Vous êtes sur la page 1sur 63

1

LTD cases

G.R. No. 156318


[1]

SPOUSES ANSELMO and


PRISCILLA BULAONG,
Petitioners,

- versus -

Present:
CARPIO, J., Chairperson,
BRION,
PEREZ,
MENDOZA,* and
SERENO, JJ.
Promulgated:
September 5, 2011

VERONICA GONZALES,
Respondent.
x--------------------------------------------------------------------------------------------------------x

DECISION
BRION, J.:
Petitioners Anselmo Bulaong and Priscilla Bulaong collectively referred to
as the Bulaongs seek, through their petition for review on certiorari, the reversal of
the decision[2] of the Court of Appeals (CA) dated July 31, 2002 in CA-G.R. SP No.
55423 and the subsequent resolution of November 27, 2002 [3] reiterating this
decision. These CA rulings reversed and set aside the decision [4] of the Regional
Trial Court (RTC) of Malolos, Bulacan, Branch 12, that ordered the cancellation of
Transfer Certificate of Title (TCT) No. T-62002 and TCT No. T-62003.
FACTUAL ANTECEDENTS
This case traces its roots to the conflicting claims of two sets of parties over two
parcels of land. The first parcel of land, with an area of 237 square meters and
covered by TCT No. T-249639,[5] was originally registered in the name of
Fortunato E. Limpo, married to Bertha Limpo.[6] The other parcel of land, with an
area of 86 square meters and covered by TCT No. T-249641, [7] was originally

2
LTD cases

registered in the names of Pacifica E. Limpo, married to Nicanor C. Sincionco, and


Fortunato E. Limpo, married to Bertha Limpo.[8]
These parcels of land were mortgaged by the daughter of Fortunato and
Bertha Limpo, Regina Christi Limpo, upon the authority of her father,[9] to the
Bulaongs, to secure a loan in the amount ofP4,300,000.00. The mortgage was
evidenced by a Deed of Mortgage dated January 13, 1993.[10]
The Bulaongs alleged that before they executed the mortgage, Regina gave them
the owners duplicates of title of the two properties. In early January
1993 (the exact date is unknown but prior to the execution of the mortgage),
Anselmo Bulaong, together with his counsel, Atty. Roberto Dionisio, allegedly
went to the Office of the Register of Deeds of Bulacan to check the titles of the
properties to be mortgaged.According to the Bulaongs, the Register of Deeds,
Atty. Elenita Corpus, assured them that TCT Nos. T-249639 and T-249641
were completely clear of any liens or encumbrances from any party. Relying
on this assurance, Anselmo Bulaong agreed to the execution of the mortgage over
the two properties.[11]

After the execution of the mortgage, the Bulaongs once again went to the Office of
the Register of Deeds of Bulacan to register and annotate the mortgage on the
titles. They learned then that the Register of Deeds copies of the two titles were
among the records that were burned in the fire that destroyed the entire office of
the Register of Deeds of Bulacan on March 7, 1987. Atty. Elenita Corpus
convinced them to cause the reconstitution of the originals of the titles, and further
assured them that the mortgage over the properties would be protected since a copy
of the Deed of Mortgage had already been given to her office for annotation.[12]
On February 4, 1993, the newly reconstituted titles were issued TCT No. RT29488 replaced TCT No. T-249639, and TCT No. RT-22489 replaced TCT No. T249641, still in the names of Fortunato Limpo, and of Pacifica Limpo and
Fortunato Limpo, respectively.
Thereafter, on February 24, 1993, new titles were again issued upon
the extrajudicial settlement of the estate of Reginas parents. Thus, TCT No. RT-

3
LTD cases

29488 was cancelled and TCT No. T-30395 was issued in its place,
with Regina replacing her parents as the registered owner; similarly, TCT No. RT22489 was cancelled and TCT No. T-30396 was issued in the names of Pacifica
Limpo and Regina Limpo, as her parents heir.[13]
To the Bulaongs astonishment, the new titles in Reginas name now
contained the following entries:
TCT No. T-30395
Entry No. 5306; Kind: Condition: The property herein described is
subject to the prov. of sec. 4, rule 74 of the rules of court. date of
instrument: 1-13-93; date of inscription: 2-24-93 at 10:42 a.m.
(SGD.) ELENITA E. CORPUS
Register of Deeds

Entry No. 5484; Kind: Mortgage: Exec. In favor of: Sps. Anselmo
Bulaong & Priscilla Bulaong; Condition: Covering the parcel of land
herein described, for the sum of P4,300,000.00 subject to all the
conditions stipulated in the deed of mortgage on file in this office. Doc.
No. 428, Page 86, Book XXX, S. of 1993, N.P. Roberto Dionisio of Mal.
Bul. Date of Instrument: 1-13-93; date of inscription 3-1-93 at 9:20 a.m.
(SGD.) ELENITA E. CORPUS
Register of Deeds
/5306
(NOTE: Proceed to Entry no. 5484)
Entry No. 7808: Kind: NOTICE OF LEVY ON EXECUTION:
Conditions: Notice is hereby given that by virtue of the Writ of
Execution, issued in Crim. Cases Nos. 9638 to 9646-M, entitled People
of the Philippines v. Reggie Christi Schaetchen Limpo and Maria
Lourdes (Bong) Diaz y Gamir, et al., Accused by the Regional Trial
Court, Third Jud. Region, Branch 12, Malolos, Bulacan, under date of
Dec. 29, 1992, and at the instance of the private complainant Veronica R.
Gonzales, thru counsel, levy on execution is hereby made upon all the
rights, shares, interests and participations of accused Reggie Christi

4
LTD cases

Schaetchen[14] over the real properties described in T-249641 and T249639, by virtue of Deeds of Absolute Sale executed by former
registered owners in favor of Reggie Christi Schaetchen dated
November 5, 1991, together with all the improvements existing thereon,
was levied on execution preparatory to the sale of the same without
prejudice to third persons having better right thereof and to any valid lien
and encumbrances. Date of instrument Jan. 4, 1993; Date of
inscription Jan. 4, 1993 at 11:50 a.m.
(SGD.) ELENITA E. CORPUS
Register of Deeds/negm[15] (emphasis ours)

TCT No. T-30396


Entry No. 5306; Kind: Condition: One-half (1/2) of the property herein
described is subject to the prov. of sec. 4, rule 74 of the rules of court.
date of instrument: 1-13-93; date of inscription: 2-24-93 at 10:42 a.m.
(SGD.) ELENITA E. CORPUS
Register of Deeds
Entry No. 5484; Kind: Mortgage: Exec. In favor of: Sps. Anselmo
Bulaong & Priscilla Bulaong; Condition: Covering the parcel of land
herein described, for the sum of P4,300,000.00 subject to all the
conditions stipulated in the deed of mortgage on file in this office. Doc.
No. 428, Page 86, Book XXX, S. of 1993, N.P. Roberto Dionisio of Mal.
Bul. Date of Instrument: 1-13-93; date of inscription 3-1-93 at 9:20 a.m.
(SGD.) ELENITA E. CORPUS
Register of Deeds
/5306
(NOTE: Proceed to Entry No. 5484)
Entry No. 7808: Kind: NOTICE OF LEVY ON EXECUTION:
Conditions: Notice is hereby given that by virtue of the Writ of
Execution, issued in Crim. Cases Nos. 9638 to 9646-M, entitled People
of the Philippines v. Reggie Christi Schaetchen Limpo and Maria
Lourdes (Bong) Diaz y Gamir, et al., Accused by the Regional Trial
Court, Third Jud. Region, Branch 12, Malolos, Bulacan, under date of
Dec. 29, 1992, and at the instance of the private complainant Veronica R.

5
LTD cases

Gonzales, thru counsel, levy on execution is hereby made upon all the
rights, shares, interests and participations of accused Reggie Christi
Schaetchen over the real properties described in T-249641 and T249639, by virtue of Deeds of Absolute Sale executed by former
registered owners in favor of Reggie Christi Schaetchen dated Nov.
5, 1991, together with all the improvements existing thereon, was levied
on execution preparatory to the sale of the same without prejudice to
third persons having better right thereof and to any valid lien and
encumbrances. Date of instrument Jan. 4, 1993; Date of inscription Jan.
4, 1993 at 11:50 a.m.
(SGD.) ELENITA E. CORPUS
Register of Deeds/negm[16] (emphasis ours)

It appears that a certain Veronica Gonzales had filed a criminal case for
estafa against Regina with the RTC of Bulacan, Branch 12.[17] On October 28,
1991, the RTC rendered a decision acquitting Regina, but at the same time ordering
her to pay Veronica actual damages in the total amount of P275,000.00.[18] By
virtue of a writ of execution issued on December 29, 1992, the above-quoted notice
of levy was recorded in the Primary Entry Book of the Registry of Bulacan
on January 4, 1993. However, this was not annotated on the titles themselves
because at the time of the levy, the properties had not yet been transferred
to Regina, but were still registered in the name of her parents.[19]
Based on the annotation referring to the notice of levy, the subject of the
levy was Reginas interest in the properties which, in turn, was anchored on a Deed
of Absolute Sale allegedly executed by her parents on November 5, 1991 to
transfer their interest in both properties to her. Notably, Regina never registered
this sale with the Register of Deeds.
To satisfy Reginas judgment debt, the two lots were sold at public auction
on June 8, 1993 to Veronica, the only bidder, for P640,354.14.[20] The Certificate of
Sale was annotated on the titles on June 8, 1993 as Entry No. 2075. Upon the lapse
of the one year redemption period on June 20, 1994, Veronicas titles over the
properties were consolidated. A final deed of sale was issued in Veronicas name
and annotated as Entry No. 40425 on TCT Nos. T-30395 and T-30396 on June 24,
1994.[21]

6
LTD cases

On the other hand, the Bulaongs also had the mortgage extrajudicially
foreclosed, with the sheriff conducting the auction sale on August 22, 1994. The
Bulaongs were the highest bidders, buying the properties for the sum
of P4,300,000.00. They also paid the corresponding capital gains tax
of P215,000.00, plus P64,500.00 for the documentary stamp tax, which were
required before the titles to the lots could be transferred in their names. The
Certificate of Sale in their favor was inscribed on August 23, 1994 on TCT No. T30395 and TCT No. T-30396 as Entry No. 46739.[22]
Veronica thereafter filed a petition for the surrender to the Register of Deeds
of the owners copies of TCT Nos. T-30395 and T-30396 with the RTC of Malolos,
docketed as LRC Case No. P-292. On December 16, 1994, the RTC granted the
petition and ordered Regina to surrender her owners copies of the titles; should
Regina fail to comply, the RTC ordered the Register of Deeds to cancel these titles
and issue new ones in Veronicas name. Complying with this order, the Register of
Deeds cancelled TCT Nos. T-30395 and T-30396, and issued TCT No. T-62002 in
Veronicas name, and TCT No. T-62003 in the name of Veronica and Pacifica
Limpo. These new titles were clean and did not contain any annotations, liens
or encumbrances.
The Bulaongs thus filed a petition for mandamus with the RTC of Bulacan
against Ramon Sampana, the incumbent Register of Deeds of Bulacan, and
Veronica, praying that the court order Sampana to cancel TCT Nos. T-62002 and T62003, and issue new titles in their names; and order the respondents therein to pay
them moral and exemplary damages, and attorneys fees.
On July 30, 1999, the RTC ruled in favor of the Bulaongs. According to the
RTC, allowing Veronica to levy on the properties worth at least P5,000,000.00 for
a judgment of P275,000.00 would result in gross unjust enrichment. The RTC thus
ordered the Register of Deeds of Bulacan to issue new titles in the name of the
Bulaongs, but only after the Bulaongs had reimbursed the amount of P275,000.00
to Veronica, with interest. The RTC also ordered Veronica to pay the
Bulaongs P50,000.00 as attorneys fees. The dispositive portion of the RTC
decision reads:

7
LTD cases

WHEREFORE, conformably with all the foregoing, judgment is


hereby rendered:
1. Annulling and cancelling Transfer Certificates of Title Nos. T-62002
in the name of defendant Veronica Gonzales, and T-62003 in the
name of defendant Veronica Gonzales and Pacifica E. Limpo married
to Nicanor C. Sincioco;
2. Ordering the Ex-Officio Sheriff of Bulacan to execute a final deed of
sale in favor of petitioner spouses Anselmo Bulaong and Pr[i]scilla
Bulaong on the basis of the registered Certificate of Sale executed by
said court officer on August 23, 1994, in favor of said spousesmortgagee, without the owner-mortgagors exercising the right of
redemption since then;
3. Ordering the Register of Deeds of Bulacan to issue new titles, in
place of Transfer Certificate of Title Nos. T-62002 and T-62003, this
time in the name of petitioner spouses Anselmo Bulaong and
Pr[is]cilla Bulaong, as soon as the aforesaid final deed of sale in their
favor is executed by the Ex-Officio Sheriff of Bulacan and only after
said spouses shall have paid and/or reimbursed Veronica Gonzales
lien as judgment creditor in the amount of P275,000.00, plus interests
at the legal rate computed from November 19, 1995, until fully paid
and satisfied;
4. Order[ing] herein defendants Veronica R. Gonzales and the Register
of Deeds of Bulacan upon notice of this judgment, not to effect any
transfer, encumbrance or any disposition whatsoever of the parcels of
land covered by Transfer Certificates of Title Nos. 62002 and T62003, or any part thereof, right or interest therein, either by sale or
any form of conveyance, lien or encumbrance; and
5. Ordering only defendant Veronica R. Gonzales to pay herein
petitioners P50,000.00 as just and equitable attorneys fees, and the
costs of suit, defendant Ramon C. Sampana as the Register of Deeds
of Bulacan having merely performed his ministerial duty of following
the court order of issuing titles to defendant Gonzales.
No pronouncement as to moral and exemplary damages alleged in
the petition but not even testified to by petitioners at the trial. [23]

