DepEd vs Casibang

Facts
The property in controversy is a seven thousand five hundred thirty-two (7,532) square meter portion of Lot 115
covered by Original Certificate of Title (OCT) No. 0-627 registered under the name of Juan Cepeda, the
respondents' late father.
Sometime in 1965, upon the request of the then Mayor Justo Cesar Caronan, Cepeda allowed the
construction and operation of a school on the western portion of his property. The school is now known as Solana
North Central School, operating under the control and supervision of the petitioner DepEd.
Despite Cepeda's death in 1983, the herein respondents and other descendants of Cepeda continued to tolerate
the use and possession of the property by the school.
Sometime between October 31, 2000 and November 2, 2000, the respondents entered and occupied a portion
of the property. Upon discovery of the said occupation, the teachers of the school brought the matter to the
attention of the barangay captain. The school officials demanded the respondents to vacate the property.
However, the respondents refused to vacate the property, and asserted Cepeda's ownership of the lot.
On June 21, 2001, the DepEd filed a Complaint for Forcible Entry and Damages against respondents before
the Municipal Circuit Trial Court (MCTC) of Solana-Enrile. The MCTC ruled in favor of the petitioner and directed
respondents to vacate the premises. On appeal, the RTC affirmed the decision of the MCTC.
Thereafter, respondents demanded the petitioner to either pay rent, purchase the area occupied, or vacate
the premises. DepEd did not heed the demand and refused to recognize the ownership of the respondents over
the property.

On March 16, 2004, the respondents filed an action for Recovery of Possession and/or Sum of Money against
the DepEd. Respondents averred that since their late father did not have any immediate need of the land in 1965,
he consented to the building of the temporary structure and allowed the conduct of classes in the premises. They
claimed that they have been deprived of the use and the enjoyment of the portion of the land occupied by the school,
thus, they are entitled to just compensation and reasonable rent for the use of property.

In its Answer, the DepEd alleged that it owned the subject property because it was purchased by civic-minded
residents of Solana, Cagayan from Cepeda. It further alleged that contrary to respondents' claim that the occupation is
by mere tolerance, the property has always been occupied and used adversely, peacefully, continuously and in the
concept of owner for almost forty (40) years. It insisted that the respondents had lost whatever right they had over
the property through laches.
During the trial, respondents presented, inter alia, the OCT No. O-627 registered in the name of Juan Cepeda;
Tax Declarations also in his name and the tax receipts showing that they had been paying real property taxes on the
property since 1965. They also presented the Technical Description of the lot by the Department of Environment
and Natural Resources Land Management Services showing that the subject property was surveyed in the name
of Cepeda and a certification from the Municipal Trial Court of Solana, Cagayan declaring that Lot 115 was the subject
of Cad Case No. N-13 in LRC Cad. Record No. N-200 which was adjudicated to Cepeda.

On the other hand, despite notice and reset of hearing, the DepEd failed to present its evidence or witness to
substantiate its defense.

RTC Ruling
The RTC ruled in favor of the respondents, ordering the reconveyance of the portion of the subject property
occupied by the Solana North Central School, Solana, Cagayan. However, since restoration of possession of said
portion by the defendant Department of Education is no longer feasible or convenient because it is now used for
the school premises, the only relief available is for the government to pay due compensation which should have
[been] done years ago.

CA Ruling
The CA then affirmed the decision of the RTC in toto.

Issue
Whether or not recovery of possession of the subject property is barred by laches or prescription.

SC Ruling
Laches, in a general sense, is 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
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assert a right within a reasonable time, warranting a presumption that the party entitled to assert it either has abandoned
it or declined to assert it. The question of laches is addressed to the sound discretion of the court, and since laches is
an equitable doctrine, its application is controlled by equitable considerations. It cannot work to defeat justice or to
perpetrate fraud and injustice.
The following elements, as prescribed in the case of Go Chi Gun, et al. v. Co Cho, et al., must be present to
constitute laches: (1) conduct on the part of the defendant, or of one under whom he claims, giving rise to the situation
of which complaint is made for which the complaint seeks a remedy; (2) delay in asserting the complainant's rights,
the complainant having had knowledge or notice, of the defendant's conduct and having been afforded an
opportunity to institute a suit; (3) lack of knowledge or notice on the part of the defendant that the complainant
would assert the right on which he bases his suit; and (4) injury or prejudice to the defendant in the event relief is
accorded to the complainant, or the suit is not held to be barred.

On DepEds Claim of Ownership

The DepEd averred that it owned the subject property because the land was purchased by the civic-minded
residents of Solana. It further alleged that since it was the then Mayor who convinced Cepeda to allow the school to
occupy the property and use the same, it believed in good faith that the ownership of the property was already
transferred to it.
However, the DepEd did not present, in addition to the deed of sale, a duly-registered certificate of title in
proving the alleged transfer or sale of the property. Aside from its allegation, the DepEd did not adduce any
evidence to the transfer of ownership of the lot, or that Cepeda received any consideration for the purported sale.

On Respondents Claim of Ownership

On the other hand, to support their claim of ownership of the subject lot, respondents presented the following: (1)
the OCT No. 0-627 registered in the name of Juan Cepeda; (2) Tax Declarations in the name of Cepeda and the tax
receipts showing the payment of the real property taxes on the property since 1965; (3) Technical Description of the lot
by the Department of Environment and Natural Resources Land Management Services, surveyed in the name of
Cepeda; and (4) Certification from the Municipal Trial Court of Solana, Cagayan declaring that Lot 115 was
adjudicated to Cepeda.
After a scrutiny of the records, this Court finds that the above were sufficient to resolve the issue on who had
better right of possession. That being the case, it is the burden of the DepEd to prove otherwise. Unfortunately,
the DepEd failed to present any evidence to support its claim that the disputed land was indeed purchased by the
residents. By the DepEd's admission, it was the fact that the then Mayor of Solana, Cagayan convinced Cepeda
to allow the school to occupy the property for its school site that made it believe that the ownership of the
property was already transferred to it. We are not swayed by the DepEd's arguments. As against the DepEd's
unsubstantiated self-serving claim that it acquired the property by virtue of a sale, the Torrens title of respondents must
prevail.
It is undisputed that the subject property is covered by OCT No. O-627, registered in the name of the Juan Cepeda.
A fundamental principle in land registration under the Torrens system is that a certificate of title serves as
evidence of an indefeasible and incontrovertible title to the property in favor of the person whose name appears
therein. Thus, the certificate of title becomes the best proof of ownership of a parcel of land. (RSPol Note: This
case falls under Chapter VI of the syllabus on the Key Concepts of the Torrens System. Most likely, he will ask this
principle.)
As registered owners of the lots in question, the respondents have a right to eject any person illegally
occupying their property. This right is imprescriptible. Even if it be supposed that they were aware of the petitioner's
occupation of the property, and regardless of the length of that possession, the lawful owners have a right to demand
the return of their property at any time as long as the possession was unauthorized or merely tolerated, if at all. This
right is never barred by laches.

