time of registration, which provides that:

Sec. 56. Each register of deeds shall keep an entry book in which he shall
enter in the order of their reception all deeds and other voluntary
instruments, and all copies of writs and other process filed with him relating
to registered land. He shall note in such book the year, month, day, hour,
and minute of reception of all instruments, in the order in which they are
received. They shall be regarded as registered from the time so
noted, and the memorandum of each instrument when made on the
certificate of title to which it refers shall bear the same date. [Emphasis
supplied]
Registration in the public registry is notice to the whole world. Every
conveyance, mortgage, lease, lien, attachment, order, judgment,
instrument or entry affecting registered land shall be, if registered, filed or
entered in the Office of the Register of Deeds of the province or city where
the land to which it relates lies, be constructive notice to all persons from
the time of such registering, filing or entering. [42]
Thirdly, respondents cannot make out a case for quieting of title since OCT
No. 404 had already been cancelled. Respondents have no title to anchor
their complaint on.[43] Title to real property refers to that upon which
ownership is based. It is the evidence of the right of the owner or the
extent of his interest, by which means he can maintain control and, as a
rule, assert right to exclusive possession and enjoyment of the property. [44]
Moreover, there is nothing in the complaint which specified that the
respondents were in possession of the property. They merely alleged that
the occupants or possessors are others not defendant Spouses
Rodolfo[45] who could be anybody, and that the property is in actual
possession of a number of the Pascua heirs [46] who could either be the
respondents or the heirs of Cipriano. The admission of the truth of material
and relevant facts well pleaded does not extend to render a demurrer an
admission of inferences or conclusions drawn therefrom, even if alleged in
the pleading; nor mere inferences or conclusions from
facts not stated; nor conclusions of law; nor matters of evidence; nor
surplusage and irrelevant matters.[47]
The other heirs of Pablo should have filed an action for reconveyance based
on implied or constructive trust within ten (10) years from the date of
registration of the deed or the date of the issuance of the certificate of title
over the property. [48] The legal relationship between Cipriano and the other
heirs of Pablo is governed by Article 1456 of the Civil Code which provides
that if a property is acquired through mistake or fraud, the person obtaining
it is, by force of law, considered a trustee of an implied trust for the benefit
of the person from whom the property comes.
From the above discussion, there is no question that petitioner is an
innocent purchaser for value; hence, no cause of action for cancellation of
title will lie against it.[49] The RTC was correct in granting petitioners motion
to dismiss.

Lastly, respondents claim against the Assurance Fund also cannot prosper.
Section 101 of P.D. No. 1529 clearly provides that the Assurance Fund shall
not be liable for any loss, damage or deprivation of any right or interest in
land which may have been caused by a breach of trust, whether express,
implied or constructive. Even assuming arguendo that they are entitled to
claim against the Assurance Fund, the respondents claim has already
prescribed since any action for compensation against the Assurance Fund
must be brought within a period of six (6) years from the time the right to
bring such action first occurred, which in this case was in 1967.
WHEREFORE, the petition is GRANTED. The decision of the Court of
Appeals in CA-G.R. CV No. 67462 is REVERSED and SET ASIDE. The 12
November 1999 Order of the RegionalTrial Court of Olongapo City, Branch
73 in Civil Case No. 432-097 is REINSTATED. SO ORDERED.
123. Pascua vs. Republic
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
LOURDES A. PASCUA,
Petitioner,

G.R. No. 162097

Present:

- versus -

QUISUMBING, J., Chairperson,

CARPIO,
CARPIO MORALES,
TINGA, and
VELASCO, JR., JJ.

REPUBLIC OF THE
Promulgated:
PHILIPPINES,
Respondent.
February 13, 2008
x-----------------------------------------------------------------------------------------x
DECISION
VELASCO, JR., J.:
The instant petition for review under Rule 45 seeks the reversal of the July
22, 2003 Decision[1] and February 10, 2004 Resolution[2] of the Court of
Appeals (CA) in CA-G.R. CV No. 74050, affirming the trial courts denial of
petitioners action for reconstitution of title covering Lot No. 3209 of the
Pagsanjan, Laguna Cadastre in her name.
The Facts