8
LTD cases

Both parties appealed to the CA, with the case docketed as CA-G.R. SP No.
55423.
THE COURT OF APPEALS DECISION
In its July 31, 2002 decision, the CA upheld the validity of the Notice of Levy on
Execution, noting that it created a lien in favor of the judgment creditor over the
property. According to the CA, when the Bulaongs received the owners copies of
TCT Nos. T-30395 and T-30396, the Notice of Levy was already annotated on the
titles and, thus, should have put them on guard. As mortgagees of the lots, the
Bulaongs had the option to redeem the properties within the redemption period
provided by law. Since they failed to avail of this remedy, the consolidation of
titles in Veronicas name was proper.
THE PETITION
The Bulaongs filed the present petition, raising the following issues:
a) Whether Entry No. 7808 is valid;
b) Whether Veronica has a superior right over the properties; and
c) Assuming the notice of levy earlier annotated in favor of Veronica to
be valid, whether there was a valid foreclosure sale.
THE COURTS RULING
We GRANT the petition.
Procedural issues
Time and again, we have stated that petitions for review on certiorari shall
only raise questions of law, as questions of fact are not reviewable by this
Court. The main issue of who has a better right over the disputed properties is not
only a question of law but one that requires a thorough review of the presented
evidence, in view particularly of the Bulaongs allegation that fraud attended the
annotation of Entry No. 7808 in the titles. Thus, in the usual course, we would

9
LTD cases

have denied the present petition for violation of Section 1, Rule 45 of the Rules of
Court, which provides:
Section 1. Filing of petition with Supreme Court. A party desiring
to appeal by certiorari from a judgment or final order or resolution of
the Court of Appeals, the Sandiganbayan, the Regional Trial Court or
other courts whenever authorized by law, may file with the Supreme
Court a verified petition for review on certiorari. The petition shall
raise only questions of law which must be distinctly set
forth. (emphasis ours)

This rule, however, admits of several exceptions. Questions of fact may be


reviewed, among others, when the lower court makes inferences that are manifestly
mistaken, and when the judgment of the CA is based on a misapprehension of
facts.[24] As will be apparent in the discussions below, these exceptional
circumstances are present in the present case. A review of the evidence, therefore,
is not only allowed, but is necessary for the proper resolution of the presented
issues.
It has not escaped our attention that the Bulaongs appear to have erroneously
filed a petition for mandamus for what is essentially an action to assail the validity
of Veronicas certificates of title over the subject properties. This lapse, however, is
not legally significant under the well-settled rule that the cause of action in a
complaint is not the title or designation of the complaint, but the allegations in the
body of the complaint. The designation or caption is not controlling as it is not
even an indispensable part of the complaint; the allegations of the complaint
control.[25] We thus proceed to resolve the case, bearing in mind that the relief the
Bulaongs sought before the lower court was to nullify Veronicas certificates of title
and to order the Register of Deeds to issue new titles in their name.
Redemption not the proper remedy
The CA faulted the Bulaongs for not redeeming the properties from Veronica
when they had the option of doing so. For failing to exercise this right, the CA
concluded that the consolidation of the titles to the lots in Veronicas name thus
became a matter of course.

10
LTD cases

We disagree.
At the outset, we observe that this is not a simple case of determining which
lien came first. A perusal of the Bulaongs submissions to the Court shows that they
have consistently maintained that the levy and the corresponding execution sale in
Veronicas favor are null and void. Had the Bulaongs merely exercised the right of
redemption, they would have been barred from raising these issues in court,
pursuant to our ruling in Cometa v. Intermediate Appellate Court: [26]

The respondent appellate court's emphasis on the failure of the


petitioner to redeem the properties within the period required by law is
misplaced because redemption, in this case, is inconsistent with the
petitioner's claim of invalidity of levy and sale. Redemption is an
implied admission of the regularity of the sale and would estop the
petitioner from later impugning its validity on that ground.
[27]
(emphasis ours)

The Bulaongs were thus justified in their refusal to redeem the properties.
Annotation is valid
The Bulaongs assail the validity of Entry No. 7808 (relating to the Notice of
Levy on Execution in Veronicas favor) on the two titles, asserting that it is null and
void for being a fraudulent entry. In support of this contention, they note the
following suspicious circumstances: (a) although Entry No. 7808 has a higher
number and appears after Entry No. 5484 (corresponding to the Bulaongs
mortgage) on the titles, Entry No. 7808 appeared in an earlier volume of the Book
of Entries; and (b) although the Notice of Levy on Execution was purportedly
presented to the Registry of Bulacan on January 4, 1993, or prior to the date when
the Bulaongs deed of mortgage was presented on January 13, 1993, the Notice of
Levy on Execution, Entry No. 7808, was numbered and placed after the mortgage,
Entry No. 5484, on the titles.

11
LTD cases

We agree that these circumstances render the Notice of Levy on Execution,


annotated on the titles, highly suspicious. These circumstances, however, can be
sufficiently explained when the records are examined.
The records show that on January 4, 1993, Veronica went to the Registry of
Bulacan with the Notice of Levy on Execution, requesting that the notice be
registered. While the Register of Deeds placed the Notice of Levy on Execution in
the Primary Entry Book, she did not immediately make a registration when a
question arose regarding the registrability of the notice; the question necessitated
the submission of a consulta to the Land Registration Authority (LRA) on January
25, 1993.[28]
The LRA Administrator responded to the consulta only on February 10,
1993. Thus, the Notice of Levy on Execution was not immediately annotated on
the newly reconstituted titles, which were issued on February 4, 1993. It was only
when new titles were again issued to reflect the extrajudicial settlement of the
estate of Reginas parents on February 24, 1993 that the Notice of Levy on
Execution appeared on the titles as Entry No. 7808.
[29]

The apparent discrepancy in the numbering of the Notice of Levy on


Execution and the date of inscription on the certificates of title is suitably
explained by Section 56 of Presidential Decree No. 1529 whose pertinent portion
states:
Section 56. Primary Entry Book; fees; certified copies. Each
Register of Deeds shall keep a primary entry book in which, upon
payment of the entry fee, he shall enter, in the order of their reception,
all instruments including copies of writs and processes filed with
him relating to registered land. He shall, as a preliminary process in
registration, note in such book the date, hour and minute of reception
of all instruments, in the order in which they were 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: Provided, that the
national government as well as the provincial and city governments shall
be exempt from the payment of such fees in advance in order to be
entitled to entry and registration. [emphases ours]

12
LTD cases

In other words, the order of entries in the Primary Entry Book determines
the priority in registration. Thus, the Register of Deeds merely complied with the
law when she fixed Entry No. 7808s date of inscription as January 4, 1993, to
coincide with the date when the Notice of Levy on Execution was presented and
inscribed in the Primary Entry Book.

The late annotation of the levy on execution on the titles did not at all lessen
its effectivity. Jurisprudence has already established the rule that the entry of the
notice of levy on execution in the Primary Entry Book, even without the
corresponding annotation on the certificate of titles, is sufficient notice to all
persons that the land is already subject to the levy.[30] As we explained in Armed
Forces and Police Mutual Benefit Association, Inc. v. Santiago:[31]
The notice of levy on attachment in favor of petitioner may be
annotated on TCT No. PT-94912. Levin v. Bass (91 Phil. 420 [1952]; see
also Dr. Caviles, Jr. v. Bautista, 377 Phil. 25; 319 SCRA 24
[1999]; Garcia v. Court of Appeals, 184 Phil. 358; 95 SCRA 380
[19890]) provided the distinction between voluntary registration and
involuntary registration. In voluntary registration, such as a sale,
mortgage, lease and the like, if the owner's duplicate certificate be not
surrendered and presented or if no payment of registration fees be made
within fifteen (15) days, entry in the day book of the deed of sale does
not operate to convey and affect the land sold. In involuntary
registration, such as an attachment, levy upon execution, lis pendens and
the like, entry thereof in the day book is a sufficient notice to all
persons of such adverse claim.
The entry of the notice of levy on attachment in the primary entry
book or day book of the Registry of Deeds on September 14, 1994 is
sufficient notice to all persons, including the respondent, that the land is
already subject to an attachment. The earlier registration of the notice
of levy on attachment already binds the land insofar as third persons
are concerned.[32] (emphases ours)

13
LTD cases

Consequently, when the Register of Deeds placed the Notice of Levy on


Execution in the Primary Entry Book on January 4, 1993, this entry already bound
third persons to the notice entered.
Validity of the Levy
i. Reginas interest in the properties is not established
The levy on execution for judgment is the act x x x by which an officer sets
apart or appropriate[s,] for the purpose of satisfying the command of the writ, a
part or the whole of the judgment debtors property.[33] Every interest which the
judgment debtor may have in the property may be subjected to levy on execution.
[34]
As established by the Court in Reyes v. Grey:[35]
The term "property" as here applied to lands comprehends every
species of title, inchoate or complete; legal or equitable. This statute
authorizes the sale under execution of every kind of property, and every
interest in property which is, or may be, the subject of private ownership
and transfer. It deals with equitable rights and interests as it deals with
legal, without anywhere expressly recognizing or making any distinction
between them. [emphases ours]

In Reyes, the Court set the standard to be applied in determining the kind of
property that can be subject to attachment:
We think the real test, as to whether or not property can be attached and
sold upon execution is does the judgment debtor hold such
a beneficial interest in such property that he can sell or otherwise
dispose of it for value? If he does, then the property is subject to
execution and payment of his debts.[36] (emphasis and underscoring ours)

Applying the test in Reyes, the Court, in Gotauco & Co. v. Register of Deeds
of Tayabas,[37] recognized as valid the inscription of a notice of levy on execution
on the certificates of title, even though the titles were not in the name of the
judgment debtor (Rafael Vilar). According to the Court, while the certificates of
title were still registered in the name of Florentino Vilar, since Rafael Vilar

14
LTD cases

presented a copy of a petition filed with the lower court, from which it could be
inferred that Florentino Vilar was dead and Rafael Vilar was one of his heirs,
Rafael had an interest in Florentinos property that could properly be the subject of
attachment, even
if
his
participation
in
Florentinos
property
was indeterminable before the final liquidation of the estate.
Similarly, in Pacific Commercial Co. v. Geaga,[38] the Court held that although the
Register of Deeds may properly reject an attachment where it appears that the titles
involved are not registered in the name of the defendants (debtors), that rule yields
to a case where there is evidence submitted to indicate that the defendants have
present or future interests in the property covered by said titles, regardless of
whether they still stand in the names of other persons. The fact that the present
interests of the defendants are still indeterminate, and even though there was no
judicial declaration of heirship yet, is of no consequence for the purpose of
registering the attachment in question. This is the case since what is being
attached and what may be later sold at public auction in pursuance of the
attachment cannot be anything more than whatever rights, titles, interests and
participations which the defendants may or might have in the property so
attached. In other words, if they had actually nothing in the property, then nothing
is affected and the property will remain intact.[39] This rule is expressed in Section
35, Rule 39 of the old Rules of Civil Procedure, which provides:
Upon the execution and delivery of said deed [of conveyance and
possession], the purchaser, or redemptioner, or his assignee, shall be
substituted to and acquire all the right, title, interest and claim of the
judgment debtor to the property as of the time of the
levy[.] [emphases ours]

Although we recognize the validity of the annotation of the levy on the


execution in the present case, the question of whether the levy itself is valid
remains to be determined. To do this, Reginas interest in the subject properties at
the time of the levy has to be ascertained. To recall, Veronicas notice of levy on
execution is based on Reginas interest in the two properties, which she
acquired via the Deed of Absolute Sale purportedly executed by her parents in her