On Tolerance
In the case of Sarona, et al. v. Villegas, et al., this Court described what tolerated acts mean, in this language:
Professor Arturo M. Tolentino states that acts merely tolerated are "those which by reason of neighborliness or
familiarity, the owner of property allows his neighbor or another person to do on the property; they are generally
those particular services or benefits which one's property can give to another without material injury or prejudice to the
owner, who permits them out of friendship or courtesy." Tolentino continues, even though "this is continued for a
long time, no right will be acquired by prescription."
In this case, it was out of respect and courtesy to the then Mayor who was a distant relative that Cepeda
consented to the building of the school. The occupancy of the subject property by the DepEd to conduct classes therein

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arose from what Professor Arturo Tolentino refers to as the sense of "neighborliness or familiarity" of Cepeda to the
then Mayor that he allowed the said occupation and use of his property.
Professor Tolentino, as cited in the Sarona case, adds that tolerated acts are acts of little disturbances which a
person, in the interest of neighborliness or friendly relations, permits others to do on his property, such as passing over
the land, tying a horse therein, or getting some water from a well. In tolerated acts, the said permission of the owner for
the acts done in his property arises from an "impulse of sense of neighborliness or good familiarity with persons" or
out of "friendship or courtesy," and not out of duty or obligation. By virtue of tolerance that is considered as an
authorization, permission, or license, acts of possession are realized or performed.
Thus, in light of the DepEd' s admission that it was the then Mayor who convinced Cepeda to allow its use of his
property and in the absence of evidence that the same was indeed sold to it, the occupation and use as school site of
the subject lot by the DepEd upon Cepeda's permission is considered a tolerated act. Cepeda allowed the use of his
property out of his respect, courtesy and familiarity with the then Mayor who convinced him to allow the use of his
property as a school site.
Considering that the occupation of the subject lot is by mere tolerance or permission of the respondents, the
DepEd, without any contract between them, is bound by an implied promise that it will vacate the same upon
demand. Hence, until such demand to vacate was communicated by the respondents to the DepEd, respondents are not
required to do any act to recover the subject land, precisely because they knew of the nature of the DepEd's possession
which is by mere tolerance.
Therefore, respondents are not guilty of failure or neglect to assert a right within a reasonable time. The
nature of that possession by the DepEd has never changed from 1965 until the filing of the complaint for forcible entry
against the respondents on June 21, 2001. It was only then that the respondents had knowledge of the adverse claim of
the DepEd over the property. The respondents filed the action for recovery of possession on March 16, 2004 after
they lost their appeal in the forcible entry case and upon the continued refusal of the DepEd to pay rent,
purchase the lot or vacate the premises.
(RSPol Note: It will be remembered that on June 21, 2001, DepEd filed a case of Forcible Entry and Damages
against respondents, in which the respondents lost. Then, on March 16, 2004, the respondents filed a case of Recovery
of Possession and/or Sum of Money against the DepEd.)

On Laches
Lastly, the DepEd maintains that the respondents' inaction for more than 30 years reduced their right to
recover the subject property into a stale demand. It cited the case of Eduarte v. CA, Catholic Bishop of Balanga v.
CA, Mactan-Cebu International Airport Authority (MCIAA) v. Heirs of Marcelina L. Sero, et al. and DepEd Division of
Albay v. Oate to bolster its claim that a registered owner may lose his right to recover the possession of his
registered property by reason of laches. It alleged that the fact that the respondents possess the certificate of title of the
property is of no moment since a registered landowner, like the respondents, lost their right to recover the possession of
the registered property by reason of laches.
In the Eduarte case, the respondents therein knew of Eduarte's adverse possession of the subject lot as
evidenced by their Joint Affidavit dated March 18, 1959. In the case of Catholic Bishop of Balanga v. CA, the
petitioner, by its own admission, was aware of private respondent's occupation in the concept of owner of the lot
donated in its behalf to private respondent's predecessor-in-interest in 1936. The subject lot in the case of
Mactan-Cebu International Airport Authority was obtained through expropriation proceedings and registered in the
name of the petitioner. In the Oate case, no evidence was presented to show that the respondent or his
predecessor-in-interest protested against the adverse possession of the disputed lot by the Municipality of Daraga
and, subsequently, by the petitioner.
Unlike the cases cited by the DepEd, there was no solid evidentiary basis to establish that laches existed in the
instant case. The DepEd failed to substantiate its claim of possession in the concept of an owner from the time it
occupied the lot after Cepeda allowed it to use the same for a school site in 1965. The possession by the DepEd of
the subject lot was clearly by mere tolerance, since it was not proven that it laid an adverse claim over the
property by virtue of the purported sale.

On Builder of Good Faith

Moreover, the trial court ruled that the DepEd is a builder in good faith. To be deemed a builder in good
faith, it is essential that a person asserts title to the land on which he builds, i.e., that he be a possessor in the
concept of owner, and that he be unaware that there exists in his title or mode of acquisition any flaw which
invalidates it. However, there are cases where Article 448 of the Civil Code was applied beyond the recognized and
limited definition of good faith, e.g., cases wherein the builder has constructed improvements on the land of another
with the consent of the owner. The Court ruled therein that the structures were built in good faith in those cases that the
owners knew and approved of the construction of improvements on the property.
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 Despite being a possessor by mere tolerance, the DepEd is considered a builder in good faith, since Cepeda
permitted the construction of building and improvements to conduct classes on his property. Hence, Article 448
may be applied in the case at bar.
Article 448, in relation to Article 546 of the Civil Code, provides for the rights of respondents as landowners as
against the DepEd, a builder in good faith. The provisions respectively read: The owner of the land on which anything
has been built, sown or planted in good faith, shall have the right to appropriate as his own the works, sowing, or
planting, after payment of the indemnity provided for in Articles 546 and 548, or to oblige the one who built or
planted to pay the price of the land, and the one who sowed, the proper rent. However, the builder or planter cannot
be obliged to buy the land if its value is considerably more than that of the building or trees. In such case, he shall pay
reasonable rent, if the owner of the land does not choose to appropriate the building or trees after proper indemnity. The
parties shall agree upon the terms of the lease and in case of disagreement, the court shall fix the terms thereof.
Necessary expenses shall be refunded to every possessor; but only the possessor in good faith may retain the thing
until he has been reimbursed therefor.
In the case of Bernardo v. Bataclan, the Court explicated that Article 448 provides a just and equitable solution
to the impracticability of creating "forced co-ownership" by giving the owner of the land the option to acquire
the improvements after payment of the proper indemnity or to oblige the builder or planter to pay for the land
and the sower to pay the proper rent. The owner of the land is allowed to exercise the said options because his right
is older and because, by the principle of accession, he is entitled to the ownership of the accessory thing.
Thus, the two options available to the respondents as landowners are: (a) they may appropriate the
improvements, after payment of indemnity representing the value of the improvements introduced and the necessary
and useful expenses defrayed on the subject lots; or (b) they may oblige the DepEd to pay the price of the land.
However, it is also provided under Article 448 that the builder cannot be obliged to buy the land if its value is
considerably more than that of the improvements and buildings. If that is the case, the DepEd is not duty-bound to
pay the price of the land should the value of the same be considerably higher than the value of the improvement
introduced by the DepEd on the subject property. In which case, the law provides that the parties shall agree on
the terms of the lease and, in case of disagreement, the court shall fix the terms thereof.
Since the determination of the value of the subject property is factual in nature, this Court finds a need to
remand the case to the trial court to determine its value. In case the trial court determines that the value of the land is
considerably more than that of the buildings and improvements introduced, the DepEd may not be compelled to pay the
value of the land, instead it shall pay reasonable rent upon agreement by the parties of the terms of the lease. In the
event of a disagreement between the parties, the trial court shall fix the terms of lease.

On the Value of Just Compensation: Time of Taking or Current Market Value

Lastly, the RTC ruled that the basis of due compensation for the respondents should be the price or value of the
property at the time of the taking. In the case of Ballatan v. CA, the Court has settled that the time of taking is
determinative of just compensation in expropriation proceedings but not in a case where a landowner has been
deprived of the use of a portion of this land for years due to the encroachment of another.
In such instances, the case of Vda. de Roxas v. Our Lady's foundation, Inc. is instructive. The Court elucidated
therein that the computation of the value of the property should be fixed at the prevailing market value. The
reckoning period for valuing the property in case the landowner exercised his rights in accordance with Article 448
shall be at the time the landowner elected his choice. Therefore, the basis for the computation of the value of the
subject property in the instant case should be its present or current fair market value.