Petitioner claimed that she is the owner in fee simple of Lot No. 3209,
Pagsanjan, Laguna Cadastre, having inherited it from her parents, Guillermo
Abinsay and Leoncia Rivera. She and her predecessors-in-interest had
allegedly been in open, public, continuous, and peaceful possession of the
disputed lot since it was bought from Serafin Limuaco in 1956.
On December 4, 1930, the cadastral court awarded the lot to Limuaco, who
sold the lot to petitioners parents on December 24, 1956, as evidenced by
a Deed of Absolute Sale.[3]
Due to the ravages of World War II, however, the owners duplicate
certificate of the Torrens title covering Lot No. 3209, its original copy on file
with the Laguna Register of Deeds (RD), and other pertinent papers were
lost and/or destroyed, and diligent efforts to find them were futile. Thus,
on December 8, 1999, petitioner filed a petition for judicial reconstitution of
the original certificate of title (OCT) covering Lot No. 3209 with the Sta.
Cruz, Laguna, Regional Trial Court (RTC), Branch 27. She alleged that there
were no deeds or instruments covering the disputed lot that were
presented or pending registration with the RD, and that no co-owners,
mortgagees, or lessees duplicate of the OCT was issued by the RD.
After complying with the jurisdictional requirements, petitioner was allowed
to present evidence ex-parte. She testified that her parents bought a piece
of land from Limuaco and that after her parents death, her siblings
partitioned the land and Lot No. 3209 was allocated to her. She learned
from the Land Registration Authority (LRA) that Decree No. 412846 was
issued in the cadastral case in 1930, but the records, including those in
the Laguna RD, were destroyed during the war. She said the lot was
declared for tax purposes in her name and she had been paying taxes due
on the lot, as evidenced by the Tax Clearance dated March 2, 2000. She
stated that the adjoining lot owners were Olivar Pening on the north,
Hernan Zaide on the east; and that there is a stream on the south and
west. Petitioner submitted in evidence the tracing cloth plan and technical
description of Lot No. 3209.
The RTC denied the petition for reconstitution for insufficiency of
evidence in its October 30, 2000 Order, ruling as follows:
The certification issued by Acting Chief Alberto H. Lingayo of the Ordinary
and Cadastral Decree Division (Exh. F) and another certification of the
Chief of the Docket Division of the Land Registration Authority (Exh. G)
speak of Decree No. 412846 issued on December 4, 1930 covering Lot No.
3209. On the other hand, Tax Declaration No. 5471 in the name of spouses
Guillermo Abinsay and Leoncia Rivera (Exh. I) did not indicate any
certificate of title number, cadastral lot number or even an assessors lot
number while Tax Declaration No. 1376 (Exh. J) only indicated Assessors
Lot No. 19-pt. Petitioner failed to establish that Assessors Lot No. 19-pt
and Lot No. 3209 are one and the same.

Assuming that Assessors Lot No. 19-pt refers to Lot No. 3209, still, the
petition could not be granted because there is no showing that an original
certificate of title was actually issued pursuant to Decree No. 412846. The
certifications issued by the Land Registration Authority dated October 26,
1999 and September 23, 1998 and the Report of the same office dated May
5, 2000 are bereft of any allusion to the issuance of a title. The documents
presented in evidence by petitioner not only failed to prove the issuance of
an original certificate of title but also the name of the adjudicatee. [4]
On appeal to the CA, petitioner argued that Assessors Lot No. 19-pt and Lot
No. 3209 are the same; that she is the adjudicatee of the disputed lot; and
that an OCT was issued in accordance with Decree No. 412846. For
respondent Republic of the Philippines, the Solicitor General contended that
what petitioners predecessors-in-interest bought from Limuaco was
Assesors Lot No. 19-pt, which was neither designated nor mentioned as Lot
No. 3209. Also, the Solicitor General said the property described in the
documents presented is still unregistered land of the public domain and
there is no evidence that an OCT was actually issued to Lot No. 3209. The
Solicitor General added that the trial court did not acquire jurisdiction over
the petition since petitioner failed to submit proof of notices to all adjoining
lot owners.
The July 22, 2003 Decision of the CA affirmed the trial courts order in
toto. The CA held that petitioner failed to present the documents
enumerated in Section 2, Republic Act No. (RA) 26 entitled An Act Providing
a Special Procedure for the Reconstitution of Torrens Certificate of Title Lost
or Destroyed, as amended by RA 6732, or any other document that could
be a sufficient basis for reconstituting title.
Petitioners motion for reconsideration was denied by the CA in its February
10, 2004 Resolution.
The Issues
Thus, petitioner elevated the matter to us, interposing that:
I
The CA erred in holding that petitioner failed to present any of the
documents enumerated in Sec. 2 of RA 26.
II
The CA erred in holding that the certification of the LRA that Decree No.
412846 was issued over Lot 3209 cannot qualify as a proper document for
reconstituting the lost or destroyed titled because Lot 3209 is different from
Lot 19-pt.
III