15
LTD cases

favor on November 5, 1991. But is this Deed of Absolute Sale a sufficient evidence
of Reginas interest in the subject properties?
After carefully reviewing the evidence on record, we rule in the negative.
To begin with, not only were the properties subject of the attachment not
registered in Reginas name, the Deed of Absolute Sale on which Regina based her
interest was not even annotated on these titles. While Regina purportedly
purchased her parents rights to the subject properties in 1991, she never asserted
her rights over these properties by presenting the Deed of Absolute Sale to the
Register of Deeds for registration and annotation on the titles. As a matter of fact, it
was Veronica, and not Regina, who presented the Deed of Absolute Sale to the
Register of Deeds.
More importantly, from the records, it is clear that the subject properties
were finally registered in Reginas name, not by virtue of the 1991 Deed of
Absolute Sale, but by virtue of succession, specifically by the Adjudication
that Regina filed with the Register of Deeds on February 24, 1993,[40] pursuant to
Section 1, Rule 74 of the Rules of Court. [41] The procedure by which the properties
were registered in Reginas name suggests that when Reginas parents died, the
subject lots still formed part of Reginas parents estate, and were not, as Veronica
claims, sold to Regina in 1991, thereby casting doubt to the validity of the Deed of
Absolute Sale. As the Bulaongs reason in their memorandum, if the subject
properties had already been sold to Regina as early as 1991, why would they still
be considered a part of her parents estate in 1993?[42]
Another point to consider is that Regina dealt with the Bulaongs as her
fathers representative when they were negotiating the mortgage over the properties.
[43]
If she had already acquired her parents interest in these properties in 1991, she
would not have needed any authority from her father to execute the mortgage with
the Bulaongs; she would have done so in her own capacity.
These facts, taken together, lead us to doubt that Regina had any interest in
the properties at the time of the levy. Thus, unlike in the previously cited cases
where the debtors, although possessing merely an inchoate interest in the
properties at the time of the levy, had interests that were established with

16
LTD cases

reasonable certainty and could be the subject of attachment; in the present case, the
evidence on record fails to prove that Regina actually had any interest in the
properties which could be the subject of levy.
The spring cannot rise higher than its source.[44] Since Regina had no
established interest in the subject properties at the time of the levy, Veronicas levy
had nothing to attach to in the subject properties.
ii. Unregistered sale of land cannot bind third parties
Even assuming that the Deed of Absolute Sale in Reginas favor was valid,
we still cannot uphold the validity of the levy and execution sale in Veronicas
favor.
The general rule in dealing with registered land is set forth in Section 51 of
P.D. No. 1529:
Section 51. Conveyance and other dealings by registered owner. An owner
of registered land may convey, mortgage, lease, charge or otherwise deal with the
same in accordance with existing laws. He may use such forms of deeds,
mortgages, leases or other voluntary instruments as are sufficient in law. But no
deed, mortgage, lease, or other voluntary instrument, except a will purporting to
convey or affect registered land shall take effect as a conveyance or bind the
land, but shall operate only as a contract between the parties and as evidence of
authority to the Register of Deeds to make registration.

The act of registration shall be the operative act to convey or


affect the land insofar as third persons are concerned, and in all cases
under this Decree, the registration shall be made in the office of the
Register of Deeds for the province or city where the land lies. [emphases
ours]

From the standpoint of third parties, a property registered under


the Torrens system remains, for all legal purposes, the property of the person in
whose name it is registered, notwithstanding the execution of any deed of
conveyance, unless the corresponding deed is registered.[45] Simply put, if a sale is
not registered, it is binding only between the seller and the buyer, but it does not
affect innocent third persons.

17
LTD cases

Undoubtedly, Veronicas claim on the properties is rooted in the unregistered


Deed of Absolute Sale between Regina and her parents. The Bulaongs do not
appear to have had any knowledge that this sale ever took place. To
recall, Regina gave the Bulaongs the owners duplicate certificates of the properties,
which showed that the properties were registered in the names of her parents,
Fortunato and Bertha Limpo. It thus appears that the Bulaongs first learned about
the sale between Regina and her parents when they received the newly issued titles
in Reginas name which contained the annotation of the levy in Veronicas favor.
One of the principal features of the Torrens system of registration is that all
encumbrances on the land shall be shown, or at least intimated upon the certificate
of title and a person dealing with the owner of the registered land is not bound to
go behind the certificate and inquire into transactions, the existence of which is not
there intimated.[46] Since the Bulaongs had no knowledge of the unregistered
sale between Regina and her parents, the Bulaongs can neither be bound by it,
nor can they be prejudiced by its consequences. This is but the logical corollary
to the rule set forth in Section 51 of P.D. No. 1529, in keeping with the basic legal
maxim that what cannot be done directly cannot be done indirectly.
Execution sale in Veronicas favor was highly irregular
We also find that the execution sale in favor of Veronica is invalid because Reginas
interest in both lots was sold together, in violation of Sections 15 and 21, Rule 39
of the old Rules of Court. The pertinent portions of these provisions provide:
Section 15. Execution of money judgments. The officer must enforce an
execution of a money judgment by levying on all the property, real and
personal of every name and nature whatsoever, and which may be
disposed of for value, of the judgment debtor not exempt from
execution, or on a sufficient amount of such property, if there be
sufficient, and selling the same, and paying to the judgment creditor, or
his attorney, so much of the proceeds as will satisfy the judgment. Any
excess in the proceeds over the judgment and accruing costs must be
delivered to the judgment debtor, unless otherwise directed by the
judgment or order of the court. When there is more property of the
judgment debtor than is sufficient to satisfy the judgment and accruing

18
LTD cases

costs, within the view of the officer, he must levy only on such part of
the property as is amply sufficient to satisfy the judgment and costs.
Section 21. How property sold on execution. Who may direct manner
and order of sale. All sales of property under execution must be made at
public auction, to the highest bidder, between the hours of nine in the
morning and five in the afternoon. After sufficient property has been
sold to satisfy the execution, no more shall be sold. When the sale is of
real property, consisting of several known lots, they must be
sold separately; or, when a portion of such real property is claimed by a
third person, he may require it to be sold separately. [emphases ours]

Where the property to be sold consists of distinct lots, tracts or parcels, or is


susceptible of division without injury, it should be offered for sale in parcels and
not en masse, for the reason that a sale in that manner will generally realize the
best price, and will not result in taking from the debtor any more property than is
necessary to satisfy the judgment. It will also enable the defendant to redeem any
one or more of the parcels without being compelled to redeem all the land sold.
[47]
A sale of additional land or personal property after enough has been sold to
satisfy the judgment is unauthorized.[48]
While the general policy of the law is to sustain execution sales, the sale
may be set aside where there is a resulting injury based on fraud, mistake and
irregularity.[49] Where the properties were sold together when the sale of less than
the whole would have been sufficient to satisfy the judgment debt, the sale may be
set aside.[50]
In Caja v. Nanquil, [51] we took judicial notice of the fact that the value of a
property was usually bigger than the amount for which it could be
mortgaged. Since the two properties, taken together, were mortgaged to the
petitioners to secure a loan worth P4,300,000.00, we can easily assume that these
properties are worth at least this amount. Even Veronica does not contest this
assumption.
From this premise, we can logically assume that the sale of just one of the
lots would have been sufficient to satisfy the judgment debt. Yet no explanation
was provided as to why the sheriff sold both parcels of land at the execution sale

19
LTD cases

for the paltry sum of P640,354.14. This act undoubtedly resulted in great prejudice
to the Bulaongs. To our minds, this renders the execution sale defective, and
provides sufficient ground for us to set the sale aside.
For the foregoing reasons, we rule and so hold that the levy and the
corresponding execution sale in Veronicas favor are invalid, and must be set
aside. Veronica, however, is not without recourse, as she may still seek to enforce
the judgment debt against Regina.
WHEREFORE,
premises
considered,
we GRANT the
petition
and REVERSE the decision of the Court of Appeals dated July 31, 2002 in CAG.R. SP No. 55423. We REINSTATE the decision of the Regional Trial Court,
Branch 12, Malolos, Bulacan, dated July 30, 1999 in Civil Case No. 170-M-95,
with the MODIFICATION that petitioners Anselmo Bulaong and Priscilla
Bulaong are no longer required to reimburse Veronica Gonzales for her lien in the
amount of P275,000.00, plus interest.
SO ORDERED.

SECOND DIVISION

20
LTD cases

REPUBLIC OF THE PHILIPPINES,


Petitioner,

G. R. No. 162322
Present:
CARPIO, J., Chairperson,
BRION,
PEREZ,
SERENO, and
REYES, JJ.

- versus -

BANTIGUE POINT DEVELOPMENT


CORPORATION,
Respondent.

Promulgated:
March 14, 2012

x - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
DECISION
SERENO, J.:
This Rule 45 Petition requires this Court to address the issue of the proper scope of
the delegated jurisdiction of municipal trial courts in land registration cases.
Petitioner Republic of the Philippines (Republic) assails the Decision of the Court
of Appeals (CA)[1] in CA-G.R. CV No. 70349, which affirmed the Decision of the
Municipal Trial Court (MTC) of San Juan, Batangas [2] in LRC Case No. N-98-20,
LRA Record No. 68329, granting respondent Bantigue Point Development
Corporations (Corporation) application for original registration of a parcel of land.
Since only questions of law have been raised, petitioner need not have filed a
Motion for Reconsideration of the assailed CA Decision before filing this Petition
for Review.

The Facts
On 17 July 1997, respondent Bantigue Point Development Corporation filed with
the Regional Trial Court (RTC) of Rosario, Batangas an application for original

21
LTD cases

registration of title over a parcel of land with an assessed value of 4,330, 1,920
and 8,670, or a total assessed value of 14,920 for the entire property, more
particularly described as Lot 8060 of Cad 453-D, San Juan Cadastre, with an area
of more or less 10,732 square meters, located at Barangay Barualte, San Juan,
Batangas. [3]
On 18 July 1997, the RTC issued an Order setting the case for initial hearing on 22
October 1997.[4] On 7 August 1997, it issued a second Order setting the initial
hearing on 4 November 1997.[5]
Petitioner Republic filed its Opposition to the application for registration on 8
January 1998 while the records were still with the RTC.[6]
On 31 March 1998, the RTC Clerk of Court transmitted motu proprio the records
of the case to the MTC of San Juan, because the assessed value of the property was
allegedly less than 100,000.[7]
Thereafter, the MTC entered an Order of General Default[8] and commenced with
the reception of evidence.[9] Among the documents presented by respondent in
support of its application are Tax Declarations, [10] a Deed of Absolute Sale in its
favor,[11] and a Certification from the Department of Environment and Natural
Resources (DENR) Community Environment and Natural Resources Office
(CENRO) of Batangas City that the lot in question is within the alienable and
disposable zone.[12] Thereafter, it awarded the land to respondent Corporation.[13]
Acting on an appeal filed by the Republic, [14] the CA ruled that since the former
had actively participated in the proceedings before the lower court, but failed to
raise the jurisdictional challenge therein, petitioner is thereby estopped from
questioning the jurisdiction of the lower court on appeal.[15] The CA further found
that respondent Corporation had sufficiently established the latters registrable title
over the subject property after having proven open, continuous, exclusive and
notorious possession and occupation of the subject land by itself and its
predecessors-in-interest even before the outbreak of World War II.[16]
Dissatisfied with the CAs ruling, petitioner Republic filed this instant Rule 45
Petition and raised the following arguments in support of its appeal:

22
LTD cases

I.
THE REPUBLIC CANNOT BE ESTOPPED FROM QUESTIONING
THE JURISDICTION OF THE MUNICIPAL TRIAL COURT OVER
THE APPLICATION FOR ORIGINAL REGISTRATION OF LAND
TITLE EVEN FOR THE FIRST TIME ON APPEAL
II.
THE MUNICIPAL TRIAL COURT FAILED TO ACQUIRE
JURISDICTION OVER THE APPLICATION FOR ORIGINAL
REGISTRATION OF LAND TITLE.[17]

The Courts Ruling


We uphold the jurisdiction of the MTC, but remand the case to the court a quo for
further proceedings in order to determine if the property in question forms part of
the alienable and disposable land of the public domain.
I
The Republic is not estopped from raising the issue of jurisdiction
in this case.
At the outset, we rule that petitioner Republic is not estopped from questioning the
jurisdiction of the lower court, even if the former raised the jurisdictional question
only on appeal. The rule is settled that lack of jurisdiction over the subject matter
may be raised at any stage of the proceedings.[18] Jurisdiction over the subject
matter is conferred only by the Constitution or the law.[19] It cannot be acquired
through a waiver or enlarged by the omission of the parties or conferred by the
acquiescence of the court.[20] Consequently, questions of jurisdiction may be
cognizable even if raised for the first time on appeal.[21]
The ruling of the Court of Appeals that a party may be estopped from raising such
[jurisdictional] question if he has actively taken part in the very proceeding which
he questions, belatedly objecting to the courts jurisdiction in the event that the

23
LTD cases

judgment or order subsequently rendered is adverse to him[22] is based on the


doctrine of estoppel by laches. We are aware of that doctrine first enunciated by
this Court in Tijam v. Sibonghanoy.[23] In Tijam, the party-litigant actively
participated in the proceedings before the lower court and filed pleadings therein.
Only 15 years thereafter, and after receiving an adverse Decision on the merits
from the appellate court, did the party-litigant question the lower courts
jurisdiction. Considering the unique facts in that case, we held that estoppel by
laches had already precluded the party-litigant from raising the question of lack of
jurisdiction on appeal. In Figueroa v. People,[24] we cautioned that Tijam must be
construed as an exception to the general rule and applied only in the most
exceptional cases whose factual milieu is similar to that in the latter case.
The facts are starkly different in this case, making the exceptional rule
in Tijam inapplicable. Here, petitioner Republic filed its Opposition to the
application for registration when the records were still with the RTC. [25] At that
point, petitioner could not have questioned the delegated jurisdiction of the MTC,
simply because the case was not yet with that court. When the records were
transferred to the MTC, petitioner neither filed pleadings nor requested affirmative
relief from that court. On appeal, petitioner immediately raised the jurisdictional
question in its Brief.[26] Clearly, the exceptional doctrine of estoppel by laches is
inapplicable to the instant appeal.
Laches has been defined as the failure or neglect, for an unreasonable and
unexplained length of time, to do that which, by exercising due diligence, could or
should have been done earlier; it is negligence or omission to assert a right within a
reasonable time, warranting the presumption that the party entitled to assert it
either has abandoned or declined to assert it. [27] In this case, petitioner Republic has
not displayed such unreasonable failure or neglect that would lead us to conclude
that it has abandoned or declined to assert its right to question the lower court's
jurisdiction.
II
The Municipal Trial Court properly acquired jurisdiction over
the case.

