THIRD DIVISION

SPS. RAFAEL P. ESTANISLAO G.R. No. 178537

AND ZENAIDA ESTANISLAO,
Petitioners, Present:
Ynares-Santiago, J. (Chairperson),
- versus - Austria-Martinez,
Corona,*
Nachura, and
Reyes, JJ.
EAST WEST BANKING
CORPORATION, Promulgated:
Respondent.
February 11, 2008
x ---------------------------------------------------------------------------------------- x

DECISION
YNARES-SANTIAGO, J.:

This is a petition for review of the Decision[1] of the Court of Appeals dated April 13, 2007 in CA-G.R. CV No.
87114 which reversed and set aside the Decision of the Regional Trial Court of Antipolo City, Branch 73 in Civil Case
No. 00-5731. The appellate court entered a new judgment ordering petitioners spouses Estanislao to pay respondent East
West Banking Corporation P4,275,919.65 plus interest and attorneys fees. Also assailed is the Resolution[2] dated June 25,
2007 denying the motion for reconsideration.

The facts are as follows:

On July 24, 1997, petitioners obtained a loan from the respondent in the amount of P3,925,000.00 evidenced by a
promissory note and secured by two deeds of chattel mortgage dated July 10, 1997: one covering two dump trucks and a
bulldozer to secure the loan amount of P2,375,000.00, and another covering bulldozer and a wheel loader to secure the
loan amount of P1,550,000.00. Petitioners defaulted in the amortizations and the entire obligation became due and
demandable.

On April 10, 2000, respondent bank filed a suit for replevin with damages, praying that the equipment covered by
the first deed of chattel mortgage be seized and delivered to it. In the alternative, respondent prayed that petitioners be
ordered to pay the outstanding principal amount of P3,846,127.73 with 19.5% interest per annum reckoned from judicial
demand until fully paid, exemplary damages of P50,000.00, attorneys fees equivalent to 20% of the total amount due,
other expenses and costs of suit.

The case was filed in the Regional Trial Court of Antipolo and raffled to Branch 73 thereof.

Subsequently, respondent moved for suspension of the proceedings on account of an earnest attempt to arrive at
an amicable settlement of the case. The trial court suspended the proceedings, and during the course of negotiations, a
deed of assignment[3] dated August 16, 2000 was drafted by the respondent, which provides in part, that:

x x x the ASSIGNOR is indebted to the ASSIGNEE in the aggregate sum of SEVEN

MILLION THREE HUNDRED FIVE THOUSAND FOUR HUNDRED FIFTY NINE PESOS and
FIFTY TWO CENTAVOS (P7,305,459.52), Philippine currency, inclusive of accrued interests and
penalties as of August 16, 2000, and in full payment thereof, the ASSIGNOR does hereby ASSIGN,
TRANSFER and CONVEY unto the ASSIGNEE those motor vehicles, with all their tools and
accessories, more particularly described as follows:

Make : Isuzu Dump Truck

 xxx
Make : Isuzu Dump Truck
xxx
Make : x x x Caterpillar Bulldozer x x x

That the ASSIGNEE hereby accepts the assignment in full payment of the above-mentioned
debt x x x. (Emphasis supplied)

Petitioners affixed their signatures on the deed of assignment. However, for some unknown reason, respondent
banks duly authorized representative failed to sign the deed.

On October 6, 2000 and March 8, 2001, respectively, petitioners completed the delivery of the heavy equipment
mentioned in the deed of assignment two dump trucks and a bulldozer to respondent, which accepted the same without
protest or objection.

However, on June 20, 2001, respondent filed a manifestation and motion to admit an amended complaint for the
seizure and delivery of two more heavy equipment the bulldozer and wheel loader which are covered under the second
deed of chattel mortgage. Respondent claimed that its representative inadvertently failed to include the second deed of
chattel mortgage among the documents forwarded to its counsel when the original complaint was being
drafted. Respondent likewise claimed that petitioners were given a chance to submit a refinancing scheme that would
allow them to keep the remaining two heavy equipment, but they failed to come up with such a scheme despite repeated
promises to do so.

Respondents amended complaint for replevin alleged that petitioners outstanding indebtedness as of June 14,
2001 stood at P4,275,919.61 which is more or less equal to the aggregate value of the additional units of heavy equipment
sought to be recovered. It also prayed that, in the event the two heavy equipment could not be replevied, petitioners be
ordered to pay the outstanding sum of P3,846,127.73 with 19.5% interest per annum reckoned from January 24, 1998,
compound interest, exemplary damages of P50,000.00, attorneys fees equivalent to 20% of the total amount due, other
expenses and costs of suit.

Petitioners sought to dismiss the amended complaint. They alleged that their previous payments on loan
amortizations, the execution of the deed of assignment on August 16, 2000, and respondents acceptance of the three units
of heavy equipment, had the effect of full payment or satisfaction of their total outstanding obligation which is a bar on
respondent bank from recovering any more amounts from them. By way of counterclaim, petitioners sought the award of
nominal damages in the amount of P500,000.00, moral damages in the amount of P500,000.00, exemplary damages in the
amount of P500,000.00, attorneys fees, litigation expenses, interest and costs.

On March 14, 2006, the trial court dismissed the amended complaint for lack of merit. It held that the deed of
assignment and the petitioners delivery of the heavy equipment effectively extinguished petitioners total loan obligation.
It also held that respondent was estopped from further collecting from the petitioners when it accepted, without any
protest, delivery of the three units of heavy equipment as full and complete satisfaction of the petitioners total loan
obligation. Respondent likewise failed to timely rectify its alleged mistake in the original complaint and deed of
assignment, taking almost a year to act.

Respondent bank appealed to the Court of Appeals, which reversed the trial courts decision, the dispositive
portion of which reads:

WHEREFORE, premises considered, the present appeal is hereby GRANTED. The Decision
dated March 14, 2006 of the Regional Trial Court of Antipolo City, Branch 73 in Civil Case No. 00-5731
is hereby REVERSED and SET ASIDE. A new judgment is hereby entered ordering the defendants-
appellees to pay, jointly and severally, plaintiff-appellant East West Banking Corporation the sum of
FOUR MILLION TWO HUNDRED SEVENTY FIVE THOUSAND NINE HUNDRED NINETEEN and
69/100 (P4,275,919.69) per Statement of Account as of June 14, 2001 (Exh. E, Records, p.328) with
interest at 12% per annum from June 15, 2001 until full payment thereof. Defendants-appellees are
likewise ordered to pay the plaintiff-appellant attorneys fees in the sum equivalent to ten per cent (10%)
of the total amount due.
 No pronouncement as to costs.