Calalang vs RD of Quezon
Facts
The subject of controversy in these two consolidated petitions is a parcel of land Lot 671-A of the Piedad
Estate located in Barrio Culiat, Diliman. The petitioners are individual lot owners who claim to have bought their
respective portions from Amando Clemente in the 1950's. Amando Clemente is alleged to be the registered owner of
said land evidenced by Transfer of Certificate Title No. 16212 covering about 81,160 square meters who converted it
into a subdivision known as Clemville Subdivision.
Lot 671-A is actually part of a bigger parcel known as Lot 671 which is claimed by respondent Iglesia ni
Kristo (INK), which bought said property from Lucia dela Cruz in 1975. Dela Cruz was adjudged the rightful owner
of Lot 671 in the case of dela Cruz v. dela Cruz. INK began fencing the whole area and placed the following sign
"NO TRESPASSING IGLESIA NI KRISTO PROPERTY SUPREME COURT CASE NO. 61969, July 25,
1984."
Briefly, the dela Cruz v. dela Cruz case is an action for reconveyance founded on breach of trust filed by
Augustina dela Cruz, et al. against Lucia dela Cruz and INK. Augustina and her co-plaintiffs charged that the parcel of
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land purchased by the INK from Lucia dela Cruz was actually a part of their inheritance share in the estate of their late
grandfather, Policarpio dela Cruz but which, in breach of trust known to the INK, Lucia sold to the latter. Augustina's
suit was originally decided in her favor by the trial court. On appeal to the Court of Appeals, the judgment was reversed
and the questioned sale by Lucia dela Cruz to the INK was upheld. Consequently, Augustina went to the Supreme
Court on a petition for review on certiorari. On July 25, 1984, the Court rendered a decision in affirming the decision of
the Court of Appeals. The validity of the sale of Lucia to the INK was thereby upheld and the title of INK to the
subject realty (Lot 671) was validated as well.

This Supreme Court decision spawned the two (2) petitions now before us assailing the validity of Lucia dela
Cruz's title over Lot 671 which in turn was sold to INK.

G.R. No. 76265 (Calalang)

In G.R. No. 76265, petitioner Virginia Calalang alleged that she is the registered owner of a portion of Lot
671-A (subdivision plan PSD 32221) as evidenced by TCT Nos. 17556, 17564 and 17562. She allegedly came to
know of INK'S claim only when a prospective buyer inspected the land on August 1986 and saw the "no
trespassing" sign. Petitioner Calalang lost no time in inquiring into the status of the land and learned about the
pending consulta case (LRC 1978) filed before the Administrator of the National Land Titles and Deeds Registration
Administration (NLTDRA). This consulta came about when the Register of Deeds doubted the registrability of the
documents presented before it in the light of his findings that the land affected was covered by two (2) sets of
titles issued in the names of different owners. On September 9, 1986, the petitioner filed a Motion to Intervene
requesting the Administrator to conduct an investigation of the supposed anomaly committed in connection with the
reconstitution of TCT No. RT-58 in the name of Lucia dela Cruz. This was denied by the Administrator invoking our
ruling in dela Cruz v. dela Cruz to the effect that TCT RT-58 in the name of respondent Lucia dela Cruz is the valid title.
Consequently, a Motion for Reconsideration was filed by herein petitioner but this was likewise denied by the
Administrator on October 20, 1986 on the ground that the issues raised therein have already been passed upon and that
the issues being litigious in nature cannot be decided in a consulta case "where the only question to be determined is the
registrability of the document presented for registration."
Hence, on October 27, 1986, the petitioner filed the instant Special Civil Action for Certiorari and
Prohibition in G.R. No. 76265 against the Administrator of the NLTDRA, the Register of Deeds of Quezon City
and private respondents Lucia dela Cruz, Constancio Simangan and Iglesia ni Kristo. Lucia dela Cruz and
Constancio Simangan were impleaded as they were predecessors-in-interest of INK.
INK and the Administrator filed their comments on January 5, 1987 and June 29, 1987 respectively. For failure to
locate Constancio Simangan's whereabouts despite diligent efforts and considering further that INK is the indispensable
party and the one interested in upholding the validity of the reconstituted title of respondent Lucia dela Cruz, the
petitioner moved to drop him as respondent. This was granted by the Court in a resolution dated April 13, 1988.
Taking the cue from the Administrator that present certificates of title must be cancelled to avoid
duplication, the Register of Deeds, instead of filing its comment initiated cancellation proceedings of more than
100 titles, against 81 defendants which included herein petitioner on the basis of this Court's declaration in the
case of dela Cruz that the reconstituted title of respondent Lucia dela Cruz is the valid title. This petition was
filed by the Office of the Solicitor-General (OSG) on January 5, 1987 with the Regional Trial Court of Quezon City.
Consequently, the petitioner moved to dismiss on the ground that the complaint was premature and maliciously
filed with knowledge of the instant petition with this Court. INK, on the other hand, filed a Motion to Intervene in said
case. Claiming ownership over Lot 671, it prayed for damages against some of the defendants namely Augusto de Leon,
Jose M. Panlilio and Felicidad Vda. de Pineda who filed an injunction suit against it (Civil Case No. Q-45767) with the
Regional Trial Court (RTC) of Quezon City on September 12, 1985.
Despite opposition of the petitioner to respondent INK's Motion to Intervene, presiding Judge Benigno T. Dayaw
granted the motion of INK and denied petitioner's Motion to Dismiss on the ground that the issues raised in the instant
petition (G. R. No. 76265) will not substantially affect said civil case. The subsequent motion for reconsideration filed
by the petitioner was likewise denied considering that no restraining order has been issued.
However, instead of filing an answer to the complaint in Civil Case No. Q-49900, the petitioners filed on July 15,
1988 a supplemental petition before this Court to include as additional respondent, the Honorable Judge Benigno T.
Dayaw and petitioner's children who were named as defendants in said Civil Case, as additional petitioners. At the
same time the petitioner prayed for a restraining order.
To this supplemental petition, the OSG in behalf of the Republic filed its comment pursuant to the Court's
resolution granting the petitioner's motion for leave to include additional parties and to admit supplemental
petition. In the meantime, fire gutted the records of the Register of Deeds in Quezon City, so respondent Judge
required the parties to agree to a stipulation of facts instead of trial.

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G.R. No. 83280 (De Leon, De Castro, Panlilio, etc)
In G.R. No. 83280, the petitioners alleged that they and/or their predecessors in interest were issued their
corresponding titles to the lots purchased from Amando Clemente in the 1950's yet.
They alleged that they took physical possession of their lots in Clemville Subdivision by actually occupying
the same, declaring them in their names for tax purposes, fencing or marking them off and entrusting their care
to "katiwalas". From the time they acquired their Torrens Title they and they alone to the exclusion of INK exercised
all acts of undisturbed, peaceful and uninterrupted ownership and possession including the payment of their realty taxes.
On or about the second week of August, 1985, INK started to enclose the entire Clemville Subdivision with
"sawali" fences with billboards randomly posted.
INK also destroyed the concrete/hollow block fence surrounding the lot of petitioner de Castro and started
the construction of housing structures therein. At the same time, it commenced the delivery of construction
materials to the former premises of petitioner Panlilio to erect a permanent structures of strong materials on it. Thus, on
August 22, 1985, the petitioners filed with the RTC-Branch 101 a petition for injunction with damages. Later, this
petition was amended to include Elena Ostrea and Feliza C. Cristobal-Generoso as additional petitioners.
August 25, 1985, presiding Judge Santiago issued a restraining order and set the case for hearing the writ for
preliminary injunction on September 5, 1985. The September 5 hearing was however, reset to September 19, 1985
with respondent Erao Manalo volunteering to maintain the status quo until then or until the matter had been
resolved by the trial court. On September 19, by agreement of the parties and in open court, the Judge issued an order,
granting the parties' motion to enter into a stipulation of facts instead of going on with the hearing and to maintain
the status quo.