24
LTD cases

In assailing the jurisdiction of the lower courts, petitioner Republic raised two
points of contention: (a) the period for setting the date and hour of the initial
hearing; and (b) the value of the land to be registered.
First, petitioner argued that the lower court failed to acquire jurisdiction over
the application, because the RTC set the date and hour of the initial hearing beyond
the 90-day period provided under the Property Registration Decree.[28]
We disagree.
The Property Registration Decree provides:
Sec. 23. Notice of initial hearing, publication, etc. - The court shall,
within five days from filing of the application, issue an order setting the
date and hour of the initial hearing which shall not be earlier than fortyfive days nor later than ninety days from the date of the order. x x x.

In this case, the application for original registration was filed on 17 July 1997.
[29]
On 18 July 1997, or a day after the filing of the application, the RTC
immediately issued an Order setting the case for initial hearing on 22 October
1997, which was 96 days from the Order.[30] While the date set by the RTC was
beyond the 90-day period provided for in Section 23, this fact did not affect the
jurisdiction of the trial court. In Republic v. Manna Properties, Inc.,[31] petitioner
Republic therein contended that there was failure to comply with the jurisdictional
requirements for original registration, because there were 125 days between the
Order setting the date of the initial hearing and the initial hearing itself. We ruled
that the lapse of time between the issuance of the Order setting the date of initial
hearing and the date of the initial hearing itself was not fatal to the
application. Thus, we held:
x x x [A] party to an action has no control over the Administrator
or the Clerk of Court acting as a land court; he has no right to meddle
unduly with the business of such official in the performance of his
duties. A party cannot intervene in matters within the exclusive power of
the trial court. No fault is attributable to such party if the trial court errs
on matters within its sole power. It is unfair to punish an applicant for an
act or omission over which the applicant has neither responsibility nor

25
LTD cases

control, especially if the applicant has complied with all the


requirements of the law.[32]

Indeed, it would be the height of injustice to penalize


respondent Corporation by dismissing its application for registration on account of
events beyond its control.
Moreover, since the RTC issued a second Order on 7 August 1997 setting the initial
hearing on 4 November 1997,[33] within the 90-day period provided by law,
petitioner Republic argued that the jurisdictional defect was still not cured, as the
second Order was issued more than five days from the filing of the application,
again contrary to the prescribed period under the Property Registration Decree.[34]
Petitioner is incorrect.
The RTCs failure to issue the Order setting the date and hour of the initial hearing
within five days from the filing of the application for registration, as provided in
the Property Registration Decree, did not affect the courts its jurisdiction.
Observance of the five-day period was merely directory, and failure to issue the
Order within that period did not deprive the RTC of its jurisdiction over the case.
To rule that compliance with the five-day period is mandatory would make
jurisdiction over the subject matter dependent upon the trial court. Jurisdiction over
the subject matter is conferred only by the Constitution or the law.[35] It cannot be
contingent upon the action or inaction of the court.
This does not mean that courts may disregard the statutory periods with impunity.
We cannot assume that the law deliberately meant the provision to become
meaningless and to be treated as a dead letter.[36]However, the records of this case
do not show such blatant disregard for the law. In fact, the RTC immediately set
the case for initial hearing a day after the filing of the application for registration,
[37]
except that it had to issue a second Order because the initial hearing had been
set beyond the 90-day period provided by law.
Second, petitioner contended[38] that since the selling price of the property
based on the Deed of Sale annexed to respondents application for original

26
LTD cases

registration was 160,000,[39] the MTC did not have jurisdiction over the case.
Under Section 34 of the Judiciary Reorganization Act, as amended, [40] the MTCs
delegated jurisdiction to try cadastral and land registration cases is limited to lands,
the value of which should not exceed 100,000.
We are not persuaded.
The delegated jurisdiction of the MTC over cadastral and land registration cases is
indeed set forth in the Judiciary Reorganization Act, which provides:
Sec. 34. Delegated Jurisdiction in Cadastral and Land
Registration Cases. - Metropolitan Trial Courts, Municipal Trial Courts,
and Municipal Circuit Trial Courts may be assigned by the Supreme
Court to hear and determine cadastral or land registration cases covering
lots where there is no controversy or opposition, or contested lots where
the value of which does not exceed One hundred thousand pesos
(100,000.00), such value to be ascertained by the affidavit of the
claimant or by agreement of the respective claimants if there are more
than one, or from the corresponding tax declaration of the real property.
Their decision in these cases shall be appealable in the same manner as
decisions of the Regional Trial Courts. (As amended by R.A. No. 7691)
(Emphasis supplied.)

Thus, the MTC has delegated jurisdiction in cadastral and land registration cases in
two instances: first, where there is no controversy or opposition; or, second, over
contested lots, the value of which does not exceed 100,000.
The case at bar does not fall under the first instance, because petitioner opposed
respondent Corporations application for registration on 8 January 1998.[41]
However, the MTC had jurisdiction under the second instance, because the value
of the lot in this case does not exceed 100,000.
Contrary to petitioners contention, the value of the land should not be determined
with reference to its selling price. Rather, Section 34 of the Judiciary
Reorganization Act provides that the value of the property sought to be registered
may be ascertained in three ways: first, by the affidavit of the claimant; second, by

27
LTD cases

agreement of the respective claimants, if there are more than one; or, third, from
the corresponding tax declaration of the real property.[42]
In this case, the value of the property cannot be determined using the first method,
because the records are bereft of any affidavit executed by respondent as to the
value of the property. Likewise, valuation cannot be done through the second
method, because this method finds application only where there are multiple
claimants who agree on and make a joint submission as to the value of the
property. Here, only respondent Bantigue Point Development Corporation claims
the property.
The value of the property must therefore be ascertained with reference to the
corresponding Tax Declarations submitted by respondent Corporation together
with its application for registration. From the records, we find that the assessed
value of the property is 4,330, 1,920 and 8,670, or a total assessed value
of 14,920 for the entire property.[43] Based on these Tax Declarations, it is evident
that the total value of the land in question does not exceed 100,000. Clearly, the
MTC may exercise its delegated jurisdiction under the Judiciary Reorganization
Act, as amended.
III
A certification from the CENRO is not sufficient proof that the
property in question is alienable and disposable land of the public
domain.
Even as we affirm the propriety of the MTCs exercise of its delegated
jurisdiction, we find that the lower court erred in granting respondent Corporations
application for original registration in the absence of sufficient proof that the
property in question was alienable and disposable land of the public domain.
The Regalian doctrine dictates that all lands of the public domain belong to
the State.[44] The applicant for land registration has the burden of overcoming the
presumption of State ownership by establishing through incontrovertible evidence
that the land sought to be registered is alienable or disposable based on a positive
act of the government.[45] We held in Republic v. T.A.N. Properties, Inc. that a
CENRO certification is insufficient to prove the alienable and disposable character
of the land sought to be registered.[46] The applicant must also show sufficient proof

28
LTD cases

that the DENR Secretary has approved the land classification and released the land
in question as alienable and disposable.[47]
Thus, the present rule is that an application for original registration must be
accompanied by (1) a CENRO or PENRO [48] Certification; and (2) a copy of the
original classification approved by the DENR Secretary and certified as a true copy
by the legal custodian of the official records.[49]
Here, respondent Corporation only presented a CENRO certification in
support of its application.[50] Clearly, this falls short of the requirements for original
registration.
We therefore remand this case to the court a quo for reception of further
evidence to prove that the property in question forms part of the alienable and
disposable land of the public domain. If respondent Bantigue Point Development
Corporation presents a certified true copy of the original classification approved by
the DENR Secretary, the application for original registration should be granted. If
it fails to present sufficient proof that the land in question is alienable and
disposable based on a positive act of the government, the application should be
denied.
WHEREFORE, premises considered, the instant Petition for Review is DENIED.
Let this case be REMANDED to the Municipal Trial Court of San Juan, Batangas,
for reception of evidence to prove that the property sought to be registered is
alienable and disposable land of the public domain.
SO ORDERED.

FIRST DIVISION
SPOUSES MANUEL AND
FLORENTINA DEL ROSARIO,
Petitioners,

G.R. No. 170575

29
LTD cases

Present:
- versus -

CORONA, C.J., Chairperson,


VELASCO, JR.,
LEONARDO-DE CASTRO,
DEL CASTILLO, and
PEREZ, JJ.

GERRY ROXAS FOUNDATION,


INC.,
Promulgated:
Respondent.
June 8, 2011
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - x

DECISION
DEL CASTILLO, J.:
The allegations in the complaint and the reliefs prayed for are the determinants of
the nature of the action[1] and of which court has jurisdiction over the action.[2]
This Petition for Review on Certiorari assails the April 26, 2005 Decision[3] of the
Court of Appeals (CA) in CA-G.R. SP No. 87784 which dismissed the Petition for
Review before it. Also assailed is the CA Resolution[4] dated November 15, 2005
denying the Motion for Reconsideration thereto.
Factual Antecedents
The controversy between petitioners Manuel and Florentina Del Rosario
and respondent Gerry Roxas Foundation Inc. emanated from a Complaint for Unlawful
Detainer filed by the former against the latter, the surrounding circumstances relative
thereto as summarized by the CA in its assailed Decision are as follows:
The petitioner Manuel del Rosario appears to be the registered owner
of Lot 3-A of Psd-301974 located in Roxas City which is described in and
covered by Transfer Certificate of Title No. T-18397 of the Registry of Deeds
for the City of Roxas.
Sometime in 1991, the respondent, as a legitimate foundation, took
possession and occupancy of said land by virtue of a memorandum of

30
LTD cases

agreement entered into by and between it and the City of Roxas. Its possession
and occupancy of said land is in the character of being lessee thereof.
In February and March 2003, the petitioners served notices upon the
respondent to vacate the premises of said land. The respondent did not heed
such notices because it still has the legal right to continue its possession and
occupancy of said land.[5]

On July 7, 2003, petitioners filed a Complaint[6] for Unlawful Detainer against the
respondent before the Municipal Trial Court in Cities (MTCC) of Roxas City, docketed
as Civil Case No. V-2391. Said complaint contains, among others, the following
significant allegations:
3. Plaintiffs are the true, absolute and registered owner[s] of a parcel of
land, situated at Dayao, Roxas City and covered by and described in Transfer
Certificate of Title No. 18397 issued to the plaintiffs by the Register of Deeds
for Roxas Cityas evidenced by a xerox copy thereof which is hereto attached
as Annex A.
4. Sometime in 1991, without the consent and authority of the
plaintiffs, defendant took full control and possession of the subject property,
developed the same and use[d] it for commercial purposes.
xxxx
7. Plaintiffs have allowed the defendant for several years, to make use
of the land without any contractual or legal basis. Hence, defendants
possession of the subject property is only by tolerance.
8. But [plaintiffs] patience has come to its limits. Hence, sometime in
the last quarter of 2002, plaintiffs made several demands upon said defendant
to settle and/or pay rentals for the use of the property.
xxxx
10. Notwithstanding receipt of the demand letters, defendant failed and
refused, as it continues to fail and refuse to pay reasonable monthly rentals for
the use and occupancy of the land, and to vacate the subject premises despite
the lapse of the fifteen-day period specified in the said demand

31
LTD cases

letters. Consequently, defendant is unlawfully withholding possession of the


subject property from the plaintiffs, who are the owners thereof.[7]

Upon service of summons, respondent filed its Answer[8] dated July 31, 2003
where it averred that:
3. The defendant ADMITS the allegations set forth in paragraph 4 of
the Complaint to the effect that the defendant took full control and possession
of the subject property, developed the same and has been using the premises in
accordance with its agreements with the City of Roxas and the purposes of the
defendant corporation without any objection or opposition of any kind on the
part of the plaintiffs for over twenty-two long years; the defendant specifically
DENIES the allegations contained in the last part of this paragraph 4 of the
Complaint that the defendant has used the property leased for commercial
purposes, the truth of the matter being that the defendant has used and [is] still
using the property only for civic non-profit endeavors hewing closely to
purposes of the defendant Gerry Roxas Foundation Inc., inter alia, devoted to
general welfare, protection, and upliftment of the people of Roxas City, Capiz,
and in Panay Island, and elsewhere in the Philippines; that the Foundation has
spent out of its own funds for the compliance of its avowed aims and
purposes, up to the present, more than P25M, and that all the improvements,
including a beautiful auditorium built in the leased premises of the Foundation
shall accrue to the CITY (of Roxas), free from any compensation whatsoever,
upon the expiration of this Lease (Memorandum of Agreement, Annex 2
hereof), eighteen (18) years hence;
xxxx
5. The defendant specifically DENIES the allegations set forth in
paragraph 7 of the Complaint, the truth being that the defendant took
possession of the subject property by virtue of Memorandums of Agreement,
photo-copies of which are hereto attached as Annexes 1 and 2 and made
integral parts hereof, entered into by defendant and the City of Roxas, which is
the true and lawful owner thereof; thus, the possession of the subject property
by the defendant foundation is lawful, being a lessee thereof;
xxxx
8. The defendant ADMITS the allegations set forth in paragraph 10 of
the Complaint that defendant refused to pay monthly rental to the plaintiffs