SO ORDERED.[4]

The reversal of the lower courts decision hinges on: (1) the appellate courts finding that the deed of assignment
cannot bind the respondent because it did not sign the same. The appellate court ruled that the assignment contract was
never perfected although it was prepared and drafted by the respondent; (2) respondent was not estopped by its own
declarations in the deed of assignment, because such declarations were the result of ignorance founded upon an innocent
mistake and plain oversight on the part of respondents staff in the banks loan operations department, who failed to
forward the complete documents pertaining to petitioners account to the banks legal department, such that when the
original complaint for replevin was prepared, the second deed of chattel mortgage covering two other pieces of heavy
equipment was inadvertently excluded; (3) petitioners are aware that there were five pieces of heavy equipment under
chattel mortgage for an outstanding balance of over P7 million; and (4) the appellate court held that even after the delivery
of the heavy equipment covered by the deed of assignment, the petitioners continued to negotiate with the respondent on a
possible refinancing scheme that will enable them to retain the two other units of heavy equipment still in their possession
and which are the subject of the second deed of chattel mortgage.

Petitioners argue that: a) the appellate court erred in ordering the payment of the principal obligation in a replevin
suit which it erroneously treated as a collection case; b) the deed of assignment is binding between the parties although it
was not signed by the respondent, constituting as it did an offer which they validly accepted; and c) the respondent is
estopped from collecting or foreclosing on the second deed of chattel mortgage.

On the other hand, respondent argues that: a) the deed of assignment produced no legal effect between the parties
for failure of the respondent to sign the same; b) the deed was founded on a mistake on its part because it honestly
believed that only one chattel mortgage had been constituted to secure the petitioners obligation; c) the non-inclusion of
the second deed of chattel mortgage in the original complaint was a case of plain oversight on the part of the loan
operations unit of respondent bank, which failed to forward to the legal department the complete documents pertaining to
the petitioners loan account; d) the continued negotiations in August 2001 between the parties, after delivery of the three
units of heavy equipment, proves that petitioners acknowledged their continuing obligations to respondent under the
second deed of mortgage; and, e) the deed of assignment did not have the effect of novating the original loan obligation.

The issue for resolution is: Did the deed of assignment which expressly provides that the transfer and conveyance
to respondent of the three units of heavy equipment, and its acceptance thereof, shall be in full payment of the petitioners
total outstanding obligation to the latter operate to extinguish petitioners debt to respondent, such that the replevin suit
could no longer prosper?

We find merit in the petition.

The appellate court erroneously denominated the replevin suit as a collection case. A reading of the original and
amended complaints show that what the respondent initiated was a pure replevin suit, and not a collection case. Recovery
of the heavy equipment was the principal aim of the suit; payment of the total obligation was merely an alternative prayer
which respondent sought in the event manual delivery of the heavy equipment could no longer be made.

Replevin, broadly understood, is both a form of principal remedy and a provisional relief. It may refer either to
the action itself, i.e., to regain the possession of personal chattels being wrongfully detained from the plaintiff by another,
or to the provisional remedy that would allow the plaintiff to retain the thing during the pendency of the action and hold
it pendente lite.[5]

The deed of assignment was a perfected agreement which extinguished petitioners total outstanding obligation to
the respondent. The deed explicitly provides that the assignor (petitioners), in full payment of its obligation in the amount
of P7,305,459.52, shall deliver the three units of heavy equipment to the assignee (respondent), which accepts
the assignment in full payment of the above-mentioned debt. This could only mean that should petitioners complete
the delivery of the three units of heavy equipment covered by the deed, respondents credit would have been satisfied in
full, and petitioners aggregate indebtedness of P7,305,459.52 would then be considered to have been paid in full as well.
 The nature of the assignment was a dation in payment, whereby property is alienated to the creditor in satisfaction
of a debt in money. Such transaction is governed by the law on sales.[6] Even if we were to consider the agreement as a
compromise agreement, there was no need for respondents signature on the same, because with the delivery of the heavy
equipment which the latter accepted, the agreement was consummated. Respondents approval may be inferred from its
unqualified acceptance of the heavy equipment.

Consent to contracts is manifested by the meeting of the offer and the acceptance of the thing and the cause which
are to constitute the contract; the offer must be certain and the acceptance absolute. [7] The acceptance of an offer must be
made known to the offeror, and unless the offeror knows of the acceptance, there is no meeting of the minds of the parties,
no real concurrence of offer and acceptance.[8] Upon due acceptance, the contract is perfected, and from that moment the
parties are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences which,
according to their nature, may be in keeping with good faith, usage and law.[9]

With its years of banking experience, resources and manpower, respondent bank is presumed to be familiar with
the implications of entering into the deed of assignment, whose terms are categorical and left nothing for
interpretation. The alleged non-inclusion in the deed of certain units of heavy equipment due to inadvertence, plain
oversight or mistake, is tantamount to inexcusable manifest negligence, which should not invalidate the juridical tie that
was created.[10] Respondent is presumed to have maintained a high level of meticulousness in its dealings with
petitioners. The business of a bank is affected with public interest; thus, it makes a sworn profession of diligence and
meticulousness in giving irreproachable service.[11]

Besides, respondents protestations of mistake and plain oversight are self-serving. The evidence show that from
August 16, 2000 (date of the deed of assignment) up to March 8, 2001 (the date of delivery of the last unit of heavy
equipment covered under the deed), respondent did not raise any objections nor make any move to question, invalidate or
rescind the deed of assignment. It was not until June 20, 2001 that respondent raised the issue of its alleged mistake by
filing an amended complaint for replevin involving different chattels, although founded on the same principal obligation.

The legal presumption is always on the validity of contracts.[12] In order to judge the intention of the contracting
parties, their contemporaneous and subsequent acts shall be principally considered.[13] When respondent accepted delivery
of all three units of heavy equipment under the deed of assignment, there could be no doubt that it intended to be bound
under the agreement.

Since the agreement was consummated by the delivery on March 8, 2001 of the last unit of heavy equipment
under the deed, petitioners are deemed to have been released from all their obligations to respondent.

Since there is no more credit to collect, no principal obligation to speak of, then there is no more second deed of
chattel mortgage that may subsist. A chattel mortgage cannot exist as an independent contract since its consideration is the
same as that of the principal contract. Being a mere accessory contract, its validity would depend on the validity of the
loan secured by it.[14] This being so, the amended complaint for replevin should be dismissed, because the chattel
mortgage agreement upon which it is based had been rendered ineffectual.

WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals dated April 13, 2007 in CA-
G.R. CV No. 87114 and its Resolution dated June 25, 2007 are hereby SET ASIDE. The March 14, 2006 decision of the
Regional Trial Court of Antipolo, Branch 73, which dismisses Civil Case No. 00-5731, is hereby REINSTATED.

SO ORDERED.

FIRST DIVISION

[G.R. No. 103576. August 22, 1996]

ACME SHOE, RUBBER & PLASTIC CORPORATION and CHUA PAC, petitioners, vs. HON. COURT OF APPEALS,
PRODUCERS BANK OF THE PHILIPPINES and REGIONAL SHERIFF OF CALOOCAN CITY, respondents.

DECISION
VITUG, J.:

Would it be valid and effective to have a clause in a chattel mortgage that purports to likewise extend its coverage to
obligations yet to be contracted or incurred? This question is the core issue in the instant petition for review on certiorari.
Petitioner Chua Pac, the president and general manager of co-petitioner "Acme Shoe, Rubber & Plastic
Corporation," executed on 27 June 1978, for and in behalf of the company, a chattel mortgage in favor of private
respondent Producers Bank of the Philippines. The mortgage stood by way of security for petitioner's corporate loan of
three million pesos (P3,000,000.00). A provision in the chattel mortgage agreement was to this effect -

"(c) If the MORTGAGOR, his heirs, executors or administrators shall well and truly perform the full obligation or obligations above-
stated according to the terms thereof, then this mortgage shall be null and void. x x x.

"In case the MORTGAGOR executes subsequent promissory note or notes either as a renewal of the former note, as an extension
thereof, or as a new loan, or is given any other kind of accommodations such as overdrafts, letters of credit, acceptances and bills of
exchange, releases of import shipments on Trust Receipts, etc., this mortgage shall also stand as security for the payment of the said
promissory note or notes and/or accommodations without the necessity of executing a new contract and this mortgage shall have the
same force and effect as if the said promissory note or notes and/or accommodations were existing on the date thereof. This mortgage
shall also stand as security for said obligations and any and all other obligations of the MORTGAGOR to the MORTGAGEE of
whatever kind and nature, whether such obligations have been contracted before, during or after the constitution of this mortgage." [1]

In due time, the loan of P3,000,000.00 was paid by petitioner corporation. Subsequently, in 1981, it obtained from
respondent bank additional financial accommodations totalling P2,700,000.00. These borrowings were on due date also
[2]

fully paid.
On 10 and 11 January 1984, the bank yet again extended to petitioner corporation a loan of one million pesos
(P1,000,000.00) covered by four promissory notes for P250,000.00 each.Due to financial constraints, the loan was not
settled at maturity. Respondent bank thereupon applied for an extrajudicial foreclosure of the chattel mortgage,
[3]

hereinbefore cited, with the Sheriff of Caloocan City, prompting petitioner corporation to forthwith file an action for
injunction, with damages and a prayer for a writ of preliminary injunction, before the Regional Trial Court of Caloocan City
(Civil Case No. C-12081). Ultimately, the court dismissed the complaint and ordered the foreclosure of the chattel
mortgage. It held petitioner corporation bound by the stipulations, aforequoted, of the chattel mortgage.
Petitioner corporation appealed to the Court of Appeals which, on 14 August 1991, affirmed, "in all respects," the
[4]

decision of the court a quo. The motion for reconsideration was denied on 24 January 1992.
The instant petition interposed by petitioner corporation was initially denied on 04 March 1992 by this Court for
having been insufficient in form and substance. Private respondent filed a motion to dismiss the petition while petitioner
corporation filed a compliance and an opposition to private respondent's motion to dismiss. The Court denied petitioner's
first motion for reconsideration but granted a second motion for reconsideration, thereby reinstating the petition and
requiring private respondent to comment thereon. [5]

Except in criminal cases where the penalty of reclusion perpetua or death is imposed which the Court so reviews as
[6]

a matter of course, an appeal from judgments of lower courts is not a matter of right but of sound judicial discretion. The
circulars of the Court prescribing technical and other procedural requirements are meant to weed out unmeritorious
petitions that can unnecessarily clog the docket and needlessly consume the time of the Court. These technical and
procedural rules, however, are intended to help secure, not suppress, substantial justice. A deviation from the rigid
enforcement of the rules may thus be allowed to attain the prime objective for, after all, the dispensation of justice is the
core reason for the existence of courts. In this instance, once again, the Court is constrained to relax the rules in order to
give way to and uphold the paramount and overriding interest of justice.
Contracts of security are either personal or real. In contracts of personal security, such as a guaranty or a suretyship,
the faithful performance of the obligation by the principal debtor is secured by the personal commitment of another (the
guarantor or surety). In contracts of real security, such as a pledge, a mortgage or an antichresis, that fulfillment is
secured by an encumbrance of property - in pledge, the placing of movable property in the possession of the creditor;
in chattel mortgage, by the execution of the corresponding deed substantially in the form prescribed by law; in real estate
mortgage, by the execution of a public instrument encumbering the real property covered thereby; and in antichresis, by a
written instrument granting to the creditor the right to receive the fruits of an immovable property with the obligation to
apply such fruits to the payment of interest, if owing, and thereafter to the principal of his credit - upon the essential
condition that if the principal obligation becomes due and the debtor defaults, then the property encumbered can be
alienated for the payment of the obligation, but that should the obligation be duly paid, then the contract is automatically
[7]

extinguished proceeding from the accessory character of the agreement. As the law so puts it, once the obligation is
[8]

complied with, then the contract of security becomes, ipso facto, null and void. [9]