In the course of the exchange of pleadings between the parties, the trial judge issued an Order on December 6,
1985 denying the petitioners' prayer for the issuance of a writ of preliminary injunction.
The CA reversed the RTC ruling and ordered that the application for preliminary injunctive relief therein be
properly heard and evidence for or against the same be adduced in due course.

The Case before SC

Although other minor issues are involved in these consolidated cases, the principal and crucial issue that alone
needs to be resolved is the applicability of this Court's decision in the dela Cruz case to these cases now before us.

The petitioners argue that the dela Cruz case could not be applied to them since they were not parties in that
case nor were they ever notified of such case pending between the parties. The petitioners explained that the de la
Cruz case was a case among the heirs of Policarpio de la Cruz. Since they acquired their properties from an entirely
different person, Amando Clemente and not from any of the heirs of Policarpio de la Cruz, they could not be
considered privies to any of them.
In denying applicability, however, the petitioners assail the Court's ruling that "the reconstituted title of
Lucia dela Cruz over Lot 671 (TCT No. RT 58) was valid. As the registered and rightful owner, Lucia dela Cruz had
the perfect and legal right to sell, assign, and convert the property to respondent INK who as purchaser for value in
good faith holds the same free from all encumbrances except those noted in said certificate."

SC Ruling
On the Applicability of dela Cruz Case
With this Court's ruling promulgated in 1984, it is our considered view that the petitioner can not raise anew
the question of ownership of Lucia dela Cruz over Lot 671 which had been determined by the Court of Appeals
and affirmed by the Supreme Court in the dela Cruz case. Well-settled is the rule enunciated in Church Assistance
Program, Inc. v. Sibulo that: When a right or fact has been judicially tried and determined by a court of competent
jurisdiction, so long as it remains unreversed, it should be conclusive upon the parties and those in privity with them
in law or estate.
The Court's ruling has long been final and the issue on ownership of Lot 671 finally disposed of several years ago.
This declaration must be respected and followed in the instant case applying the principle of res judicata or,
otherwise, the rule on conclusiveness of judgment. The less familiar concept or less terminological usage of res
judicata as a rule on conclusiveness of judgment refers to the situation where the judgment in the prior action operates
as an estoppel only as to the matters actually determined therein or which were necessarily included therein (De la
Cruz v. Court of Appeals).
Inevitably, the dela Cruz ruling should be applied to the present petitions since the facts on which such
decision was predicated continue to be the facts of the case before us now (See Rivas v. SEC). Even the petitioners
substantially adopt the same findings of facts in their pleadings. The factual inquiry with regards to the history of Lot
671 has already been laid to rest and may no longer be disturbed.
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 In the dela Cruz case, the undisputed facts did not mention of Amando Clemente. A closer perusal of the
records in G. R. 76265 would, however, reveal that TCT No. 16212 was issued for Lot 671-A in the name of
Amando Clemente on August 9, 1951 per report of the Acting Administrator of the NLTDRA. Amando
Clemente's TCT No. 16212 emanated from TCT No. 40355 in the name of Eugenia de la Paz and Dorotea dela
Cruz. Thus, Amando Clemente's predecessors-in-interest are Eugenia dela Paz and Dorotea dela Cruz whom the
Court found to have lost their rights over Lot 671 by virtue of the sale made to Lucia dela Cruz.
(RSPol Note: Petitioners in this case claim that they acquired their properties from Amando Clemente. This was
their basis on claiming ownership over the subject land. In the records of GR 76265, the SC found that Amando
Clemente's title came from TCT 40355 which was in the name of Eugenia de la Paz and Dorotea dela Cruz. However,
in the dela Cruz case, the SC found that Eugenia dela Paz and Dorotea dela Cruz have lost their rights over Lot 671 by
virtue of the sale made to Lucia dela Cruz in 1943, which lot was subsequently sold to INK.)

The Register of Deeds correctly observed that this is a clear case where there is a duplication or overlapping
of titles issued to different names over the same land which thereby compelled him to file the consulta case with
the NLTDRA:
(1) Lucia dela Cruz's reconstituted title (RT-58) which was divided into 3 Lots, Lot 671-A, Lot 671-B and Lot
671-C and was subsequently sold to INK;
(2) Eugenia dela Paz and Dorotea dela Cruz's reconstituted title (RT-52) which was divided into 2 lots, Lot
671-A and Lot 671-B.

(RSPol Note: Petitioners claim ownership over Lot 671-A which is now enclosed by INK by virtue of its valid
sale of Lot 671 which necessarily includes Lot 671-A from Lucia dela Cruz, who acquired same lot from Eugenia dela
Paz and Dorotea dela Cruz who appeared to be the same predecessors-in-interest of Amando Clemente who
subsequently sold Lot 671-A to the petitioners in this case. Now, per dela Cruz case, the undisputed facts reveal that
only the sale in 1943 to Lucia dela Cruz was valid, without any mention of any alleged sale to Amando Celemente in
1951, the SC in this case ruled to the effect that petitioners claim is already barred by res judicata or the rule on
conclusiveness of judgment. In other words, because the SC already ruled that the sale to and title of Lucia dela Cruz
are valid, Lucias sale to the INK is valid as well. Because Amando had no valid title over the lot, he cannot transmit
any right nor transfer any title or interest over the land conveyed to the petitioners. Hence, the INK at present has the
valid title over Lot 671 including Lot 671-A, not the petitioners.)

Notwithstanding, in the dela Cruz case, it is undisputed that Lot 671 was sold to Lucia dela Cruz by Eugenia
dela Paz and Dorotea dela Cruz as evidenced by Entry No. 258, page 7, Vol. 7, Primary Entry Book of the
Registry of Deeds of Manila. This is a finding which can not be disturbed.
We need not emphasize the fact that the Supreme Court by tradition and in our system of judicial administration,
has the last word on what the law is. It is the final arbiter of any justiciable controversy. There is only one Supreme
Court from whose decisions all other courts should take their bearings. Consequently, we cannot and should not
review a case already passed upon by the Highest Tribunal. It is only proper to allow the case to take its rest.
(Church assistance Program, Inc. v. Sibulo).
The sale of the land to Lucia dela Cruz and the subsequent registration thereof in the Primary Book of the
Registry of Deeds, Manila constitutes constructive notice to the whole world. (Heirs of Maria Marasigan v.
Intermediate Appellate Court; People v. Reyes)
It is the act of registration which transfers ownership of the land sold (Government Service Insurance System v.
Court of Appeals). Lot 671 was already owned by Lucia dela Cruz as early as 1943. Amando Clemente's alleged title
meanwhile which was issued on August 9, 1951 was very much later. Thus, the petitioners, who merely stepped into
the shoes of Amando Clemente cannot claim a better right over said land. "Prior est temporae, prior est in jura"
(he who is first in time is preferred in right) (Garcia v. Court of Appeals). The fact that Amando Clemente possessed
a certificate of title does not necessarily make him the true owner. And not being the owner, he cannot transmit any
right to nor transfer any title or interest over the land conveyed (Beaterio del Santisimo Rosario de Molo v. Court of
Appeals; Treasurer of the Phil. v. Court of Appeals).
In our capacity as the court of last resort, the petitioners try to convince us to look or inquire into the validity of
the reconstitution proceedings initiated by Lucia dela Cruz, contending that the implementation of de la Cruz ruling
would deprive them of their properties without due process of law. We have looked long and hard into the records of
the case but the facts and circumstances plus law and jurisprudence on the matter do not warrant such action
from the Court. INK's title over Lot 671 which necessarily included Lot 671-A had already become
incontrovertible and indefeasible. To reopen or to question the legality of INK's title would defeat the purpose of our
Torrens system which seeks to insure stability by quieting titled lands and putting to a stop forever any question

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of the legality of the registration in the certificate or questions which may arise therefrom. In fairness to INK, as
registered owner it is entitled to rest secure in its land title.
(RSPol Note: Statements colored red are related to the Key Concepts of the Torrens System under Chapter VI.)