32
LTD cases

and to vacate the premises, but specifically DENIES the rest of the allegations
thereof, the truth being that defendant has no obligation whatsoever, to the
plaintiffs, as they are neither the owners or lessors of the land occupied by
defendant;
xxxx
As and by way of
AFFIRMATIVE DEFENSE
The defendant repleads the foregoing allegations, and avers further
that:
12. The plaintiffs have no cause of action against defendant.
The leased property does not belong to the plaintiffs. The property
covered by Transfer Certificate of Title No. T-18397, [is] occupied by the
[defendant] as [lessee] of the City of Roxas since 1991, the latter having
acquired it by purchase from the plaintiffs way back on February 19, 1981, as
evidenced by the Deed of Absolute Sale which is hereto attached as Annex 3
and made an integral part hereof. While, admittedly, the said certificate of title
is still in the name of the plaintiffs, nevertheless, the ownership of the property
covered therein has already transferred to the City of Roxas upon its delivery
to it. Article 1496 of the Civil Code provides that, ownership of the thing sold
is acquired by the vendee from the moment it is delivered to him in any of the
ways specified in articles 1497 to 1501, or in any other manner signifying an
agreement that the possession is transferred from the vendor to the vendee. It
is also provided under Article 1498 of the Civil Code that, when the sale is
made through a public instrument, the execution thereof shall be equivalent to
the delivery of the thing, which is the object of the contract, if from the deed
the contrary does not appear or cannot clearly be inferred. Upon execution of
the Deed of Absolute Sale (Annex 3), the plaintiffs have relinquished
ownership of the property subject thereof in favor of the vendee, City
of Roxas. Necessarily, the possession of the property subject of the said Deed
of Absolute Sale now pertains to the City of Roxas and the plaintiffs have no
more right, whatsoever, to the possession of the same. It is defendant
foundation by virtue of the Memorandums of Agreement (Annexes 1 and 2
hereof), which has the legal right to have possession of the subject property;[9]

33
LTD cases

After the MTCC issued an Order setting the case for preliminary conference,
respondent filed on October 20, 2003 a Motion to Resolve its Defenses on Forum
Shopping and Lack of Cause of Action. Records show that before the instant case was
filed, the City of Roxas had already filed a case against petitioners for Surrender of
Withheld Duplicate Certificate Under Section 107, [Presidential Decree No.] 1529
docketed as Special Case No. SPL-020-03 with the Regional Trial Court (RTC)
of Roxas City. Subsequently, on October 27, 2003, petitioners filed their Opposition to
the said Motion.
Ruling of the Municipal Trial Court in Cities
On November 24, 2003, the MTCC issued an Order [10] resolving the respondents
Motion. In the said Order, the MTCC held that:
The plaintiffs [have] no cause of action against herein defendant. The
defendant is the lessee of the City of Roxas of the parcel of land in
question. There has been no previous contractual relationship between the
plaintiffs Del Rosarios and the defendant Gerry Roxas Foundation, Inc.
affecting the title of the land leased by the [Gerry] Roxas Foundation. The
Gerry Roxas Foundation, Inc. has not unlawfully withheld the possession of
the land it is leasing from its lessor. Its right to the physical possession of the
land leased by it from the City of Roxas subsists and continues to subsist until
the termination of the contract of lease according to its terms and pursuant to
law.
The defendant had presented as its main defense that the property was
already sold by the plaintiffs to the present lessor of the property, the City of
Roxas thru a Deed of Absolute Sale dated February 19, 1981 executed by
herein [plaintiff] spouses as vendors.
Plaintiffs had not directly and specifically shown that the purported
Deed of Absolute Sale does not exist; rather, they contend that said document
is merely defective. They had not even denied the signatories to the said
Contract of Sale; specifically the authenticity of the spouses-plaintiffs
signatures; all that plaintiffs did merely referred to it as null and void and
highly questionable without any specifications.
When the parties pleadings fail to tender any issue of fact, either
because all the factual allegations have been admitted expressly or impliedly;

34
LTD cases

as when a denial is a general denial; there is no need of conducting a trial,


since there is no need of presenting evidence anymore. The case is then ripe
for judicial determination, either through a judgment on the pleadings (Rules
of Court, Rule 34) or by summary judgment under Rule 35, Rules of Court.
In the instant case, plaintiffs alleged that sometime in 1991, without the
consent and authority of the plaintiffs, defendant took full control and
possession of the subject property, developed the same and use[d] it for
commercial purposes. x x x for so many years, plaintiffs patiently waited for
someone to make representation to them regarding the use of the subject
property, but the same never happened. Plaintiff[s] have allowed the defendant
for several years, to make use of the land without any contractual or legal
basis. Hence, defendants possession of the subject property is only by
tolerance.
xxxx
Defendant admits the allegations of the plaintiffs that the defendant
took full control and possession of the subject property, developed the same
and has been using the premises in accordance with its agreements with the
City of Roxas and the purposes of the defendant corporation without any
objection or opposition of any kind on the part of the plaintiffs for over
twenty-two long years.
That the defendants possession of the subject property is by virtue of a
contract of lease entered into by the defendant foundation with the City of
Roxas which is the true and lawful owner, the latter having acquired said
property by virtue of a Deed of Absolute Sale as early as February 19, 1981,
long before the defendant foundations occupation of the property. In Alcos v.
IAC 162 SCRA 823 (1988), Buyers immediate possession and occupation of
the property was deemed corroborative of the truthfulness and authenticity of
the deed of sale.
WHEREFORE, although this Court finds the defense on forum
shopping interposed by the defendant to be untenable and unmeritorious, and
hence, denied; this Court still finds the pleadings filed by the plaintiffs-spouses
to be without a cause of action and hence, dismisses this instant
complaint. With cost against the plaintiffs.
SO ORDERED.[11]

35
LTD cases

Ruling of the Regional Trial Court


On appeal, the RTC of Roxas City, Branch 17 rendered a Decision[12] dated July 9, 2004
affirming the MTCC Order.
Ruling of the Court of Appeals
Aggrieved, petitioners filed with the CA a Petition for Review. However, the CA,
in a Decision[13] dated April 26, 2005, dismissed the petition and affirmed the assailed
Decision of the RTC.
Petitioners timely filed a Motion for Reconsideration [14] which was, however,
denied in a Resolution[15] dated November 15, 2005.
Issues
Still undaunted, petitioners now come to this Court on a Petition for Review
on Certiorari raising the following issues:
I. Whether x x x in determining if there is a case for unlawful detainer, a court
should limit itself in interpreting a single phrase/allegation in the
complaint; and,
II. Whether x x x there exists an unlawful detainer in this case.[16]

Our Ruling
The petition is bereft of merit.
The allegations in petitioners Complaint
constitute judicial admissions.

36
LTD cases

Petitioners alleged in their Complaint before the MTCC, among others, that: (1)
sometime in 1991, without their consent and authority, respondent took full control and
possession of the subject property, developed the same and used it for commercial
purposes; and (2) they allowed the respondent for several years, to make use of the land
without any contractual or legal basis. Petitioners thus conclude that respondents
possession of subject property is only by tolerance.
Section 4, Rule 129 of the Rules of Court provides that:
Sec. 4. Judicial admissions. An admission, verbal or written, made by a party in
the course of the proceedings in the same case, does not require proof. x x x

A judicial admission is one so made in pleadings filed or in the progress of a trial


as to dispense with the introduction of evidence otherwise necessary to dispense with
some rules of practice necessary to be observed and complied with. [17] Correspondingly,
facts alleged in the complaint are deemed admissions of the plaintiff and binding upon
him.[18] The allegations, statements or admissions contained in a pleading are conclusive
as against the pleader.[19]
In this case, petitioners judicially admitted that respondents took control and
possession of subject property without their consent and authority and that respondents
use of the land was without any contractual or legal basis.
Nature of the action is determined by the
judicial admissions in the Complaint.

In Spouses Huguete v. Spouses Embudo,[20] citing Caiza v. Court of Appeals,


[21]
this Court held that what determines the nature of an action as well as which court has
jurisdiction over it are the allegations of the complaint and the character of the relief
sought.

37
LTD cases

This Court, in Sumulong v. Court of Appeals,[22] differentiated the distinct causes of action
in forcible entry vis--vis unlawful detainer, to wit:
Forcible entry and unlawful detainer are two distinct causes of action defined in
Section 1, Rule 70 of the Rules of Court. In forcible entry, one is deprived of physical
possession of any land or building by means of force, intimidation, threat, strategy, or
stealth. In unlawful detainer, one unlawfully withholds possession thereof after the
expiration or termination of his right to hold possession under any contract, express or
implied. In forcible entry, the possession is illegal from the beginningand the only issue is
who has the prior possession de facto. In unlawful detainer, possession was originally
lawful but became unlawful by the expiration or termination of the right to possess and
the issue of rightful possession is the one decisive, for in such action, the defendant is the
party in actual possession and the plaintiff's cause of action is the termination of the
defendant's right to continue in possession.[23]

The words by force, intimidation, threat, strategy or stealth shall include every
situation or condition under which one person can wrongfully enter upon real property
and exclude another, who has had prior possession, therefrom. [24] The foundation of the
action is really the forcible exclusion of the original possessor by a person who has
entered without right.[25]
The act of going on the property and excluding the lawful possessor therefrom
necessarily implies the exertion of force over the property, and this is all that is necessary.
[26]
The employment of force, in this case, can be deduced from petitioners allegation that
respondent took full control and possession of the subject property without their consent
and authority.
Stealth, on the other hand, is defined as any secret, sly, or clandestine act to avoid
discovery and to gain entrance into or remain within residence of another without
permission,[27] while strategy connotes the employment of machinations or artifices to
gain possession of the subject property.[28] The CA found that based on the petitioners
allegations in their complaint, respondents entry on the land of the petitioners was by
stealth x x x.[29] However, stealth as defined requires a clandestine character which is not

38
LTD cases

availing in the instant case as the entry of the respondent into the property appears to be
with the knowledge of the petitioners as shown by petitioners allegation in their
complaint that [c]onsidering the personalities behind the defendant foundation and
considering further that it is plaintiffs nephew, then the vice-mayor, and now the Mayor
of the City of Roxas Antonio A. del Rosario, although without any legal or contractual
right, who transacted with the foundation, plaintiffs did not interfere with the activities of
the foundation using their property.[30] To this Courts mind, this allegation if true, also
illustrates strategy.
Taken in its entirety, the allegations in the
Complaint establish a cause of action for
forcible entry, and not for unlawful detainer.

In forcible entry, one is deprived of physical possession of any land or building by


means of force, intimidation, threat, strategy, or stealth.[31] [W]here the defendants
possession of the property is illegal ab initio, the summary action for forcible entry
(detentacion) is the remedy to recover possession.[32]
In their Complaint, petitioners maintained that the respondent took possession and
control of the subject property without any contractual or legal basis. [33] Assuming that
these allegations are true, it hence follows that respondents possession was illegal from
the very beginning. Therefore, the foundation of petitioners complaint is one for forcible
entry that is the forcible exclusion of the original possessor by a person who has entered
without right.[34] Thus, and as correctly found by the CA, there can be no tolerance as
petitioners alleged that respondents possession was illegal at the inception.[35]
Corollarily, since the deprivation of physical possession, as alleged in
petitioners Complaint and as earlier discussed, was attended by strategy and force, this
Court finds that the proper remedy for the petitioners was to file a Complaint for Forcible
Entry and not the instant suit for unlawful detainer.

39
LTD cases

Petitioners should have filed a Complaint for


Forcible Entry within the reglementary oneyear period from the time of dispossession.

Petitioners likewise alleged in their Complaint that respondent took possession


and occupancy of subject property in 1991. Considering that the action for forcible entry
must be filed within one year from the time of dispossession,[36] the action for forcible
entry has already prescribed when petitioners filed their Complaint in 2003. As a
consequence, the Complaint failed to state a valid cause of action against the respondent.
In fine, the MTCC properly dismissed the Complaint, and the RTC and the CA
correctly affirmed said order of dismissal.
WHEREFORE, the petition is DENIED. The Decision dated April 26, 2005
and the Resolution dated November 15, 2005 of the Court of Appeals in CA-G.R. SP No.
87784 are AFFIRMED.
SO ORDERED.