While a pledge, real estate mortgage, or antichresis may exceptionally secure after-incurred obligations so long as
these future debts are accurately described, a chattel mortgage, however, can only cover obligations existing at the time
[10]

the mortgage is constituted. Although a promise expressed in a chattel mortgage to include debts that are yet to be
contracted can be a binding commitment that can be compelled upon, the security itself, however, does not come into
existence or arise until after a chattel mortgage agreement covering the newly contracted debt is executed either by
concluding a fresh chattel mortgage or by amending the old contract conformably with the form prescribed by the Chattel
Mortgage Law. Refusal on the part of the borrower to execute the agreement so as to cover the after-incurred obligation
[11]

can constitute an act of default on the part of the borrower of the financing agreement whereon the promise is written but,
of course, the remedy of foreclosure can only cover the debts extant at the time of constitution and during the life of the
chattel mortgage sought to be foreclosed.
A chattel mortgage, as hereinbefore so intimated, must comply substantially with the form prescribed by the Chattel
Mortgage Law itself. One of the requisites, under Section 5 thereof, is an affidavit of good faith. While it is not doubted that
if such an affidavit is not appended to the agreement, the chattel mortgage would still be valid between the parties (not
against third persons acting in good faith ), the fact, however, that the statute has provided that the parties to the contract
[12]

must execute an oath that -

"x x x (the) mortgage is made for the purpose of securing the obligation specified in the conditions thereof, and for no other purpose,
and that the same is a just and valid obligation, and one not entered into for the purpose of fraud."
[13]

makes it obvious that the debt referred to in the law is a current, not an obligation that is yet merely contemplated. In the
chattel mortgage here involved, the only obligation specified in the chattel mortgage contract was the P3,000,000.00 loan
which petitioner corporation later fully paid. By virtue of Section 3 of the Chattel Mortgage Law, the payment of the
obligation automatically rendered the chattel mortgage void or terminated. In Belgian Catholic Missionaries, Inc., vs.
Magallanes Press, Inc., et al., the Court said -
[14]

"x x x A mortgage that contains a stipulation in regard to future advances in the credit will take effect only from the date the same are
made and not from the date of the mortgage." [15]

The significance of the ruling to the instant problem would be that since the 1978 chattel mortgage had ceased to exist
coincidentally with the full payment of the P3,000,000.00 loan, there no longer was any chattel mortgage that could cover
[16]

the new loans that were concluded thereafter.

We find no merit in petitioner corporation's other prayer that the case should be remanded to the trial court for a
specific finding on the amount of damages it has sustained "as a result of the unlawful action taken by respondent bank
against it." This prayer is not reflected in its complaint which has merely asked for the amount of P3,000,000.00 by way
[17]

of moral damages. In LBC Express, Inc. vs. Court of Appeals, we have said:
[18] [19]

"Moral damages are granted in recompense for physical suffering, mental anguish, fright, serious anxiety, besmirched reputation,
wounded feelings, moral shock, social humiliation, and similar injury. A corporation, being an artificial person and having existence
only in legal contemplation, has no feelings, no emotions, no senses; therefore, it cannot experience physical suffering and mental
anguish. Mental suffering can be experienced only by one having a nervous system and it flows from real ills, sorrows, and griefs of
life - all of which cannot be suffered by respondent bank as an artificial person."
[20]

While Chua Pac is included in the case, the complaint, however, clearly states that he has merely been so named as a
party in representation of petitioner corporation.
Petitioner corporation's counsel could be commended for his zeal in pursuing his client's cause. It instead turned out
to be, however, a source of disappointment for this Court to read in petitioner's reply to private respondent's comment on
the petition his so-called "One Final Word;" viz:

"In simply quoting in toto the patently erroneous decision of the trial court, respondent Court of Appeals should be required to justify
its decision which completely disregarded the basic laws on obligations and contracts, as well as the clear provisions of the Chattel
Mortgage Law and well-settled jurisprudence of this Honorable Court; that in the event that its explanation is wholly unacceptable,
this Honorable Court should impose appropriate sanctions on the erring justices. This is one positive step in ridding our courts of law
of incompetent and dishonest magistrates especially members of a superior court of appellate jurisdiction." (Italics supplied.)
[21]
The statement is not called for. The Court invites counsel's attention to the admonition in Guerrero vs. Villamor; thus: [22]

"(L)awyers x x x should bear in mind their basic duty `to observe and maintain the respect due to the courts of justice and judicial
officers and x x x (to) insist on similar conduct by others.' This respectful attitude towards the court is to be observed, `not for the sake
of the temporary incumbent of the judicial office, but for the maintenance of its supreme importance.' And it is `through a scrupulous
preference for respectful language that a lawyer best demonstrates his observance of the respect due to the courts and judicial officers
x x x.'"
[23]

The virtues of humility and of respect and concern for others must still live on even in an age of materialism.
WHEREFORE, the questioned decisions of the appellate court and the lower court are set aside without prejudice to
the appropriate legal recourse by private respondent as may still be warranted as an unsecured creditor. No costs.
Atty. Francisco R. Sotto, counsel for petitioners, is admonished to be circumspect in dealing with the courts.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 190901 November 12, 2014

AMADA COTONER-ZACARIAS, Petitioner,

vs.
SPOUSES ALFREDO AND THE HEIRS REVILLA OF PAZ REVILLA, Respondents.

DECISION

LEONEN, J.:

Well-settled is the rule that "conveyances by virtue of a forged signature ... are void ab initio [as] [t]he absence of the essential
[requisites] of consent and cause or consideration in these cases rendered the contract inexistent[.]" 1

Before us is a petition for review filed by Amada Cotoner-Zacarias against respondent spouses Alfredo Revilla and Paz Castillo-Revilla,
2

praying that this court render a decision "reversing the Decision of the Regional Trial Court and Court of Appeals and declaring the
transfer of title to the Petitioner and then to her successors-in-interest as valid and binding as against the respondents."3

The Court of Appeals summarized the facts as follows.

Alfredo Revilla and Paz Castillo-Revilla (Revilla spouses) are the owners in fee simple of a 15,000-square-meter unregistered parcel of
land in Silang, Cavite, covered by Tax Declaration No. 7971. 4

In 1983, the Revilla spouses faced financial difficulties in raising funds for Alfredo Revilla’s travel to Saudi Arabia, so Paz Castillo-
Revilla borrowed money from Amada Cotoner-Zacarias (Amada). By way of security, the parties verbally agreed that Amada would take
physical possession of the property, cultivate it, then use the earnings from the cultivation to pay the loan and realty taxes. Upon full
5

payment of the loan, Amada would return the property to the Revilla spouses. 6

Unknown to the Revilla spouses, Amada presented a fictitious document entitled "Kasulatan ng Bilihanng Lupa" before the Provincial
Assessor of Cavite. This document was executed on March 19, 1979 with the Revilla spouses as sellers and Amada as buyer of the
property. Consequently, Tax Declaration No. 7971 in the name of the Revilla spouses was cancelled, and Tax Declaration No. 19773 in
7

the name of Amada was issued.