Reyes vs Raval-Reyes
Facts
Three brothers, Mateo H., Juan H., and Francisco H., all surnamed Reyes, are the registered owners of
several parcels of land, to wit; Lots Nos. 15891, 15896, 15902 and 15912, of the Laoag (Ilocos Norte) Cadastre,
embraced in and covered by Original Certificate of Title No. 22161, and also Lots Nos. 20481 and 20484, of the same
cadastral survey, embraced in and covered by Original Certificate of Title No. 8066, both of the Registry of Deeds of
Ilocos Norte. These titles were issued pursuant to a decree of registration, dated 31 May 1940.
On 17 July 1962, petitioners Mateo H. Reyes and Juan H. Reyes filed, in the above stated cadastral cases, a
motion for issuance of writs of possession over all the lots covered by both Certificates of Title above referred to.
Respondent Mateo Raval Reyes opposed the motion, admitting that he is only in possession of the lots
covered by Original Certificate of Title No. 22161, but denying that he possesses the lots covered by Original
Certificate of Title No. 8066; however, he claimed that he has been in, and is entitled to, the possession thereof (i.e.,
Lots Nos. 20481 and 20484), having acquired by way of absolute sale (not recorded) from petitioners' brother,
Francisco H. Reyes, the latter's undivided one-third (1/3) share, interest and participation to these disputed lots.
After due hearing of this appellant, the court a quo issued, on 20 December 1962, the writ of possession with
respect to Lot Nos. 15891 and 15896, which writ was, upon petitioners' motion for reconsideration, amended, on 7
January 1963, to include all the other lots covered by both titles. Respondent did not appeal from this order amending
the writ of possession.
Subsequently, petitioners in the above cadastral cases, as plaintiffs, commenced, on 15 January 1963, before the
same court of first instance, an ordinary civil action seeking to recover the products of the disputed lots, or their
value, and moral damages against respondent Mateo Raval Reyes, as defendant. This case was docketed as its Civil
Case No. 3659.
Defendant therein (now respondent M. Raval Reyes) answered the complaint and pleaded a counterclaim for
partition of all the disputed lots, alleging the same ground he had heretofore raised in his answer and/or opposition to
the motion for issuance of writ of possession, i.e., he is their (plaintiffs') co-owner, he having bought from
plaintiffs' brother, Francisco H. Reyes, the latter's undivided one-third (1/3) share, interest and participation to
these disputed lots.
Pending trial on this ordinary civil case (No. 3659), petitioners presented, on 25 February 1963, in the
cadastral cases aforementioned, a motion to compel respondent Mateo Raval Reyes to surrender and deliver to
them the owners' duplicates of Original Certificates of Title Nos. 22161 and 8066. Respondent opposed this
motion.
The court a quo denied petitioners' motion, on the ground that the parcels of land covered by both titles are
subjects of litigation in Civil Case No. 3659 and the same has not yet been decided on the merits by it. Petitioners
subjected the foregoing order to a motion for reconsideration, but without success; hence, the present appeal.
(RSPol Note: When the petitioners filed a motion to compel Raval Reyes to surrender OCT 22161 and 8066, the
civil case on action seeking to recover products over the same lot was not yet decided on merits.)

The Case before the SC

Petitioners-appellants dispute the above ruling of the trial court contending that, since the subject matter of
Civil Case No. 3659 are not the lots covered by the titles in question but their products or value, and moral
damages, these lots are not in litigation in this ordinary civil case; and that since respondent had already raised the
issue of ownership and possession of these lots in his opposition to the (petitioners') motion for issuance of writ of
possession and, despite this opposition, the court a quo granted the writ, without any appeal being taken, respondent is
barred and estopped from raising the same issue in the ordinary civil case, under the principle of res judicata.
(RSPol Note: Petitioners basis of res judicata was the issuance by the trial court on Dec 20, 1962 when
respondent did not appeal the motion for reconsideration filed by the petitioners in the motion for writ of possession
against the respondent with respect to Lot Nos. 15891 and 15896, and all the other lots covered by both OCT 22161
and 8066.)

On the other hand, respondent-appellee maintains that, having pleaded a counterclaim for partition of the lots
in question in said Civil Case No. 3659, the trial court correctly held that these lots are subjects of litigation in
this ordinary civil case. He also maintains that petitioners not having impleaded their brother, Francisco H. Reyes, or
his heirs, as parties in their motion for issuance of writ of execution, and because these heirs have not intervened in this
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particular incident, the writ of possession issued by the trial court is, at most, valid only with respect to their
(petitioners) undivided two-thirds (2/3) share and participation in these disputed lots; hence, he concludes that he
is not barred and estopped from raising the issue of ownership and possession of the undivided one-third (1/3) share
and participation of petitioners' brother, Francisco H. Reyes, which share respondent allegedly bought from the latter.

In their reply brief, petitioners-appellants refute the latter argument of respondent-appellee by showing that they
had previously obtained special authority from the heirs of their deceased brother to represent them in the
proceedings had in the court below.

Issue
Who between petitioners-appellants or respondent-appellee has a better right to the possession or custody of the
disputed owners' duplicates of certificates of title.

SC Ruling
While we agree with the court a quo that the disputed lots are subjects of litigation in Civil Case No. 3659, it
appearing that respondent, as defendant therein, had presented a counterclaim for partition of the lots covered by the
titles, we see no valid and plausible reason to justify, on this ground, the withholding from the registered owners,
such as the petitioners-appellants herein, the custody and possession of the owners' duplicates of certificates of
title. In a decided case, this Court has already held that the owner of the land in whose favor and in whose name
said land is registered and inscribed in the certificate of title has a more preferential right to the possession of
the owners' duplicate than one whose name does not appear in the certificate and has yet to establish his right to
the possession thereto.
It being undisputed that respondent had already availed of an independent civil action to recover his
alleged co-owner's share in the disputed lots by filing a counterclaim for partition in said Civil Case No. 3659,
his rights appear to be amply protected; and considering that he may also avail of, to better protect his rights thereto,
the provision on notice of lis pendens under Section 24, Rule 14, of the Revised Rules of Court, for the purpose of
recording the fact that the lots covered by the titles in question are litigated in said Civil Case No. 3659, we again see
no justifiable reason for respondent to retain the custody of the owners' duplicates of certificates of titles.
(RSPol Note: Respondent cannot withhold the duplicate copies of OCT 22161 and 8066 because his rights are
already protected as regards his interest in the 1/3 share of the undivided land in his independent civil action for the
partition of the same. Respondent is under the impression that he is entitled to withhold the duplicate copies of OCT
22161 and 8066 because of his 1/3 share based on the absolute sale between him and Francisco, a co-owner of the
petitioners. For now, because the titles of the land are in the name of the petitioners, they have the right to the custody
and possession of said titles.)
Respondent Mateo Raval Reyes is hereby ordered to deliver to petitioners the owners' duplicates of Original
Certificates of Title No. 22161 and 8066.