40
LTD cases

MACTAN-CEBU INTERNATIONAL G.R. No. 171535


AIRPORT AUTHORITY,
Petitioner,
Present:
PUNO, C.J., Chairperson,
- versus - CARPIO,
CORONA,
LEONARDO-DE CASTRO, and
BERSAMIN, JJ.
SPOUSES EDITO and MERIAN
TIROL and SPOUSES ALEJANDRO Promulgated:
and MIRANDA NGO,
Respondents. June 5, 2009
x-------------------------------------------------x

DECISION

PUNO, C.J.:

Before the Court is a Petition for Review on Certiorari under


Rule 45 of the 1997 Rules of Civil Procedure seeking to reverse,
annul and set aside (i) the May 27, 2005 Decision [1] of the Court of

41
LTD cases

Appeals in CAG.R. CV No. 72867 entitled Spouses Edito and


Merian Tirol, et al. v. Mactan-Cebu International Airport
Authority, and (ii) its February 17, 2006 Resolution[2] denying
petitioners motion for reconsideration.

The instant case finds its genesis in a complaint for quieting


of title filed on August 8, 1996 by respondents, Spouses Edito and
Merian Tirol and Spouses Alejandro and Miranda Ngo, against
petitioner Mactan-Cebu International Airport Authority (MCIAA).
The facts were aptly summarized by the Court of Appeals as
follows:
The instant appeal revolves around a certain parcel
of land, Lot No. 4763-D, over which the parties to the
above-entitled case assert ownership and possession.

xxx xxx xxx

Plaintiffs-appellees and business partners, Edito P.


Tirol and Alejandro Y. Ngo, along with their respective
spouses, claim to have purchased a 2,000 square meter
parcel of land, Lot No. 4763-D, from a certain Mrs. Elma S.
Jenkins, a Filipino citizen married to a certain Mr. Scott
Edward Jenkins, an American citizen, per Deed of
Absolute Sale dated September 15, 1993. Plaintiffsappellees bought the said property on the strength of the
apparent clean title of vendor Jenkins as evidenced by the
Tax Declaration and Transfer Certificate of Title No. 18216,
all under Mrs. Elma Jenkins name, which bear no
annotation of liens, encumbrances, lis pendens or any
adverse claim whatsoever. After the sale wherein
plaintiffs-appellees were purportedly purchasers for value
and in good faith, they succeeded in titling the said lot

42
LTD cases

under their names per Transfer Certificate of Title No.


27044 on September 20, 1993, and further proceeded to
pay realty taxes thereon. It was only in January 1996 that
plaintiffs-appellees discovered a cloud on their title when
their request for a Height Clearance with the Department
of Transportation and Communications was referred to the
defendant-appellant Mactan[-]Cebu International Airport
Authority (MCIAA, for brevity), on account of the latters
ownership of the said lot by way of purchase thereof
dating far back to 1958.

At this point, it becomes imperative to trace the


chain of ownership over Lot No. 4763-D. It is undisputed
that the original owners of said property were the spouses
Julian Cuison and Marcosa Cosef, who owned the entire
Lot No. 4763, of which Lot No. 4763-D is a portion of (sic).
Unfortunately for herein parties, this is where the
similarity of facts end (sic), and the instant controversy
begins.

According
to
plaintiffs-appellees:
Originally,
the
entire Lot No. 4763 was decreed in the names of spouses
Julian Cuison and Marcosa Cosef under the provisions of
the Land Registration Act on June 1, 1934. [In] January
1974, spouses Julian Cuison and Marcosa Cosef sold Lot
No. 4763 to Spouses Moises Cuizon and Beatriz
Patalinghug. The latter spouses thereafter succeeded to
secure the reconstitution of Original Certificate of Title of
Lot No. 4763, Opon Cadastre as evidenced by Court Order
dated July 3, 1986. Said Court Order subsequently
became final and executory, thus a reconstituted title,
OCT No. RO-2754, was issued in the name of the original
owners-spouses Julian Cuison and Marcosa Cosef. On

43
LTD cases

September 12, 1986, the Deed of Absolute Sale between


spouses Julian Cuison/Marcosa Cosef and spouses Moises
Cuizon/Beatriz Patalinghug was registered and annotated
on OCT No. RO-2754, which was cancelled to give way to
the issuance of TCT No. 16735 in the name of spouses
Moises Cuizon and Beatriz Patalinghug. Thereafter, the
latter sold a portion, denominated as Lot No. 4763-D, to
Mrs. Elma Jenkins on December 15, 1987, who[,] as
earlier discussed, sold the same lot to herein plaintiffsappellees on September 15, 1993. Plaintiffs-appellees
contend that all throughout the chain of ownership, the
titles albeit from a reconstituted one of the previous
owners were absolutely devoid of any annotations of
liens, encumbrances, lis pendens, adverse claim, or
anything that may cause a reasonable man of ordinary
prudence and diligence to suspect the contrary.
Furthermore, plaintiffs-appellees have been in actual,
uninterrupted and peaceful possession of the property
since 1993, and if the possession of their predecessors-ininterest be tacked, plaintiffs-appellees would be in
constructive, uninterrupted and peaceful possession for
sixty-two (62) long years as of the date of filing their
Complaint for Quieting of Title in the court a quo.

According to the defendant-appellant: On March 23,


1986[3], the original owners, spouses Julian Cuison and
Marcosa Cosef sold Lot No. 4763 to the government,
through the [then] Civil Aeronautics Administration (CAA,
for brevity). In a Certificate dated March 19, 1959, vendor
Julian Cuison confirmed that he was the possessor and
actual owner of Lot No. 4763 which was located within the
Mactan Alternate International Airport and that the
duplicate copy of the certificate of title was lost or
destroyed during the last war without him or his

44
LTD cases

predecessor(s)-in-interest having received a copy thereof.


Since then, the government, through defendant-appellant
MCIAA, has been in open, continuous, exclusive and
adverse possession of the property in the concept of
owner. Said lot allegedly became part of the Clear Zone of
Runway 22 for purposes of required clearance for take-off
and landing. Moreover, defendant-appellant asserts that
plaintiffs-appellees are nothing more than trustees of Lot
No. 4763-D in favor of defendant-appellant MCIAA, being
merely successors-in-interest of the original owners,
spouses Julian Cuison and Marcosa Cosef, who undertook
in paragraph 4 of the Deed of Absolute Sale, to assist in
the reconstitution of title so that the land may be
registered in the name of vendee government, through
defendant-appellant MCIAA. In paragraph 5 of the same
Deed of Absolute Sale, the parties also agreed that the
property be registered under Act 3344 pending the
reconstitution and issuance of title. Purportedly, in gross
and evident bad faith and in open violation of their Deed
of Absolute Sale, the spouses Julian Cuison and Marcosa
Cosef again sold the same property to spouses Moises
Cuizon and Beatriz Patalinghug, who in turn sold the lot to
Mrs. Elma Jenkins, who eventually sold the same to herein
plaintiffs-appellees. Defendant-appellant MCIAA further
imputes bad faith to plaintiffs-appellees under the
rationale that because their title came from a
reconstituted one and that Lot No. 4763 was within the
Clear Zone of Runway 22 of the airport, plaintiffsappellees should have exerted effort in researching the
history of ownership and cannot possibly claim to be
innocent of MCIAAs ownership and possession thereof.[4]

In its December 4, 2000 Decision, [5] the trial court ruled in


favor of petitioner MCIAA in this wise:

45
LTD cases

WHEREFORE, premises considered, the Court rules


in favor of defendant and thus DISMISSES the complaint
of plaintiffs for want of merit.
The Republic of the Philippines, represented by the
defendant MCIAA, is adjudged as (sic) the lawful owner of
the entire Lot 4763, Opon Cadastre.

The Deed of Absolute Sale involving Lot 4763-D in


favor of plaintiffs is hereby declared null and void.

Transfer Certificate of Title No. 27044 for Lot 4763-D


under the names of plaintiffs is likewise deemed null and
void.

The Register of Deeds is directed to issue to the


defendant MCIAA a transfer certificate of title covering
the whole Lot 4763.

The counterclaim of defendant, however, is denied


for lack of merit.

No pronouncement as to costs.

SO ORDERED.

The trial court held that there was a valid transfer of title from
Spouses Julian Cuison and Marcosa Cosef to the Civil Aeronautics

46
LTD cases

Administration (CAA), and accordingly, the respondents did not


buy Lot No. 4763-D from a person who could validly dispose of it.
It likewise ruled that the government (through the CAA, and now
respondent MCIAA) has been in possession of the disputed land
since it bought the same in 1958, when a public deed of absolute
sale was executed in its favor. Lastly, respondents were
considered as having bought Lot No. 4763-D in bad faith since
they ignored circumstances that should have made them curious
enough to investigate beyond the four corners of the Transfer
Certificate of Title. In the trial courts view, the facts that Lot No.
4763-D (i) is only about 320 meters from the center of the runway
and therefore part of the clear zone and (ii) has been vacant for
several decades should have alerted the respondents to the
possibility that the lot could be part of the airport complex and
therefore owned by petitioner.
Respondents filed their Motion for Reconsideration [6] on
January 23, 2001, and a Supplemental (sic) to Motion for
Reconsideration[7] on May 17, 2001. Petitioner duly filed its
Opposition[8] to the said Motions on April 10, 2001 and June 13,
2001, respectively.

In an Order[9] dated August 9, 2001, the trial court did a


complete volte face and reversed its Decision. Holding that Article
1544[10] of the New Civil Code which set forth the rule on double
sales finds application to the instant case, the trial court
ratiocinated:
In the words of the Supreme Court in Cruz vs.
Cabana, this Court finds that in the case of [a] double sale
of real property[,] Article 1544 of the New Civil Code
applies. Defendant was certainly the first buyer and the
plaintiffs [were] the subsequent buyers, to be exact
fourth (sic).

47
LTD cases

But who among the parties herein has a better right


to Lot No. 4763-D? To answer this question, it is necessary
to determine first the issue [of] whether or not the
plaintiffs were buyers in good faith.

xxx xxx xxx

The Court is not convinced that indeed the plaintiffs


were buyers in bad faith. xxx The registration of the deed
of absolute sale by the defendant at the Registry of Deeds
under Act No. 3344 sometime in 1959 is not the
registration
being
contemplated
under
the
law. Registration under Act No. 3344 differs materially
from registration under the Spanish Mortgage Law and
under the Land Registration Act. In the Spanish Mortgage
Law[,] there is [an] express provision (Article 17) to the
effect that titles recorded thereunder cannot be annulled
or invalidated by prior unrecorded rights, while the Land
Registration Act (No. 496) contains a special disposition
that only transactions noted on the certificate of title and
entered in the registry books can bind the land. On the
other hand, transactions registered under Act No. 3344
cannot defeat a third person with a better right. Of
course[,] the law does not define exactly what may be
considered a better right, leaving the matter of its
construction to the courts. The main reason for the
difference in the operation of Act No. 3344 compared
with the other systems of registration lies obviously in the
fact that recordings under said Act No. 3344 are not
preceded by any investigation, judicial or administrative,
as to the validity or efficacy of the title sought to be
recorded. It is undisputed that Lot No. 4763 was a
registered land, only that at the time of registering

48
LTD cases

defendants document of sale there was no copy of the


certificate of title because the same was not available
due to the after effect of the last global war.

Hence, the Court agrees with the plaintiffs when


they contended that even at the time when OCT No. RO2754 was issued[,] there was no document allegedly
proving its (defendant) ownership being annotated on the
certificate of title. At the time when Transfer Certificates
of Title Nos. 16735, 18216 and 27044 were issued to the
plaintiffs and their predecessors-in-interest, there were no
annotations of the alleged claim of the defendant. Thus,
the plaintiffs have all the good reasons to rely on the
validity of the titles. xxx

xxx xxx xxx

xxx The fact that Lot No. 4763-D was within 320
meters from the center of the runway and within airport
premises, was part of the clear zone, and had long been
vacant are not enough warning to third persons dealing
[with] such land. It was undisputed that the lot in
controversy is outside the perimeter fence of the
defendant. The fact that the said lot was part of the clear
zone is not sufficient justification to warn the plaintiffs
in (sic) buying it. Such fact was merely for the purpose of
construction of buildings, not for realty ownership.
[11]
(italics in the original)

49
LTD cases

Aggrieved, petitioner then appealed to the Court of Appeals which


rendered a Decision[12] on May 27, 2005, the dispositive portion of
which states:
WHEREFORE, premises considered, the appeal is
hereby DENIED. Accordingly, the assailed Order dated
August 9, 2001 is AFFIRMED.

SO ORDERED.

On June 21, 2005, petitioner seasonably moved for its


reconsideration but the Court of Appeals denied the same in its
February 17, 2006 Resolution.[13]

Hence this appeal under Rule 45 of the 1997 Rules of Civil


Procedure, where petitioner argues that:
THE COURT OF APPEALS COMMITTED A SERIOUS ERROR
OF LAW WHEN IT AFFIRMED THE AUGUST 9, 2001 ORDER
OF THE TRIAL COURT EVEN IF THE SAME IS NOT
SUPPORTED BY THE EVIDENCE ON RECORD.[14]

Simply stated, the issue may be synthesized as follows:


Between respondents Spouses Tirol and Spouses Ngo, on the one
hand, and petitioner MCIAA, on the other, who has the superior
right to the subject property?

We rule in favor of the respondents, but on grounds different


than those relied upon by the Court of Appeals and the trial court.