On August 25, 1984, Amada sold the property to the spouses Adolfo and Elvira Casorla (Casorla spouses) by "Deed of Absolute
SaleUnregistered Land." Tax Declaration No. 30411-A was later issued in the name of the Casorla spouses. 8

In turn, the Casorla spouses executed a deed of absolute sale dated December 16, 1991 in favor of the spouses Rodolfo and Yolanda
Sun (Sun spouses). Tax Declaration Nos. 30852-A and 18584 were issued in favor of the Sun spouses. 9
In December 1994, Alfredo Revilla returned from Saudi Arabia. He asked Amada why she had not returnedtheir tax declaration
considering their full payment of the loan. He then discovered that the property’s tax declaration was already in the name of the Sun
spouses. 10

On February 15, 1995, the Revilla spouses were served a copy of the answer in the land registration case filed by the Sun spouses for
11

the property. The Revilla spouses then saw a copy of the "Kasulatan ng Bilihan ng Lupa" and noticed that their signatures as sellers
12

were forged. 13

They then demanded the cancellation of the "Kasulatan ng Bilihan ng Lupa" from Amada and all subsequent transfers of the property,
its reconveyance, and the restoration of its tax declaration in their name. Amada failed to take action.
14

On November 17, 1995, the Revillaspouses filed a complaint before the Tagaytay Regional Trial Court for the annulment of sales and
transfers of title and reconveyance of the property with damages against Amada, the Casorla spouses, the Sun spouses, and the
Provincial Assessor of Cavite. 15

In her answer, Amada denied that the property was used as a security for the Revilla spouses’ loan. Instead, she claimed that the
16

Revilla spouses voluntarily executed the "Kasulatan ng Bilihan ng Lupa" in her favor on March 19, 1979. She added that the Revilla
spouses’ cause of action already prescribed. 17

For their part, the Sun spouses argued good faith belief that Amada was the real owner of the property asAmada showed them a tax
declaration in her name and the "Kasulatan ng Bilihan ng Lupa" allegedly executed by the Revilla spouses. When the Sun spouses
18

discovered there was another sale with the Casorla spouses, they were assured by Amada that she had already bought back the
property from the Casorla spouses. Subsequently, the Casorla spouses executed a deed ofabsolute sale dated December 16, 1991 in
19

favor of the Sun spouses. They also argued prescription against the Revilla spouses, and prayed for damages against Amada by way
20

of crossclaim. 21

On August 3, 2006, the Regional Trial Court found the "Kasulatan ng Bilihan ng Lupa" to be a fictitious document, and ruled in favor of
22

the Revilla spouses:

WHEREFORE, premises considered, judgment is hereby rendered as follows:

1. Declaring the sales/transfers from Tax Declaration No. 7971, s. 1980 to Tax Declaration No. 18584, s. 1994 as NULL and
VOID, without valid transmission of title and interest from the original owners, plaintiffs herein and consequently, entitling
plaintiffs to reinstatement and reconveyance of their title/taxdeclaration as well as possession of the subject property;

2. Ordering defendant Zacariasto pay the following:

2.1 To the Plaintiffs:

a. ₱50,000.00 for moral damages;

b. ₱20,000.00 for exemplary damages; and

c. ₱80,000.00 for attorney’s fees.

2.2 To Defendant-Spouses Sun:

a. ₱467,350.00 for actual damages;

b. ₱50,000.00 for moral damages;

c. ₱20,000.00 for exemplary damages; and

d. ₱100,000.00 for attorney’s fees.

SO ORDERED. 23

Amada appealed the trial court’s decision, while the Sun spouses partially appealed the decision as to interest and damages.

On August 13, 2009, the Court of Appeals dismissed the appeal of Amada, and partially granted the appeal of the Sun spouses. The
24

dispositive portion reads:

WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by us DISMISSING the appeal filed by defendant
appellant Amada C. Zacarias in this case, and PARTIALLY GRANTING the appeal filed by the Spouses Rodolfo and Yolanda Sun. The
Decision dated August 3, 2006 rendered by Branch 18 of the Regional Trial Court of the Fourth Judicial Region stationed in Tagaytay
City, Cavite in Civil Case No. TG-1543 is MODIFIED in that defendant-appellant Amada C. Zacarias is ordered to pay interest at 6% per
annum on the principal obligation in the amount of ₱467,350.00 from February 3, 1995, the date of the first judicial demand by the
Spouses Sun, until said decision on the principal obligation became final and executory, and interest at 12% per annum on the principal
obligation, moral and exemplary damages, as well as attorney’s fees, from the time said decision became final and executory until full
payment of said amounts.

SO ORDERED. 25

The Court of Appeals denied Amada’s motion for reconsideration; hence, she filed this petition. Petitioner argues that the
antichresisclaim of the Revilla spouses was not reduced into writing, thus, it is void under Article 2134 of the Civil Code. She submits
26

that the allegation of antichresis was only an excuse by the Revilla spouses for their failure to impugn possession of the property by
Amada and her successors-in-interest for over 16 years. 27

Petitioner contends that the sale inher favor was established by the "Kasulatan ng Bilihan ng Lupa," the delivery of the tax declaration,
and the testimony of one Mrs. Rosita Castillo (Rosita). Rosita was the second wife of Felimon Castillo, the previous owner of the
28

property. She testified that respondent Paz Castillo-Revilla admitted toher father, Felimon, that she and Alfredo Revilla sold the property
to Amada. 29

On the alleged forgery, petitioner submits that the court misapplied the principle that "he who alleges not he who denies must prove"
when it stated that she had the burden of proving the due execution of the deed of absolute sale. Since the Revilla spouses alleged that
the deedwas a forged document, they had the burden of proving the forgery. She then cites the trial court in that "[a]ccordingly, the
30

National Bureauof Investigation was not able to ascertain the genuineness of the signatureof plaintiff Paz Revilla because of lack of
sufficient sample signatures. . . ."
31

On the prescription argument, the parties live in a very small barangay. While Alfredo Revilla worked in Saudi Arabia, he admitted
returning to the Philippines twice a year, while his wife never left Silang, Cavite, and yet the Revilla spouses never questioned the
32

activities on the property for more than 16 years. 33

On the proper docket fees, petitioner contends that the Revilla spouses paid docket fees based on their prayer for actual damages of
₱50,000.00, moral damages of ₱50,000.00, and attorney’s fee of ₱80,000.00, when they should have based it on ₱12,000,000.00, the
value of the property they alleged in their supplemental pre-trial brief.
34

Lastly, petitioner argues that the property is conjugal in nature, but the court never declared that respondent Paz Castillo-Revilla’s
signature was falsified. Thus, the sale over her half of the property cannot be declared void. She adds that the Sun spouses are buyers
35

in good faith for value, making reinstatement of the property impossible. 36

Respondents Revilla spouses counter that the factual issue of whether the "Kasulatan ng Bilihan ng Lupa" isa falsified document was
already conclusively resolved by the lower courts and, generally, factual findings are beyond this court’s power of review. 37