The CA erred in holding that the lot sold by Serafin Limuaco to the Sps.
Abinsay and Rivera is not Lot 3209 but Lot 19-pt which are different from
each other.
IV
The CA erred in holding that statements in the Deed of Sale and Deed of
Co-owners Partition that the land is not registered under Act 496 are fatal
to the instant Petition.[5]
The Courts Ruling
The petition lacks merit.
Sec. 2 of RA 26 provides:
SEC. 2. Original certificates of title shall be reconstituted from such of the
sources hereunder enumerated as may be available in the following order:
(a)

The owners duplicate of the certificate of title;

(b)
The co-owners, mortgagees, or lessees duplicate of the
certificate of title;
(c)
A certified copy of the certificate of title, previously issued by
the register of deeds or by a legal custodian thereof;
(d)
An authenticated copy of the decree of registration or patent,
as the case may be pursuant to which the original certificate of title was
issued;
(e)
A document, on file in the Registry of Deeds by which the
property, the description of which is given in said document, is mortgaged,
leased or encumbered, or an authenticated copy of said document showing
that its original has been registered; and
(f)
Any other document which, in the judgment of the court, is
sufficient and proper basis for reconstituting the lost or destroyed
certificate of title.
Petitioner asserts that under Sec. 2(f) of RA 26, other documents may be
considered by the court as sufficient bases for the reconstitution of a lost or
destroyed certificate of title. The pertinent documents she presented
before the trial court are as follows:
(1)
List of lot descriptions from the Bureau of Lands
which show that Limuaco is a claimant of Lot No. 3209 covered by Survey

No. Cad. 69, Case No. 5 Pagsanjan, Laguna, which is 10,673 sq. m. in area
(Exhibit O);
(2)
Certification of the LRA dated October 26, 1999,
stating that based on the Record of Book of Decrees kept at the Vault
Section, Docket Division of said office, the copy of Decree No. 412846
issued on December 4, 1930 covering Lot No. 3209 of the Cadastral Survey
of Pagsanjan, Laguna under Cadastral Case No. 14, LRC Cadastral Record
No. 211 was not among the salvaged decrees on file with said office and
that the said copy is presumed lost or destroyed during World War II
(Exhibit F);
(3)
Certification from the LRA dated September 23, 1998 that its
Record of Book of Cadastral Lots shows that Lot No. 3209 of Pagsanjan
Cadastre was issued Decree No. 412846 (Exhibit G);
(4)
Deed of Absolute Sale dated December 24, 1956, showing that
Limuaco sold to petitioners parents a parcel of land in Anibong, Pagsanjan,
Laguna which consists of 10,673 sq. m. covered by Tax Declaration No. 156
(Exhibit E);
(5)
Tax Declaration No. 5471 in the name of petitioners parents
which canceled Tax Declaration No. 156 covering a property bounded by
the lot of Timoteo Abaya on the north, a stream on the south and west,
a callejon in the east (Exhibit J); and
(6)
Deed of Co-owners Partition dated February 5, 1968 which
shows that petitioner and her siblings divided their inheritance after the
death of their parents, and that petitioner obtained Lot No. 19-pt covered
by Tax Declaration No. 1376 situated in Anibong, Pagsanjan, Laguna
consisting of 10,673 sq. m., bounded by Lot No. 15 pt. of Marcelo Aquino on
the north, a stream on the south and west, and a callejon in the east
(Exhibit D).[6]
As held in Republic v. Intermediate Appellate Court,[7] when RA
26, Section 2(f) speaks of any other document, the reference is to similar
documents previously enumerated in the section or documents ejusdem
generis as the documents earlier referred to.
The Deed of Co-owners Partition states that the subject of the instrument is
Lot No. 19-pt. The Deed of Absolute Sale between Limuaco and petitioners
parents, on the other hand, states that the land was not registered under
Act No. 496. Petitioner nevertheless insists that Lot No. 3209 is the subject
of a decree of registration according to the records of the LRA, and that
between Limuacos statement and the certification from the LRA, the latter
must prevail.
We are not convinced. RA 26 presupposes that the property whose title is
sought to be reconstituted has already been brought under the provisions
of the Torrens System, Act No. 496.[8] Petitioners evidence itself, the Deed