50
LTD cases

Preliminarily, reliance on Article 1544 of the New Civil Code


is misplaced. In Cheng v. Genato, et al.,[15] we enumerated the
requisites that must concur for Article 1544 to apply, viz.:

(a) The two (or more) sales transactions must constitute


valid sales;
(b) The two (or more) sales transactions must pertain to
exactly the same subject matter;
(c) The two (or more) buyers at odds over the rightful
ownership of the subject matter must each represent
conflicting interests; and
(d) The two (or more) buyers at odds over the rightful
ownership of the subject matter must each have
bought from the very same seller.

Obviously, said provision has no application in cases where


the sales involved were initiated not by just one vendor but by
several successive vendors.[16] In the instant case, respondents
and petitioner had acquired the subject property from different
transferors. Petitioner, through its predecessor-in-interest (CAA),
acquired the entire Lot No. 4763 from its original owners, spouses
Julian Cuison and Marcosa Cosef, on March 23, 1958. On the other
hand, respondents acquired the subject parcel of land, a portion
of Lot No. 4763, from Mrs. Elma Jenkins, another transferee, some
thirty-five years later. The immediate transferors of Elma Jenkins
were the spouses Moises Cuizon and Beatriz Patalinghug who, in
turn, obtained the subject property from spouses Julian Cuison
and Marcosa Cosef. Therefore, the instant controversy cannot be
governed by Article 1544 since petitioner and respondents do not
have the same immediate seller.

51
LTD cases

This notwithstanding, we find that respondents have a better


right to Lot No. 4763-D.

Petitioner does not contest that Lot No. 4763, of which the
property subject of this case is a part, was registered under Act
No. 496 (the Land Registration Act) even before the Second World
War. Paragraph 4 of the Deed of Absolute Sale [17] between
petitioner and Spouses Julian Cuison and Marcosa Cosef
stipulates, in relevant part:
That since the Original/Transfer Certificate of Title of the
aforementioned property has been lost and/or destroyed,
or since the said lot is covered by Cadastral Case No. 20
and a decree issued on July 29, 1930, xxx the VENDEE
hereby binds itself to reconstitute said title at its own
expense and that the VENDOR, his heirs, successors and
assigns bind themselves to help in the reconstitution of
title so that the said lot may be registered in the name of
the VENDEE in accordance with law. (italics supplied)

Additionally, in his Certification [18] dated March 19, 1959, Julian


Cuison stated that the duplicate copy of the certificate of title for
[Lot No. 4763] was lost or destroyed during the last war without
having been received by [him] or [his] predecessor-in-interest.

In this regard, well-settled is the rule that registration of


instruments must be done in the proper registry in order to effect
and bind the land.[19] Prior to the Property Registration Decree of
1978, Act No. 496 (or the Land Registration Act) governed the
recording of transactions involving registered land, i.e., land with
a Torrens title. On the other hand, Act No. 3344, as amended,
provided for the system of recording of transactions

52
LTD cases

over unregistered real estate without prejudice to a third party


with a better right.[20] Accordingly, if a parcel of land covered by
a Torrens title is sold, but the sale is registered under Act No. 3344
and not under the Land Registration Act, the sale is not
considered registered[21] and the registration of the deed does not
operate as constructive notice to the whole world. [22]

Consequently, the fact that petitioner MCIAA was able to


register its Deed of Absolute Sale under Act No. 3344 is of no
moment, as the property subject of the sale is indisputably
registered land. Section 50 of Act No. 496 in fact categorically
states that it is the act of registration that shall operate to convey
and affect the land; absent any such registration, the instrument
executed by the parties remains only as a contract between them
and as evidence of authority to the clerk or register of deeds to
make registration, viz.:
SECTION 50. An owner of registered land may convey,
mortgage, lease, charge, or otherwise deal with the same
as fully as if it had not been registered. He may use forms
of deeds, mortgages, leases, or other voluntary
instruments like those now in use and sufficient in law for
the purpose intended. But no deed, mortgage, lease, or
other voluntary instrument, except a will, purporting to
convey or affect registered land, shall take effect as a
conveyance or bind the land, but shall operate only as a
contract between the parties and as evidence of authority
to the clerk or register of deeds to make registration. The
act of registration shall be the operative act to convey
and affect the land, and in all cases under this Act the
registration shall be made in the office of register of
deeds for the province or provinces or city where the land
lies. (italics supplied)

53
LTD cases

Hence, respondents may not be characterized as buyers in


bad faith for having bought the property notwithstanding the
registration of the first Deed of Absolute Sale under Act No. 3344.
An improper registration is no registration at all. Likewise, a sale
that is not correctly registered is binding only between the seller
and the buyer, but it does not affect innocent third persons. [23]

Petitioner, however, is of the impression that registration


under Act No. 3344 is permissible because the duplicate copy of
the certificate of title covering Lot No. 4763-D had been lost or
destroyed. This argument does not persuade. Our pronouncement
in Amodia Vda. de Melencion, et al. v. Court of Appeals, et
al.[24] is apropos:
In the case at bench, it is uncontroverted that the
subject property was under the operation of the Torrens
System even before the respective conveyances to
AZNAR and Go Kim Chuan were made. AZNAR knew of
this, and admits this as fact. Yet, despite this knowledge,
AZNAR registered the sale in its favor under Act 3344 on
the contention that at the time of sale, there was no title
on file. We are not persuaded by such a lame excuse.

xxx xxx xxx

In this case, since the Extra-Judicial Partition of Real


Estate with Deed of Absolute Sale in favor of AZNAR was
registered under Act No. 3344 and not under Act No. 496,
the said document is deemed not registered. Rather, it
was the sale in favor of Go Kim Chuan which was
registered under Act No. 496.

54
LTD cases

AZNAR insists that since there was no Torrens title on


file in 1964, insofar as the vendors, AZNAR, and the
Register of Deeds are concerned, the subject property
was unregistered at the time. The contention is
untenable.The fact that the certificate of title over the
registered land is lost does not convert it into
unregistered land. After all, a certificate of title is merely
an evidence of ownership or title over the particular
property described therein. This Court agrees with the
petitioners that AZNAR should have availed itself of the
legal remedy of reconstitution of the lost certificate of
title, instead of registration under Act 3344. We note that
in Aznar Brothers Realty Company v. Aying, AZNAR, beset
with the similar problem of a lost certificate of title over a
registered land, sought the reconstitution thereof. It is
unfortunate that, in the instant case, despite the sale of
the subject property way back in 1964 and the existence
of the remedy of reconstitution at that time, AZNAR opted
to register the same under the improper registry (Act
3344) and allowed such status to lie undisturbed.
[25]
(italics supplied)

In the instant case, petitioner MCIAA did not bother to have


the lost title covering Lot No. 4763-D reconstituted at any time,
notwithstanding the fact that the Deed of Absolute Sale was
executed in 1958, or more than fifty years ago. Vigilantibus, non
dormientibus, jura subveniunt. Laws must come to the assistance
of the vigilant, not of the sleepy. [26] As a matter of fact, this entire
controversy may very well have been avoided had it not been for
petitioners negligence.

Furthermore, under the established principles of land


registration, a person dealing with registered land may generally

55
LTD cases

rely on the correctness of a certificate of title and the law will in


no way oblige him to go beyond it to determine the legal status of
the property,[27] except when the party concerned has actual
knowledge of facts and circumstances that would impel a
reasonably cautious man to make such inquiry. [28] Applying this
standard to the facts of this case, we rule that respondents
exercised the required diligence in ascertaining the legal condition
of the title to the subject property as to be considered innocent
purchasers for value and in good faith. We quote with favor the
factual findings of the Court of Appeals in this respect:
Defendant-appellant MCIAA also asseverates that
the close proximity of the property to the runway of the
airport (320 meters from the center line of the runway)
and the fact that it has been vacant for a considerable
period should have caused [plaintiffs-appellees] to be
dubious of the title of the previous owners thereof. This
was, in Our opinion, satisfactorily explained by plaintiffsappellees when witness Mr. Edito Tirol testified in open
court that he never thought it strange that the land had
always been vacant, and that besides, there were private
houses beside the vacant lot, suggesting that the
property must be of private ownership and not that of the
airport. Furthermore, he testified that he undertook great
care in verifying the clean title of the said land,
[e.g.,] deputizing an employee to do the necessary
research, personally copying pertinent documents
registered in the Registry of Property and even consulting
legal advice on the matter. These, for Us, are badges of
good faith. Besides, being allegedly part of the Clear
Zone, ATO aviation rules proscribe merely the installation
of buildings and other physical structures, except landing
facilities. Aviation rules (which, although repeatedly
invoked, interestingly were not presented before the court
by defendant-appellant MCIAA) do not prohibit realty
ownership.[29]

56
LTD cases

IN VIEW WHEREOF, the Petition is hereby DENIED. The May


27, 2005 Decision and the February 17, 2006 Resolution of the
Court of Appeals are AFFIRMED.

SO ORDERED.

G.R. No. 196040

August 26, 2014

FE H. OKABE, Petitioner,
vs.
ERNESTO A. SATURNINO, Respondent.
DECISION
PERALTA, J.:

57
LTD cases
Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking the
reversal of the Decision dated September 24, 2010 and Resolution dated March 9, 2011 of the
Court of Appeals (CA) in CA-G.R. SP No. 110029.
1

The facts, as culled from the records, are as follows:


The subject of the controversy is an eighty-one (81)square meter property located in Barangay San
Antonio, Makati City, which was initially covered by Transfer Certificate of Title (TCT) No.
175741under the name of the wife of respondent Ernesto A. Saturnino. Sometime in 1994, the
couple obtained a loan with the Philippine National Bank (PNB), which was secured by the subject
property. Because of the couples failure to settle their loan obligation with the bank, PNB
extrajudicially foreclosed the mortgage.
On August 24, 1999, the Certificate ofSale was inscribed on TCT No. 175741. Considering that the
property was not redeemedby respondent during the redemption period, consolidation of ownership
was inscribed on October 13, 2006 and a new TCT was issued in favor of PNB. Without taking
possession of the subject property, PNB sold the land to petitioner Fe H. Okabe on June 17, 2008.
TCT No. 225265 was later issued in petitioners name on August 13, 2008.
On November 27, 2008, petitioner filed with the Regional Trial Court (RTC) of Makati City an ExParte Petition for Issuance of Writ of Possession over the subject property, to which respondent
submitted an Opposition with Motion to Dismiss. Petitioner filed her Reply to/ Comment on the
Opposition with Motion to Dismiss, while respondent submitted his Oppositor-MovantsRejoinder
with Motion for Postponement.
3

On April 30 2009, the RTC issued an Order denying respondents Opposition with Motion to Dismiss
for lack of merit. The RTC, citing the case of Ramos v. Maalac and Lopez opined that the issuance
of a writ of possession in favor of the petitioner was merely a ministerial and complementary duty of
the court.
7

Respondent then filed an Urgent Motion for Clarification (of the Order dated 30 April 2009), then a
Motion for Reconsideration, which was followed by a Supplement to the Motion for
Reconsideration which petitioner likewise opposed.
9

10

11

12

On July 29, 2009, the RTC issued an Order denying respondents Motion for Reconsideration and
the Supplement to the Motion for Reconsideration. The RTC ruled, among other things, that the right
of the petitioner to be placed in absolute possession of the subject property was a consequence of
her right of ownership and that petitioner cannot be deprived of said possession being now the
registered owner of the property.
13

Dismayed, respondent filed on August 17, 2009 a Petition for Certiorari with the CA questioning the
Orders of the RTC based on the following grounds:
14

58
LTD cases
HON. JUDGE BENJAMIN T. POZON FAILED TO CONSIDER THE FACT THAT PRIVATE
RESPONDENT WAS ALREADY ESTOPPED FROM ASKING FOR THE ISSUANCE OF A WRIT OF
POSSESSION CONSIDERING THAT THE VERY DEED OF ABSOLUTE SALE FROM WHICH HER
ALLEGED RIGHT EMANATES EXPLCITLY (sic) GAVE HER THE ONLY OPTION OF FILING AN
EJECTMENT SUIT.
II
HON. JUDGE BENJAMIN T. POZON FAILED TO CONSIDER THAT SECTION 7 OF ACT NO. 3135,
AS AMENDED BY ACT 4118 SHOULD BE CONSTRUED STRICTLY.
15

Respondent prayed, among other things, that the CA reverse and set aside the assailed Orders and
thata Temporary Restraining Order (TRO) be issued enjoining the RTC from hearing the petition for
the issuance of a writ of possession.
Meanwhile, on November 23, 2009, the RTC rendered a Decision in favor of petitioner, which
granted her ex-parte petition and ordered that the corresponding writ of possession over the subject
property be issued in her favor. The decretal portion of which reads:
16

WHEREFORE, premises considered, and in accordance with Section 7 of Act No. 3135, as
amended, the instant petition [is] hereby GRANTED.
Let the corresponding Writ be issued in favor of the herein petitioner Fe H. Okabe to place her
inpossession of the subject property. No bond is required to be posted by petitioner Fe H. Okabe,
she, being the successor-in-interest of Philippine National Bank, the purchaser in the foreclosure
sale, which had consolidated that title on the subject property in its name prior to the herein
petitioner.
Furnish copies of this Decision to the parties and their respective counsels.
SO ORDERED.