Sps Abrigo vs De Vera

Facts
On May 27, 1993, Gloria Villafania sold a house and lot located at Banaoang, Mangaldan, Pangasinan and
covered by Tax Declaration No. 1406 to Rosenda Tigno-Salazar and Rosita Cave-Go. The said sale became a
subject of a suit for annulment of documents between the vendor and the vendees.
On December 7, 1993, the Regional Trial Court, Branch 40 of Dagupan City rendered judgment approving
the Compromise Agreement submitted by the parties. In the said Decision, Gloria Villafania was given one year
from the date of the Compromise Agreement to buy back the house and lot, and failure to do so would mean that the
previous sale in favor of Rosenda Tigno-Salazar and Rosita Cave-Go shall remain valid and binding and the plaintiff
shall voluntarily vacate the premises without need of any demand. Gloria Villafania failed to buy back the house and
lot, so the vendees declared the lot in their name.
Unknown, however to Rosenda Tigno-Salazar and Rosita Cave-Go, Gloria Villafania obtained a free patent
over the parcel of land involved [on March 15, 1988 as evidenced by OCT No. P-30522]. The said free patent was
later on cancelled by TCT No. 212598 on April 11, 1996.
On October 16, 1997, Rosenda Tigno-Salazar and Rosita Cave-Go, sold the house and lot to the herein
Petitioner-Spouses Noel and Julie Abrigo.
On October 23, 1997, Gloria Villafania sold the same house and lot to Romana de Vera. Romana de Vera
registered the sale and as a consequence, TCT No. 22515 was issued in her name.
(RSPol Note: On May 27, 1993 Villafania sold the house and lot to Salazar and Go who sold the same to
petitioner Sps Abrigo on Oct. 16, 1997 after Villafinia failed to redeem the property. However, 7 days later or on
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October 23, 1997 Villafinia, despite her previous sale to Salazar and Go and failure of redemption, sold the same
property to respondent de Vera.)
On November 12, 1997, Romana de Vera (respondent) filed an action for Forcible Entry and Damages
against Spouses Noel and Julie Abrigo (petitioner) before the Municipal Trial Court of Mangaldan, Pangasinan
docketed as Civil Case No. 1452. On February 25, 1998, the parties therein submitted a Motion for Dismissal in
view of their agreement in the instant case that neither of them can physically take possession of the property in
question until the instant case is terminated. Hence the ejectment case was dismissed.

RTC Ruling
Thus, on November 21, 1997, petitioners filed the instant case with the Regional Trial Court of Dagupan
City for the annulment of documents, injunction, preliminary injunction, restraining order and damages against
respondent and Gloria Villafania.
After the trial on the merits, the lower court rendered the assailed Decision dated January 4, 1999, awarding
the properties to petitioners as well as damages. Moreover, Gloria Villafania was ordered to pay petitioners and
private respondent damages and attorneys fees. Not contented with the assailed Decision, both parties appealed to
the CA.

CA Ruling
In its original Decision promulgated on November 19, 2001, the CA held that a void title could not give rise to a
valid one and hence dismissed the appeal of Private Respondent Romana de Vera. Since Gloria Villafania had already
transferred ownership to Rosenda Tigno-Salazar and Rosita Cave-Go, the subsequent sale to De Vera was deemed
void.

SC Ruling
On Better Right
Petitioners contend that Gloria Villafania could not have transferred the property to Respondent De Vera because
it no longer belonged to her. They further claim that the sale could not be validated, since respondent was not a
purchaser in good faith and for value.
Law on Double Sale
The present case involves what in legal contemplation was a double sale. On May 27, 1993, Gloria Villafania
first sold the disputed property to Rosenda Tigno-Salazar and Rosita Cave-Go, from whom petitioners, in turn,
derived their right. Subsequently, on October 23, 1997, a second sale was executed by Villafania with Respondent
Romana de Vera.
Article 1544 of the Civil Code states the law on double sale thus:
"If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who
may have first taken possession thereof in good faith, if it should be movable property.
"Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first
recorded it in the Registry of Property.
"Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the
possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good faith."

Otherwise stated, the law provides that a double sale of immovables transfers ownership to (1) the first registrant
in good faith; (2) then, the first possessor in good faith; and (3) finally, the buyer who in good faith presents the
oldest title. There is no ambiguity in the application of this law with respect to lands registered under the Torrens
system.
This principle is in full accord with Section 51 of PD 1529 (Property Registration Decree) which provides that
no deed, mortgage, lease or other voluntary instrument -- except a will -- purporting to convey or affect
registered land shall take effect as a conveyance or bind the land until its registration. Thus, if the sale is not
registered, it is binding only between the seller and the buyer but it does not affect innocent third persons.
In the instant case, both Petitioners Abrigo and respondent registered the sale of the property. Since neither
petitioners nor their predecessors (Tigno-Salazar and Cave-Go) knew that the property was covered by the Torrens
system, they registered their respective sales under Act 3344. For her part, respondent registered the transaction under
the Torrens system because, during the sale, Villafania had presented the transfer certificate of title (TCT) covering the
property.
Respondent De Vera contends that her registration under the Torrens system should prevail over that of
petitioners who recorded theirs under Act 3344 (Land Registration). De Vera relies on the following insight of
Justice Edgardo L. Paras: "x x x If the land is registered under the Land Registration Act [or Act 496] (and has therefore

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a Torrens Title), and it is sold but the subsequent sale is registered not under the Land Registration Act but under Act
3344, as amended, such sale is not considered REGISTERED, as the term is used under Art. 1544 x x x."
(RSPol Note: The registration under the Torrens system is an operative act to convey ownership, while registration
under Act 3344 will yield to a party with a better right because registration under Act 3344 is only a temporary
protection of the rights of the parties until the land is brought into the operation of the Torrens system per Sec 3 of said
Act.)
We agree with respondent. It is undisputed that Villafania had been issued a free patent registered as Original
Certificate of Title (OCT) No. P-30522. The OCT was later cancelled by Transfer Certificate of Title (TCT) No.
212598, also in Villafanias name. As a consequence of the sale, TCT No. 212598 was subsequently cancelled and
TCT No. 22515 thereafter issued to respondent.
Soriano v. Heirs of Magali held that registration must be done in the proper registry in order to bind the land.
Since the property in dispute in the present case was already registered under the Torrens system, petitioners
registration of the sale under Act 3344 was not effective for purposes of Article 1544 of the Civil Code.
More recently, in Naawan Community Rural Bank v. Court of Appeals, the Court upheld the right of a party who
had registered the sale of land under the Property Registration Decree (PD 1529), as opposed to another who had
registered a deed of final conveyance under Act 3344 (Land Registration). In that case, the "priority in time" principle
was not applied, because the land was already covered by the Torrens system at the time the conveyance was registered
under Act 3344. For the same reason, inasmuch as the registration of the sale to Respondent De Vera under the
Torrens system was done in good faith, this sale must be upheld over the sale registered under Act 3344 to
Petitioner-Spouses Abrigo.
Radiowealth Finance Co. v. Palileo explained the difference in the rules of registration under Act 3344 and those
under the Torrens system in this wise:
"Under Act No. 3344, registration of instruments affecting unregistered lands is without
prejudice to a third party with a better right. The aforequoted phrase has been held by this Court
to mean that the mere registration of a sale in ones favor does not give him any right over the land if
the vendor was not anymore the owner of the land having previously sold the same to somebody else
even if the earlier sale was unrecorded.
"The case of Carumba vs. Court of Appeals is a case in point. It was held therein that Article 1544 of
the Civil Code has no application to land not registered under Act No. 496 (or the Land
Registration Act). Like in the case at bar, Carumba dealt with a double sale of the same unregistered
land. The first sale was made by the original owners and was unrecorded while the second was an
execution sale that resulted from a complaint for a sum of money filed against the said original
owners. Applying [Section 33], Rule 39 of the Revised Rules of Court, this Court held that Article
1544 of the Civil Code cannot be invoked to benefit the purchaser at the execution sale though the
latter was a buyer in good faith and even if this second sale was registered. It was explained that this
is because the purchaser of unregistered land at a sheriffs execution sale only steps into the shoes of
the judgment debtor, and merely acquires the latters interest in the property sold as of the time the
property was levied upon.
"Applying this principle, x x x the execution sale of unregistered land in favor of petitioner is of no
effect because the land no longer belonged to the judgment debtor as of the time of the said execution
sale."