On the prescription issue, respondents Revilla spouses argue that an action or defense to declare a document null is
imprescriptible. Laches also does not apply since they immediately questioned the fraudulent transfers by filing a complaint in
38

November 1995 upon learning of the questionable documents in February 1995, after Alfredo had returned from Saudi Arabia in
December 1994. 39

Respondents Revilla spouses contend that they paid the proper docket fees. The ₱12,000,000.00 mentioned during pre-trial that
petitioner insists should have been the basis of the fees was neither stated in the complaint nor awarded by the court. 40

Respondents Revilla spouses argue that the court did not err in ordering reinstatement of the property tothem. First, the defense that
the Sun spouses were buyers in good faith is a personal defense that cannot be raised by petitioner who was not privy to the sale
between the Casorla spouses and the Sun spouses. Second, an alternative prayer for damages cannot be interpreted as an admission
41

that the relief for reinstatement is not viable. Third, the transaction happened prior to the effectivity of the Family Code; thus, Article 172
42

of the Civil Code applies such that "[t]he wife cannot bind the conjugal partnership without the husband’s consent, except in cases
provided by law." Consequently, the result is the same even if respondent Paz Castillo-Revilla did not testify that the signature is not
43

hers, as she cannot bind the entire property without her husband’s consent. Lastly, no unjust enrichment exists since they were
44

deprived of their property for so long. 45

The issues for this court’s resolution are as follows:

First, whether respondents Revilla spouses’ cause of action is barred by prescription or laches; Second, whether the trial court acquired
jurisdiction when respondents Revilla spouses paid filing fees based on the ₱50,000.00 claim for damages in the complaint but stated
in their supplemental pre-trial brief that the property is valued at ₱12,000,000.00; and
Third, whether the Court of Appeals erred in upholding the reinstatement and reconveyance of the property in favor of respondents
Revilla spouses.

I.

On the first issue, petitioner argues that respondents Revilla spouses’ claim is barred by laches since theyallowed 16 years to lapse,
with petitioner having possession of the property, before filing suit. 46

Laches has been defined as "the failure or neglect, for an unreasonable and unexplained length of time, to do that which — by the
exercise of due diligence — could or should have been done earlier." 47

The elements that need to be present and proven before an action is considered barred by laches are the following:

The four basic elements of laches are: (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 and 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 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. 48

There was no delay by respondents Revilla spouses in asserting their rights over the property. The lower courts found that respondents
Revilla spouses first learned of the existence of the "Kasulatan ng Bilihan ng Lupa" in February 1995 when they were serveda copy of
the pleading in the land registration case instituted by the Sun spouses. They filed their complaint within the same year, specifically, on
49

November 17, 1995. The lapse of only nine (9) months from the time they learned of the questionable transfers on the property cannot
be considered as sleeping on their rights.

In any case, doctrines of equity such as laches apply only in the absence of statutory law. The Civil Code clearly provides that "[t]he
action or defense for the declaration of the inexistence of a contract does not prescribe." This court has discussed:
50

Lachesis a doctrine in equity and our courts are basically courts of law and not courts of equity. Equity, which has been aptly described
as "justice outside legality," should be applied only in the absence of, and never against, statutory law. Aequetas nunguam contravenit
legis. The positive mandate of Art. 1410 of the New Civil Code conferring imprescriptibility to actions for declaration of the inexistence of
a contract should pre-empt and prevail over all abstract arguments based only on equity. Certainly, laches cannot be set up to resist the
enforcement of an imprescriptible legal right, and petitioners can validly vindicate their inheritance despite the lapse of time. 51

II.

On the second issue, petitioner argues that respondents Revilla spouses did not pay the correct docket fees. She submits that docket
fees paid were based on the prayer for actual damages of ₱50,000.00, moral damages of ₱50,000.00, and attorney’s fee of
₱80,000.00, when the spouses Revilla should have based it on ₱12,000,000.00, the value of the property they alleged in their
supplemental pre-trial brief. Petitioner cites Supreme Court Circular No. 7 and jurisprudence holding that the payment of proper docket
52

fees is crucial in vesting courts with jurisdiction over the subject matter. 53

This court finds that respondents Revilla spouses paid the proper docket fees, thus, the trial court acquired jurisdiction.

It is true that "[i]t is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the prescribed docket fee,
that vests a trial court with jurisdiction over the subject matter or nature of the action."
54

In Manchester Development Corporation v. Court of Appeals, this court "condemned the practice of counsel who in filing the original
55

complaint omitted from the prayer any specification of the amount of damages although the amount of over 78 million is alleged in the
body of the complaint." The court gave the following warning against this unethical practice that serves no other purpose than to avoid
56

paying the correct filing fees:

The Court serves warning that itwill take drastic action upon a repetition of this unethical practice. To put a stop to this irregularity,
henceforth all complaints, petitions, answers and other similar pleadings should specify the amount of damages being prayed for not
only inthe body of the pleading but also in the prayer, and said damages shall be considered in the assessment of the filing fees in any
case. Any pleading that fails to comply with this requirement shall not be accepted nor admitted, or shall otherwise be expunged from
the record.

The Court acquires jurisdiction over any case only upon the payment of the prescribed docket fee. An amendment of the complaint or
similar pleading will not thereby vest jurisdiction in the Court, much less the payment of the docket fee based on the amounts sought in
the amended pleading. The ruling in the Magaspi case in sofar as it is inconsistent with this pronouncement is overturned and
reversed. (Emphasis supplied)
57
This ruling was circularized through Supreme Court Circular No. 7 addressed to all lower court judges and the Integrated Bar of the
58

Philippines for dissemination to and guidance for all its members.