17

Respondent filed a motion to set aside the said Decision, but the same was denied by the RTC in its
Order dated April 27, 2010.
18

On May 13, 2010, petitioner filed a Motion for Execution of Judgment.


On July 8, 2010, the RTC issued an Order granting the motion. On even date, the branch clerk of
court issued a Writ of Possession addressed to the Sheriff ordering the latter toplace petitioner in
possession of the subject property.
19

20

On July 14, 2010, the Sheriff, together with petitioner, tried to cause the service of the notice to
vacate upon the respondent, but the property was already abandoned by its occupants. The Sheriff,
with the assistance of barangay officials, thus, posted the notice to vacate together with the writ of
possession in front of the gate of the subject property.
21

59
LTD cases
On July 20, 2010, the Sheriff,the petitioner, and the barangay officials returned to the property to
cause the implementation of the writ of possession. After finding that no onewas occupying the
property, the Sheriff turned over possession of the subject property to the petitioner free and clear of
occupants and personal property.
22

In the proceedings before the CA, respondent filed a Motion to Admit Herein Memorandum of
Authorities in Amplification/Support of the Position of Petitioner in this Case and Reiterating Prayer
for Issuance of a Temporary Restraining Order and/or Writ of Preliminary Injuction. In the said
motion, respondent alleged that the RTC was about to issue the writ of possession prayed for by the
petitioner and that a TRO was necessary to prevent great and irreparable injury which respondent
may suffer if removed from possession of the property in question.
23

On July 19, 2010, the CA issued a Resolution granting the issuance of a TRO in favor of the
respondentand commanding petitioner and the RTC to refrain from committing any acts relative to
the proceedings before it upon the posting of a bond.
24

In a Manifestation dated July 21, 2010 the RTC Presiding Judge informed the CA that as much as
the court would like to comply with its directive, it can no longer do so because the writ of possession
had already been implemented by the Branch Sheriff on July 20, 2010.
25

On September 24, 2010, the CA rendered the assailed Decision which granted respondents petition
and vacatedthe challenged orders of the RTC. The falloreads:
WHEREFORE,we resolve to GRANTthe instant petition. The challenged orders below are
consequently vacated. The respondents are permanently enjoined from proceeding against the
petitioner via an expartemotion for a writ of possession.
IT IS SO ORDERED.

26

The CA opined, among other things, that although it may be true that by virtue of the contract of sale,
petitioner obtained the same rights of a purchaser-owner and which rights she derived from erstwhile
mortgagee turned owner PNB, this does not mean that the right to file an ex-parte motion for a writ
of possession under Act 3135 had also been transferred to the petitioner. Such a special right
isgranted only to purchasers in a sale made under the provisions of Act 3135. The CA ruled that to
allow a second, third, or even tenth subsequent buyer of the foreclosed property to evict the
mortgagor-debtor or his successor-in-interest from the said property or wrench away possession
from them via a mere ex-partemotion is to trample upon due process because whatever defenses
that the owner mortgagor/actual possessor may have would have been drowned and muted by the
ex-partewrit of possession. Considering that the transaction between PNB and the petitioner was by
an ordinary contract of sale, an ex-partewrit of possession may not therefore be issued in favor of
the latter.
Unfazed, petitioner filed a Motion for Reconsideration on the ground that respondents possession of
the property had become illegal and that the procedure affecting his possession was moot and
academic for he was no longer in possession of the subject property.

60
LTD cases
In a Resolution dated March 9, 2011, the CA denied petitioners
Motion for Reconsideration.
Hence, the present petition wherein petitioner raises the following arguments to support its petition:
I
RESPONDENT IS WELL AWARE OF THE FACT THAT OWNERSHIP HAD TRANSFERRED TO
PETITIONER AND THAT HIS POSSESSION OF THE PROPERTY HAD BECOME ILLEGAL.
II
PETITIONER, AS THE REGISTERED OWNER OF THE PROPERTY, IS ENJOYING POSSESSION
OF THE PROPERTY IN THE CONCEPT OF AN OWNER AND A RULING OFTHIS HONORABLE
COURT REGARDING THE PROCEDURE PERTAINING TO PETITIONERS POSSESSION OF
THE PROPERTY IS MOOT AND ACADEMIC.
27

Petitioner argues that her possession of the subject property as its registered owner should not be
disturbed. Petitioner posits that considering that respondent failed to redeem the subject property
within the redemption period, respondent should not be granted a favor nor rewarded for his failure
to redeem and for his illegal occupation of the property. Petitioner contends that the issue regarding
possession ofthe property has become moot and academic since she, being the registered owner of
the property, has been in possession thereof since July 20, 2010. Petitioner stresses that the ruling
of the CA, that she is "permanently enjoined from proceeding against the [respondent] via an expartemotion for a writ of possession," would result in an absurdity since she is already in possession
of the land.
Petitioner now prays that the Court rectify the situation and for it to reverse the ruling of the CA
based on the fact that the proceedings for the expartemotion for a writ of possession has already
been terminated and possession of the subject property was awarded by the lower court in her favor,
thus rendering the arguments raised by respondent in his petition for certiorari before the CA moot
and academic.
In essence, the issue is whether or not, in the case at bar, an ex-parte petition for the issuance of a
writ of possession was the proper remedy of the petitioner in obtaining possession of the subject
property.
Section 7 of Act No. 3135, as amended by Act No. 4118, states:
28

29

Section 7. In any sale made under the provisions of this Act, the purchaser may petition the Court of
First Instance of the province or place where the property or any part thereof is situated, to give him
possession thereof during the redemption period, furnishing bond in an amount equivalent to the use
of the property for a period of twelve months, to indemnify the debtor in case it be shown that the
sale was made without violating the mortgage or without complying with the requirements of this Act.
Such petition shall be made under oath and filed in the form of an ex partemotion x x x and the court

61
LTD cases
shall, upon approval of the bond, order that a writ of possession issue, addressed to the sheriff of the
province in which the property is situated, who shall execute said order immediately.
Under the provision cited above, the purchaser or the mortgagee who is also the purchaser in the
foreclosure sale may apply for a writ of possession during the redemption period, upon an expartemotion and after furnishing a bond.
30

In GC Dalton Industries, Inc. v. Equitable PCI Bank, the Court held that the issuance of a writ of
possession to a purchaser in an extrajudicial foreclosureis summary and ministerial in nature as
such proceeding is merely an incident in the transfer of title. Also, in China Banking Corporation v.
Ordinario, we held that under Section 7 of Act No. 3135, the purchaser in a foreclosure saleis
entitled to possession of the property.
31

32

In the recent case of Spouses Nicasio Marquez and Anita Marquez v. Spouses Carlito Alindog and
Carmen Alindog, although the Court allowed the purchaser in a foreclosure sale to demand
possession of the land during the redemption period, it still required the posting ofa bond under
Section 7 of Act No. 3135. Thus:
33

It is thus settled that the buyer in a foreclosure sale becomes the absolute owner of the property
purchased if it is not redeemed during the period of one year after the registration of the sale. As
such, he is entitled to the possession of the said property and can demand it at any time following
the consolidation of ownership in his name and the issuance to him of a new transfer certificate
oftitle. The buyer can in fact demand possession of the land even during the redemption period
except that he has to post a bond in accordance with Section 7 of Act No. 3135, as amended. No
such bond is required after the redemption period if the property is not redeemed. Possession of the
land then becomes an absolute right of the purchaser as confirmed owner. Upon proper application
and proof of title, the issuance of the writ of possession becomes a ministerial duty of the court.
34

Here, petitioner does not fall under the circumstances of the aforequoted case and the provisions of
Section 7 of Act No. 3135, as amended, since she bought the property long after the expiration of
the redemption period. Thus, it is PNB, if it was the purchaser in the foreclosure sale, or the
purchaser during the foreclosure sale, who can file the ex-parte petition for the issuance of writ of
possession during the redemption period, but it will only issue upon compliance with the provisions
of Section 7 of Act No. 3135.
In fact, the Real Estate Mortgage contains a waiver executed by the mortgagor in favor of the
mortgagee, wherein the mortgagor even waives the issuance of the writ of possession in favor of the
mortgagee. The contract provides that "effective upon the breach of any condition ofthe mortgage
and in addition to the remedies hereinstipulated, the mortgagee is hereby likewise appointed
Attorney-in-Fact of the Mortgagor/s with full power and authority with the use of force, if necessary,
to take actual possession of the mortgaged property/ies without the necessity of any judicial order or
permission, or power, to collect rents, to eject tenants, to lease or sell the mortgaged property/ies or
any part thereof at a private sale without previous notice or advertisement of any kind and execute
the corresponding bills of sale, lease or other agreement that may be deemed convenient to make
repairs or improvements on the mortgaged property/ies and pay for the same and perform any other
35

62
LTD cases
act which the Mortgagee may deem convenient for the proper administration of the mortgaged
property/ies."
36

Moreover, even without the waiver, the issuance of the writ of possession is ministerial and nonadversarial for the only issue involved is the purchasers right to possession; thus, an exparteproceeding is allowed.
1wphi1

Nevertheless, the purchaser is not left without any remedy. Section 6 of Act No. 3135, as amended
by Act No. 4118, provides:
SEC. 6. In all cases in which anextrajudicial sale is made under the special power hereinbefore
referred to, the debtor, his successor-ininterest or any judicial creditor or judgment creditor of said
debtor, or any person having a lien on the property subsequent to the mortgage or deed of trust
under which the property is sold, may redeem the same at any time within the term of one year from
and after the date of the sale; and such redemption shall be governed by the provisions of sections
four hundred and sixty-six, inclusive, of the Code ofCivil Procedure, in so far as these are not
inconsistent with the provisions of this Act.
Consequently, the provision of Section 33, Rule 39 of the Rules of Court relative to an execution sale
ismade applicable to extrajudicial foreclosure of real estate mortgages by virtue of Section 6 of Act
No. 3135, as amended.
37

Section 33, Rule 39 of the Rules of Court provides: SEC. 33. Deed and possession to be given at
expiration of redemption period; by whom executed or given. If no redemption be made within one
(1) year from the dateof registration of the certificate of sale, the purchaser is entitled toa
conveyance and possession of the property; or, if so redeemed whenever sixty (60) days have
elapsed and no other redemption has been made, and notice thereof given, and the time for
redemption has expired, the lastredemptioner is entitled to the conveyance and possession; but in all
cases the judgment obligor shall have the entire period of one (1) year from the date of registration
of the sale to redeem the property. The deed shall be executed by the officer making the sale or his
successor in office,and in the latter case shall have the same validity as though the officermaking the
sale had continued in office and executed it.
Upon the expiration of the right of redemption, the purchaser or redemptioner shall be substituted to
and acquire all the rights, title, interest and claim of the judgment obligor to the property as of the
time of the levy. The possession of the property shall be given to the purchaser or last redemptioner
by the same officer unless a third party is actually holding the property adversely to the judgment
obligor.
38

From the foregoing, upon the expiration of the right of redemption, the purchaser or redemptioner
shall besubstituted to and acquire all the rights, title, interest and claim of the judgment debtor to the
property, and its possession shall be given to the purchaser or last redemptioner unless a third party
is actually holding the property adversely to the judgment debtor. In which case, the issuance of the
writ of possession ceases to be ex-parte and non-adversarial. Thus, where the property levied upon
on execution is occupied by a party other than a judgment debtor, the procedure is for the court to

63
LTD cases
conduct a hearing to determine the nature of said possession, i.e., whether or not he is in
possession of the subject property under a claim adverse to that of the judgment debtor.
It is but logical that Section 33, Rule 39 of the Rules of Court be applied to cases involving
extrajudicially foreclosed properties that were bought by a purchaser and later sold to third-partypurchasers after the lapse of the redemption period. The remedy of a writ of possession, a remedy
that is available to the mortgagee-purchaser to acquire possession of the foreclosed property from
the mortgagor, is made available to a subsequent purchaser, butonly after hearing and after
determining that the subject property is still in the possession of the mortgagor. Unlike if the
purchaser is the mortgagee or a third party during the redemption period, a writ of possession may
issue ex-parte or without hearing. In other words, if the purchaser is a third party who acquired the
property after the redemption period, a hearing must be conducted to determine whether possession
over the subject property is still with the mortgagor or is already in the possession of a third party
holding the same adversely to the defaulting debtor or mortgagor. If the property is in the possession
of the mortgagor, a writ of possession could thus be issued. Otherwise, the remedy of a writ of
possession is no longer available to such purchaser, but he can wrest possession over the property
through an ordinary action of ejectment.
To be sure, immediately requiring the subsequent purchaser to file a separate case of ejectment
instead of a petition for the issuance of a writ of possession, albeit not ex-parte, will only prolong the
proceedings and unduly deny the subsequent purchaser of possession of the property which he
already bought.
WHEREFORE, premises considered, the instant petition is GRANTED. The Decision dated
September 24, 2010 and Resolution dated March 9, 2011 of the Court of Appeals in CA-G.R. SP No.
110029 are hereby REVERSED AND SET ASIDE.
SO ORDERED.