Petitioners cannot validly argue that they were fraudulently misled into believing that the property was
unregistered. A Torrens title, once registered, serves as a notice to the whole world. All persons must take notice,
and no one can plead ignorance of the registration.
(RSPol Note: The free patent title OCT No. P-30522 in the name of Villafania was cancelled and registered under
the Torrens system with TCT No. 212598 on April 11, 1996 still in the name of Villafania. Since the Torrens title is a
notice to the whole world, Sps Abrigo are deemed to have knowledge of the title in Villafanias name and not in Salazar
and Gos names when the sale between the petitioners and Salazar-Go occured on October 16, 1997. The land having
been registered under Torrens system in her name, Villafania on October 23, 1997 sold the same house and lot to
respondent de Vera who then registered the sale and as a consequence, TCT No. 22515 under the Torrens system was
issued in her name. Although Sps Abrigo registered the land, such was made under Act 3344, which registration was
deemed not proper because only unregistered lands can be registered under Act 3344. Act 3344 is not proper when the
land is already registered under the Torrens system. It is noted that the subject land prior to the sale to Sps Abrigo on
Oct 16, 1997 was already registered under the Torrens system on Apr 11,1996. Hence, Sps Abrigos registration under
ACT 3344 is not considered registration under the law. On the other hand, De de Veras registration under the Torrens
system was the correct registration. Under Art 1544 on double sale, since de Vera was the first to register, she has the
better right over the subject land.)
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On Good Faith
We have consistently held that Article 1544 requires the second buyer to acquire the immovable in good faith and
to register it in good faith. Mere registration of title is not enough; good faith must concur with the registration. We
explained the rationale in Uraca v. Court of Appeals, which we quote: This is the price exacted by Article 1544 of the
Civil Code for the second buyer being able to displace the first buyer; that before the second buyer can obtain priority
over the first, he must show that he acted in good faith throughout (i.e. in ignorance of the first sale and of the first
buyers rights) ---- from the time of acquisition until the title is transferred to him by registration, or failing
registration, by delivery of possession.
Equally important, under Section 44 of PD 1529, every registered owner receiving a certificate of title pursuant to
a decree of registration, and every subsequent purchaser of registered land taking such certificate for value and in good
faith shall hold the same free from all encumbrances, except those noted and enumerated in the certificate. Thus, a
person dealing with registered land is not required to go behind the registry to determine the condition of the
property, since such condition is noted on the face of the register or certificate of title. Following this principle,
this Court has consistently held as regards registered land that a purchaser in good faith acquires a good title as
against all the transferees thereof whose rights are not recorded in the Registry of Deeds at the time of the sale.
Citing Santiago v. Court of Appeals, petitioners contend that their prior registration under Act 3344 is constructive
notice to respondent and negates her good faith at the time she registered the sale. Santiago affirmed the following
commentary of Justice Jose C. Vitug:
"The governing principle is prius tempore, potior jure (first in time, stronger in right). Knowledge by the first
buyer of the second sale cannot defeat the first buyer's rights except when the second buyer first registers in
good faith the second sale (Olivares vs. Gonzales). Conversely, knowledge gained by the second buyer of the first sale
defeats his rights even if he is first to register, since such knowledge taints his registration with bad faith. In Cruz vs.
Cabana, it was held that it is essential, to merit the protection of Art. 1544, second paragraph, that the second realty
buyer must act in good faith in registering his deed of sale.
Santiago was subsequently applied in Bayoca v. Nogales, which held:
"Verily, there is absence of prior registration in good faith by petitioners of the second sale in their favor. As stated
in the Santiago case, registration by the first buyer under Act No. 3344 can have the effect of constructive notice to the
second buyer that can defeat his right as such buyer. On account of the undisputed fact of registration under Act No.
3344 by [the first buyers], necessarily, there is absent good faith in the registration of the sale by the [second buyers]
for which they had been issued certificates of title in their names."

Santiago and Bayoca are not in point. In Santiago, the first buyers registered the sale under the Torrens system,
as can be inferred from the issuance of the TCT in their names. There was no registration under Act 3344. In
Bayoca, when the first buyer registered the sale under Act 3344, the property was still unregistered land. Such
registration was therefore considered effectual.
(RSPol Note: The above cases do not apply to the petitioners because unlike in Santiago where the first buyers
registered under the Torrens system, Sps Abrigo registered under Act 3344. Also, unlike in Bayoca where the first buyer
registered under Act 3344 because the property was unregistered at the time of sale, the Sps Abrigo registered under
Act 3344 despite the fact that the land was already registered under Torrens System. Note that registration under Act
3344 is only applicable if the land is not yet registered under the Torrens system. Registration under Act 3344 of a
registered land under the Torrens system is not proper, which happened in the case of Sps Abrigo. Even if Sps Abrigo
registered ahead of de Vera, their registration under Act 3344 cannot be a constructive notice to de Vera who, although
later, properly registered under the Torrens system, now PD 1529.)

Furthermore, Revilla and Taguba, which are cited in Santiago, are not on all fours with the present case. In Revilla,
the first buyer did not register the sale. In Taguba, registration was not an issue.

As can be gathered from the foregoing, constructive notice to the second buyer through registration under Act
3344 does not apply if the property is registered under the Torrens system, as in this case.

We quote below the additional commentary of Justice Vitug, which was omitted in Santiago. This omission was
evidently the reason why petitioner misunderstood the context of the citation therein: The registration contemplated
under Art. 1544 has been held to refer to registration under Act 496 Land Registration Act (now PD 1529) [the
Torrens system] which considers the act of registration as the operative act that binds the land. On lands covered by the
Torrens System, the purchaser acquires such rights and interest as they appear in the certificate of title, unaffected by
any prior lien or encumbrance not noted therein. The purchaser is not required to explore farther than what the

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Torrens title, upon its face, indicates. The only exception is where the purchaser has actual knowledge of a flaw
or defect in the title of the seller or of such liens or encumbrances which, as to him, is equivalent to registration.

On Respondent in Good Faith

The Court of Appeals examined the facts to determine whether respondent was an innocent purchaser for value.
After its factual findings, it was revealed that Respondent De Vera was in good faith, it explained thus:

"Gloria Villafania, [Respondent] De Veras vendor, appears to be the registered owner. The subject land was, and
still is, registered in the name of Gloria Villafania. There is nothing in her certificate of title and in the
circumstances of the transaction or sale which warrant [Respondent] De Vera in supposing that she need[ed] to
look beyond the title. She had no notice of the earlier sale of the land to [petitioners]. She ascertained and verified
that her vendor was the sole owner and in possession of the subject property by examining her vendors title in the
Registry of Deeds and actually going to the premises. There is no evidence in the record showing that when she
bought the land on October 23, 1997, she knew or had the slightest notice that the same was under litigation in Civil
Case No. D-10638 of the Regional Trial Court of Dagupan City, Branch 40, between Gloria Villafania and [Petitioners]
Abrigo. She was not even a party to said case. In sum, she testified clearly and positively, without any contrary
evidence presented by the [petitioners], that she did not know anything about the earlier sale and claim of the
spouses Abrigo, until after she had bought the same, and only then when she bought the same, and only then when
she brought an ejectment case with the x x x Municipal Court of Mangaldan, known as Civil Case No. 1452. To the
[Respondent] De Vera, the only legal truth upon which she had to rely was that the land is registered in the name
of Gloria Villafania, her vendor, and that her title under the law, is absolute and indefeasible.
We find no reason to disturb these findings, which petitioners have not rebutted. Spouses Abrigo base their
position only on the general averment that respondent should have been more vigilant prior to consummating the sale.
They argue that had she inspected the property, she would have found petitioners to be in possession.
This argument is contradicted, however, by the spouses own admission that the parents and the sister of
Villafania were still the actual occupants in October 1997, when Respondent De Vera purchased the property.
The family members may reasonably be assumed to be Villafanias agents, who had not been shown to have notified
respondent of the first sale when she conducted an ocular inspection. Thus, good faith on respondents part stands.