of Sale between Limuaco and her parents, stated that the lot was not
registered under Act No. 496 and that the parties agreed to register it
under Act No. 3344. Even the Deed of Co-owners Partition stated that the
subject lot, Lot No. 19-pt, is not registered. The other piece of evidence,
the certifications from the LRA, merely stated that Decree No. 412846
covering Lot No. 3209 was issued on December 4, 1930, but the copy of
said decree is not among the salvaged decrees on file with said office. The
said copy is presumed lost or destroyed during World War II. The LRA
neither stated that a certificate of title was actually issued nor mentioned
the number of the OCT. It cannot be determined from any of the evidence
submitted by petitioner that the adjudicatee of the purported decree was
Limuaco.
In Republic v. El Gobierno de las Islas Filipinas, this Court denied the
petition for reconstitution of title despite the existence of a decree:
We also find insufficient the index of decree showing that Decree No.
365835 was issued for Lot No. 1499, as a basis for reconstitution. We
noticed that the name of the applicant as well as the date of the issuance
of such decree was illegible. While Decree No. 365835 existed in the
Record Book of Cadastral Lots in the Land Registration Authority as stated
in the Report submitted by it, however, the same report did not state the
number of the original certificate of title, which is not sufficient evidence in
support of the petition for reconstitution. The deed of extrajudicial
declaration of heirs with sale executed by Aguinaldo and Restituto Tumulak
Perez and respondent on February 12, 1979 did not also mention the
number of the original certificate of title but only Tax Declaration No.
00393. As we held in Tahanan Development Corp. vs. Court of Appeals, the
absence of any document, private or official, mentioning the number of the
certificate of title and the date when the certificate of title was issued, does
not warrant the granting of such petition.[9]
Petitioner argues that since it is incumbent upon the Commissioner of Land
Registration to issue a certificate of title pursuant to a court decree, it can
be presumed that a certificate of title over Lot No. 3209 was indeed issued
when the cadastral court ordered it so on December 4, 1930. Petitioner
relied on Rule 131, Sec. 3 of the Rules of Court which states the
presumption that official duty has been regularly performed. This
presumption, however, is merely disputable. In this case, the LRA certified
that (1) a decree covering Lot No. 3209 was issued, but (2) a copy of the
said decree cannot be found on the records. If in fact a certificate of title
was issued, a title number could have been mentioned by the LRA. Since
the LRA itself made no reference to any certificate of title, the conclusion is
that none was issued. More importantly, Limuaco himself stated in the
Deed of Absolute Sale that the property he was selling was not
registered. Petitioners evidence, no less, disproves the presumption she
relies upon.
What further militates against petitioners arguments is the fact that the
Deed of Absolute Sale, Deed of Co-owners Partition, and Tax Declaration

Nos. 5471 and 99-19-003-00022 mention Lot No. 19-pt and not Lot No.
3209, which was sold by Limuaco to her parents. Lot No. 3209 only
appears on the Tracing Cloth Plan and the Technical Description. There is
no document that refers or designates Lot No. 19-pt as Lot No. 3209.
Petitioner points out, however, that both Lot No. 19-pt and Lot No. 3209
have the area of 10,673 sq. m., bounded by a callejon and a stream, and
located in Anibong, Pagsanjan, Laguna. Moreover, the Lot Description
(Exhibit O) and Lot Data (Exhibit P) show that the technical description
of Lot No. 19-pt fits the technical description of Lot No. 3209. She also
asserts that Lot No. 19-pt, which was mentioned in Tax Declaration No. 9919-003-00022 issued in her name, was the Assessors Lot Number and not
the Cadastral Lot Number.[10] The Solicitor General points out, however,
that Tax Declaration No. 5471 in the name of petitioners parents did not
indicate any certificate of title number or cadastral or assessors lot
number. This creates serious doubt as to the exact identity of the two lots.
Assuming that Lot Nos. 19-pt and 3209 are the same, we are still
constrained to deny the reconstitution of title mainly because there is no
proof that a certificate of title was originally issued to both lots. The
Solicitor General notes that both lots are still unregistered land of the public
domain; thus, no certificate covering such property can be issued under the
instant proceeding.

In sum, we are not persuaded that petitioners pieces of evidence warrant

the reconstitution of title since she failed to prove the existence of the title
in the first place. The purpose of reconstitution of title is to have the
original title reproduced in the same form it was when it was lost or
destroyed.[11] In this case, there is no title to be re-issued. The appellate
and trial courts were correct in denying Pascuas petition. We emphasize
that courts must be cautious in granting reconstitution of lost or destroyed
certificates of titles. It is the duty of the trial court to scrutinize and verify
carefully all supporting documents, deeds, and certifications. Each and
every fact, circumstance, or incident which corroborates or relates to the
existence and loss of the title should be examined.[12]
WHEREFORE, the CAs July 22, 2003 Decision and February 10, 2004
Resolution in CA-G.R. CV No. 74050, affirming the October 30, 2000 Order
of the Sta. Cruz, Laguna RTC, Branch 27, are AFFIRMED IN TOTO. Costs
against petitioner.
SO ORDERED.