The facts of this case differ from Manchester and similar situations envisioned under the circular. The complaint filed by respondents
Revilla spouses included in its prayer the amount of ₱50,000.00 as actual damages, without mention of any other amount in the body of
the complaint. No amended complaint was filed to increase this amount in the prayer. Thus, the Court of Appeals found as follows:

In the case at bench, the complaint filed by the Spouses Revilla only asked for actual damages in the amount of ₱50,000.00. W hile the
Spouses Revilla mentioned the amount of ₱12,000,000.00 as actual damages in the pre-trial, said amount was not stated in the
complaint and neither was it awarded by the lower court in its judgment. Hence, said amount was not even considered by the court a
quo when it awarded damages in favor of the Spouses Revilla. Considering that the complaint was not formally amended by the
spouses to increase the amount of actual damages being sought, the trial court was not stripped of its jurisdiction to try the case since
the Spouses Revilla correctly paid the docket fees based merely on what was prayed for in the complaint.Indeed, the mere mentioning
by the Spouses Revilla of the amount of ₱12,000,000.00 during the pre-trial is inconsequential, as the trial court properly acquired
jurisdiction over the action when the Spouses Revilla filed the complaint and paid the requisite filing fees based on the amount as
prayed for in the complaint. (Emphasis supplied)
59

In Padlan v. Dinglasan, this court reiterated that "[w]hat determines the jurisdiction of the court is the nature of the action pleaded as
60

appearing from the allegations in the complaint [and] [t]he averments therein and the character of the relief sought are the ones to be
consulted." 61

Petitioner attached copies of the tax declarations and deeds of sale over the property to the petition. Tax Declaration No. 7971 in the
name of respondents Revilla spouses provides that the land had a market value of ₱13,500.00, while the mango trees had a market
value of ₱3,500.00. Petitioner alleged in her petition that respondents Revilla spouses offered to sell the property to her for
62

₱50,000.00, while the trial court found that the "Kasulatan ng Bilihan ng Lupa" reflected the amount of ₱20,000.00. Subsequent tax
63 64

declarations in the name of petitioner, the Casorla spouses, and the Sun spouses all provided for land market values lower than
₱50,000.00. The deed of sale in favor of the Casorla spouses states that the assessed value of the property was ₱1,400.00, and the
65

consideration for the sale was ₱50,000.00. The subsequent deed of sale in favor of the Sun spouses provides for the same amount as
66

consideration. 67

None of these documents submitted by petitioner indicate an amount in excess of the ₱50,000.00 prayed for by respondents Revilla
spouses as actual damages in their complaint. Thus, the basis for the ₱12,000,000.00 value raised during pre-trial is unclear. Based on
the complaint, respondents Revilla spouses paid the correct docket fees computed from the amounts in their prayer.

III.

The third issue involves the reinstatement of respondents Revilla spouses in the property and reconveyance of its tax declaration in
their favor.

Petitioner argues that antichresis is a formal contract that must be in writing in order to be valid. Respondents Revilla spouses were
68

not able to prove the existence of the alleged antichresis contract. On the other hand, the sale of the property to petitioner was
established by the "Kasulatan ng Bilihan ng Lupa" and the testimony of Rosita Castillo, the second wife of the previous owner, Felimon
Castillo.
69

We affirm the lower courts’ order of reinstatement and reconveyance of the property in favor of respondents Revilla spouses.

Respondents Revilla spouses’ complaint sought "to annul the sales and transfers of title emanating from Tax Declaration No. 7971
registered in their name involving a 15,000-square[-]meter unregistered land . . . with prayer for reconveyance and claims for
damages." There was no prayer to declare the purported contract of sale as antichresis. Thus, respondents Revilla spouses neither
70 71

discussed nor used the term "antichresis" in their comment and memorandum before this court. They focused on the nature of their
complaint as one for annulment of titles on the ground of forgery. At most, the trial court’s summary of respondents Revilla spouses’
72

evidence described the parties’ agreements as follows:

Plaintiffs’ evidence and the testimony of plaintiff Alfredo Revilla tend to indicate that plaintiffs are the owners in fee simple of a 15,000-
square[-]meter unregistered land, located at Brgy. Adlas, Silang, Cavite. Their ownership being evidenced by Tax Declaration No. 7971,
s. 1980 (Exh. "A"). Sometime in 1981, plaintiffs needed money for the travel and deployment of plaintiff Alfredo to Saudi Arabia. Plaintiff
Paz Revilla sought financial help from defendant Cotoner-Zacarias from whom she was able to obtain a loan but secured with and by
way of mortgage of the subject property. The parties further agreed that defendant Cotoner Zacarias would take possession of the
subject property and cultivate it with the earnings therefrom to be used to pay-off the loan and the annual realty taxes on the land.It was
their agreement with defendant Cotoner Zacarias that the latter will rent the subject property and with that agreement, the lease started
sometime in 1981 and plantiffs got from defendant Cotoner-Zacarias the amount of Php3,000.00 as rental for the first year, 1981, with
no specific agreement as to the period covered by such rental[.] (Emphasis supplied)
73
Article 2132 of the Civil Code provides that "[b]y the contract of antichresis the creditor acquires the right to receive the fruits of an
immovable of his debtor, with the obligation to apply them to the payment of the interest, if owing, and thereafter to the principal of his
credit."

Thus, antichresis involves an express agreement between parties such that the creditor will have possession of the debtor’s real
property given as security, and such creditor will apply the fruits of the property to the interest owed by the debtor, if any, then to the
principal amount. 74

The term, antichresis, has a Greek origin with "‘anti’ (against) and ‘chresis’ (use) denoting the action of giving a credit ‘against’ the ‘use’
of a property." 75

Historically, 15th century B.C. tablets revealed that "antichresis contracts were commonly employed in the Sumerian and Akkadian
Mesopotamian cultures." Antichresis contracts were incorporated in Babylonian law, modifying and combining it with that of mortgage
76

pledge. Nearing the end of the classical period, antichresis contracts entered Roman law that "adopted the convention that the tenant
77

usufruct had to be exactly compensated by the interest on the lump sum payment." During the middle ages, canon law banned
78

antichresis contracts for being a form of usury. These contracts only reappeared in the 1804 Napoleonic Code that influenced the laws
79

of most countries today. It had been observed that "antichresis contracts coexist with periodic rent contracts in many property
80

markets." 81

In the Civil Code, antichresis provisions may be found under Title XVI, together with other security contracts such as pledge and
mortgage.

Antichresis requires delivery of the property to the antichretic creditor, but the latter cannot ordinarily acquire this immovable property in
his or her possession by prescription. 82

Similar to the prohibition against pactum commissorium since creditors cannot "appropriate the thingsgiven by way of pledge or
83

mortgage, or dispose of them," an antichretic creditor also cannot appropriate the real property in his or her favor upon the non-
84

payment of the debt. 85

Antichresis also requires that the amount of the principal and the interest be in writing for the contract to be valid. 86

However, the issue before us does not concern the nature of the relationship between the parties, but the validity of the documents that
caused the subsequent transfers of the property involved.

The reinstatement of the propertyin favor of respondents Revilla spouses was anchored on the lower courts’ finding that their signatures
as sellers in the "Kasulatan ng Bilihan ng Lupa" were forged.