Republic vs Mendoza and Lucero

Facts
Paninsingin Primary School (PPS) is a public school operated by petitioner Republic of the Philippines (the
Republic) through the Department of Education. PPS has been using 1,149 square meters of land in Lipa City,
Batangas since 1957 for its school. But the property, a portion of Lots 1923 and 1925, were registered in the name
of respondents Primo and Maria Mendoza (the Mendozas) under Transfer Certificate of Title (TCT) T-11410.1

On March 27, 1962 the Mendozas caused Lots 1923 and 1925 to be consolidated and subdivided into four lots, as
follows:
Lot 1 292 square meters in favor of Claudia Dimayuga
Lot 2 292 square meters in favor of the Mendozas
Lot 3 543 square meters in favor of Gervacio Ronquillo; and
Lot 4 1,149 square meters in favor of the City Government of Lipa

As a result of subdivision, the Register of Deeds partially cancelled TCT T-11410 and issued new titles for
Lots 1 and 3 in favor of Dimayuga and Ronquillo, respectively. Lot 2 remained in the name of the Mendozas but
no new title was issued in the name of the City Government of Lipa for Lot 4. Meantime, PPS remained in
possession of the property.

The Republic claimed that, while no title was issued in the name of the City Government of Lipa, the Mendozas
had relinquished to it their right over the school lot as evidenced by the consolidation and subdivision plan. Further,
the property had long been tax-declared in the name of the City Government and PPS built significant, permanent
improvements on the same. These improvements had also been tax-declared.
The Mendozas claim, on the other hand, that although PPS sought permission from them to use the property as
a school site, they never relinquished their right to it. They allowed PPS to occupy the property since they had no
need for it at that time. Thus, it has remained registered in their name under the original title, TCT T-11410, which
had only been partially cancelled.

Land Titles: Key Concepts of the Torrens System (1)

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 On November 6, 1998 the Mendozas wrote PPS, demanding that it vacate the disputed property. When PPS
declined to do so, on January 12, 1999 the Mendozas filed a complaint with the Municipal Trial Court in Cities
(MTCC) of Lipa City in Civil Case 0002-99 against PPS for unlawful detainer with application for temporary
restraining order and writ of preliminary injunction.

MTCC and RTC Rulings

On July 13, 1999 the MTCC rendered a decision, dismissing the complaint on ground of the Republics
immunity from suit. The Mendozas appealed to the Regional Trial Court (RTC) of Lipa City which ruled that the
Republics consent was not necessary since the action before the MTCC was not against it.
In light of the RTCs decision, the Mendozas filed with the MTCC a motion to render judgment in the case before
it. The MTCC denied the motion, however, saying that jurisdiction over the case had passed to the RTC upon appeal.10
Later, the RTC remanded the case back to the MTCC,11 which then dismissed the case for insufficiency of evidence.12
Consequently, the Mendozas once again appealed to the RTC in Civil Case 2001-0236.
On June 27, 2006 the RTC found in favor of the Mendozas and ordered PPS to vacate the property. It held
that the Mendozas had the better right of possession since they were its registered owners. PPS, on the other hand,
could not produce any document to prove the transfer of ownership of the land in its favor. PPS moved for
reconsideration, but the RTC denied it.

CA Ruling
In a decision dated February 26, 2008, the CA affirmed the RTC decision. Upholding the Torrens system, it
emphasized the indefeasibility of the Mendozas registered title and the imprescriptible nature of their right to
eject any person occupying the property. The CA held that, this being the case, the Republics possession of the
property through PPS should be deemed merely a tolerated one that could not ripen into ownership.
The CA also rejected the Republics claim of ownership since it presented no documentary evidence to prove the
transfer of the property in favor of the government. Moreover, even assuming that the Mendozas relinquished their
right to the property in 1957 in the governments favor, the latter never took steps to have the title to the property issued
in its name or have its right as owner annotated on the Mendozas title. The CA held that, by its omissions, the Republic
may be held in estoppel to claim that the Mendozas were barred by laches from bringing its action.

SC Ruling
A decree of registration is conclusive upon all persons, including the Government of the Republic and all its
branches, whether or not mentioned by name in the application for registration or its notice. Indeed, title to the
land, once registered, is imprescriptible. No one may acquire it from the registered owner by adverse, open, and
notorious possession. Thus, to a registered owner under the Torrens system, the right to recover possession of the
registered property is equally imprescriptible since possession is a mere consequence of ownership.
Here, the existence and genuineness of the Mendozas title over the property has not been disputed. While
the consolidation and subdivision plan of Lots 1923 and 1925 shows that a 1,149 square meter lot had been designated
to the City Government, the Republic itself admits that no new title was issued to it or to any of its subdivisions
for the portion that PPS had been occupying since 1957.
That the City Government of Lipa tax-declared the property and its improvements in its name cannot
defeat the Mendozas title. This Court has allowed tax declarations to stand as proof of ownership only in the
absence of a certificate of title. Otherwise, they have little evidentiary weight as proof of ownership.
The CA erred, however, in ordering the eviction of PPS from the property that it had held as government
school site for more than 50 years. The evidence on record shows that the Mendozas intended to cede the property to
the City Government of Lipa permanently. In fact, they allowed the city to declare the property in its name for tax
purposes. And when they sought in 1962 to have the bigger lot subdivided into four, the Mendozas earmarked
Lot 4, containing 1,149 square meters, for the City Government of Lipa. Under the circumstances, it may be
assumed that the Mendozas agreed to transfer ownership of the land to the government, whether to the City
Government of Lipa or to the Republic, way back but never got around to do so and the Republic itself altogether
forgot about it. Consequently, the Republic should be deemed entitled to possession pending the Mendozas
formal transfer of ownership to it upon payment of just compensation.
The Court holds that, where the owner agrees voluntarily to the taking of his property by the government for
public use, he thereby waives his right to the institution of a formal expropriation proceeding covering such property.
Further, as the Court also held in Eusebio v. Luis, the failure for a long time of the owner to question the lack of
expropriation proceedings covering a property that the government had taken constitutes a waiver of his right to
gain back possession. The Mendozas remedy is an action for the payment of just compensation, not ejectment.
In Republic of the Philippines v. Court of Appeals, the Court affirmed the RTCs power to award just
compensation even in the absence of a proper expropriation proceeding. It held that the RTC can determine just
Land Titles: Key Concepts of the Torrens System (1)
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compensation based on the evidence presented before it in an ordinary civil action for recovery of possession of
property or its value and damages. As to the time when just compensation should be fixed, it is settled that where
property was taken without the benefit of expropriation proceedings and its owner filed an action for recovery of
possession before the commencement of expropriation proceedings, it is the value of the property at the time of
taking that is controlling.
The SC ordered the dismissal of respondents Primo and Maria Mendozas action for eviction before the Municipal
Trial Court in Cities of Lipa City in Civil Case 0002-99 without prejudice to their filing an action for payment of just
compensation against the Republic of the Philippines or, when appropriate, against the City of Lipa.

Land Titles: Key Concepts of the Torrens System (1)

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