This court has held that the "question of forgery is one of fact." Well-settled is the rule that "[f]actual findings of the lower courts are
87

entitled great weight and respect on appeal, and in fact accorded finality when supported by substantial evidence on the record." 88

The Court of Appeals agreed with the finding of the trial court that the signature of Alfredo Revilla in the "Kasulatan ng Bilihan ng Lupa"
was forged:

It was convincingly found by the court a quo that the Kasulatan ng Bilihan ng Lupaor Deed of Sale covering the subject property
allegedly executed by the Spouses Revilla in favorof Zacarias was spurious, as the trial court, after relying on the report of the
handwriting experts of the National Bureau of Investigation (NBI) saying that "there exist significant differences in handwriting
characteristics/habits between the questioned and the standard/sample signatures ‘ALFREDO REVILLA’ such as in the manner of
execution of strokes, structural pattern of letters/elements, and minute identifying details", as well as the trial court’s own visual analysis
of the document and the sample signatures of plaintiff-appellee Alfredo, clearly showed that his signature on the said Kasulatan ng
Bilihan ng Lupawas indeed forged. 89

Petitioner contends that the lower courts never declared as falsified the signature of Alfredo’s wife, Paz Castillo-Revilla. Since the
property is conjugal in nature, the sale as to the one-half share ofPaz Castillo-Revilla should not be declared as void. 90

The transaction took place before the effectivity of the Family Code in 2004. Generally, civil laws have no retroactive effect. Article 256
91

of the Family Code provides that "[it] shall have retroactive effect insofar as it does not prejudice or impair vested or acquired rights in
accordance with the Civil Code or other laws."

Article 165 of the Civil Code states that "[t]he husband is the administrator of the conjugal partnership." Article 172 of the Civil Code
provides that "[t]he wife cannot bind the conjugal partnership without the husband’s consent, except incases provided by law." In any 92

case, the Family Code also provides as follows:

Art. 96. The administration and enjoyment of the community property shall belong to both spouses jointly. In case of disagree ment, the
husband’s decision shall prevail, subject to recourse to the court by the wife for proper remedy, which must be availed of within five
years from the date of the contract implementing such decision.

In the event that one spouse is incapacitated or otherwise unable to participate in the administration of the common properties, the
other spouse may assume sole powers of administration. These powers do not include disposition or encumbrance without authority of
the court or the written consent of the other spouse. In the absence of such authority or consent, the disposition or encumbrance shall
be void. However, the transaction shall be construed as a continuing offer on the part of the consenting spouse and the third person,
and may be perfected as a binding contract upon the acceptance by the other spouse or authorization by the court before the offer
iswithdrawn by either or both offerors. (Emphasis supplied)

Thus, as correctly found by the Court of Appeals, "assuming arguendo that the signature of plaintiff-appellee Paz on the Kasulatan ng
Bilihan ng Lupawas not forged, her signature alone would still not bind the subject property, it being already established that the said
transaction was made without the consent of her husband plaintiff-appellee Alfredo." 93

Lastly, petitioner argues that she has no obligation to prove the genuineness and due execution of the "Kasulatan ng Bilihan ng Lupa"
considering it is a public document. 94

The trial court found otherwise. Atty. Diosdado de Mesa, who allegedly notarized the "Kasulatanng Bilihan ng Lupa," was not a
commissioned notary public. The trial court discussed as follows:

Furthermore, it was discovered that the notary public who purportedly notarized the "Kasulatanng Bilihan ng Lupa" has not been
registered notary public in the province of Cavite in 1979 nor at present. The record bears out various Certifications to prove there is no
available record on file with the Office of the Clerk of Court, Regional Trial Court, Cavite City of a Commission/Order appointing Atty.
Diosdado de Mesa, the lawyer who notarized the subject document, as Notary Public for the Province and City of Cavite (Exh. "Y" to
"Y-2"); Certification from the Records Management and Archives Office, Manila that no copy is on file with the said office of the Deed of
Sale allegedly executed by plaintiffs before Notary Public Diosdado de Mesa, for and within Imus, Cavite, acknowledged as Doc. No.
432, Page No. 45, Book No. VIII, Series of 1979 (Exh. "Z" to "Z-1"); Certification issued by Clerk of Court, Atty. Ana Liza M. Luna,
Regional Trial Court, Tagaytay City that there is no available record on file of a Commission/Order appointing Atty. Diosdado de Mesa
as Notary Public for the Province and Cities of Tagaytay, Cavite and Trece Martires in 1979 (Exh. "AA" to"AA-2"); Certification issued
by Clerk of Court, Atty. Jose O, Lagao, Jr., Regional Trial Court, Multiple Sala, Bacoor, Cavite that there isno available record on file of
a Commission/Order appointing Atty. Diosdado de Mesa as Notary Public for the Province and City of Cavite (Exh. "BB" to "BB-2"); and
Certification issued by Clerk of Court, Atty. Regalado E. Eusebio, Regional Trial Court, Multiple Sala, Imus, Cavite that there is no
available record on file of a Commission/Order appointing Atty. Diosdado de Mesa as Notary Public for the Province of Cavite (Exh.
"CC" to "CC-2"). (Emphasis supplied).
95

Petitioner contends that the Sun spouses were buyers in good faith for value, thus, the court erred in ordering reinstatement of the
property in favor of respondents Revilla spouses. 96

This court has held that "the rule in land registration law that the issue of whether the buyer of realty is in good or bad faith is relevant
only where the subject of the sale is registeredland and the purchase was made from the registered owner whose title to the land is
clean[.]" Our laws have adopted the Torrens system to strengthen public confidence in land transactions: [T]he Torrens system was
97

adopted in this country because it was believed to be the most effective measure to guarantee the integrity of land titles and to insure
their indefeasibility once the claim of ownership is established and recognized. If a person purchases a piece of land on the assurance
that the seller’s title thereto is valid, he should not run the risk of losing his acquisition. If this were permitted, public confidence in the
system would be eroded and land transactions would have to be attended by complicated and not necessarily conclusive investigations
and proof of ownership. 98

Necessarily, those who rely in good faith on a clean title issued under the Torrens system for registered lands must be protected. On 1âwphi 1

the other hand, those who purchase unregistered lands do so at their own peril. 99

This good faith argument cannot be considered as this case involves unregistered land. In any case, as explained by respondents
Revilla spouses in their memorandum, this is a defense personal to the Sun spouses and cannot be borrowed by petitioner. The Sun 100

spouses no longer raised this argument on appeal, but only made a partial appeal regarding legal interest on the award. 101

WHEREFORE, this petition is DENIED for lack of merit. The decision of the Court of Appeals dated August 13, 2009 is AFFIRMED.

SO ORDERED.