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[G.R. No. 118436.

March 21, 1997]

HEIRS

OF MANUEL A. ROXAS and TRINIDAD DE LEON VDA. DE ROXAS (in substitution of original petitioner), petitioners, vs. COURT OF APPEALS and MAGUESUN MANAGEMENT & DEVELOPMENT CORPORATION, respondents. DECISION

ROMERO, J.: Trinidad de Leon Vda. de Roxas, substituted by her heirs,[1] instituted this petition for review of the Court of Appeals decision dated December 8, 1994 in "Trinidad de Leon Vda. de Roxas v. Maguesun Management and Development: Corporation," (CA G.R. CV No. 38328), alleging reversible error committed by respondent appellate court when it affirmed the decision of the Regional Trial Court of Cavite. The issue presented before us is whether or not private respondent Maguesun Corporation committed actual fraud in obtaining a decree of registration over two unregistered parcels of land in Tagaytay City, actual fraud being the only ground to reopen or review a decree of registration. The facts of the case are narrated below: On July 2, 1990, herein private respondent Maguesun Management and Development Corporation (Maguesun Corporation) filed an Application for Registration of two parcels of unregistered land located in Barangay Sungay, Tagaytay City (Lot Nos. 7231 and 7239, Cad-355, Tagaytay Cadastre) with an area of 3,641 and 10,674 square meters respectively. The original registration case was docketed as Case No. TG-373 before the Regional Trial Court of Cavite, Branch 18, presided over by Judge Julieto Tabiolo. In support of its application for registration, Maguesun Corporation presented a Deed of Absolute Sale dated June 10, 1990, executed by Zenaida Melliza as vendor and indicating the purchase price to be P170,000.00. Zenaida Melliza in turn, bought the property from the original petitioner herein, Trinidad de Leon vda. de Roxas for P200,000.00 two and a half months earlier, as evidenced by a Deed of Sale dated March 26, 1990 and an Affidavit of Self-Adjudication dated March 24, 1990. Notices of the initial hearing were sent by the Land Registration Authority (the National Land Titles and Deeds Registration Authority or NALTDRA) to Hilario Luna, Jose Gil and Leon Luna on the basis of Maguesun Corporation's application for registration. Since Trinidad de Leon vda. de Roxas was not named as an adjoining owner, occupant or adverse claimant, she was not sent a notice of the proceedings. Publication was made in the Official Gazette and the Record Newsweekly.[2] After an Order of general default was issued, the trial court proceeded to hear the land registration case. On October 4, 1990, the Land Registration Authority reported, among other things, that the subject parcels of land had previously been applied for registration in Land Registration Case No. 500, GLRO Record No. 55072 at the Court of First Instance of Cavite by Manuel A. Roxas and Trinidad de Leon but no decision has been rendered thereon.[3] Eventually, on February 13, 1991 the Regional Trial Court granted Maguesun Corporation's application for registration (Land Registration Case No. TG-373) in a three-page decision with the following dispositive portion:[4] "WHEREFORE, this Court gives imprimatur to the application for registration of said lands described in plan As-04-000108? Lot Nos. 7231 and 7239, one with an area of 3,641 and the other with an area of 10,674 square meters, as supported and shown by the corresponding technical descriptions now forming part of the records, in the name of Maguesun Management and Development Corporation, with office address at 521 Edsa, Quezon City, free from all liens and encumbrances and from any other adverse claims of any kind and nature. Upon finality of this Decision, the same ipso facto becomes executory, upon which eventuality the corresponding decree of registration may thus be issued. SO ORDERED." Consequently, the Regional Trial Court issued the Order for Issuance of the Decree on March 14, 1991, after the aforementioned Decision in LRC No. TG-373 became final[5] but not before it ordered, on February 14, 1991, Land Registration Case No. 500 (GLRO Record No. 55072) applied for by Manuel A Roxas and Trinidad de Leon, dismissed. It was only when the caretaker of the property was being asked to vacate the land that petitioner Trinidad de Leon Vda. de Roxas learned of its sale and the registration of the lots in Maguesun Corporation's name.

Hence, on April 21, 1991, petitioner filed a petition for review before the Regional Trial Court, docketed as Civil Case No. TG-1183 to set aside the decree of registration on the ground that Maguesun Corporation committed actual fraud. She alleged that the lots were among the properties she inherited from her husband, former President Manuel A. Roxas, who died on April 15, 1946 and that her family had been in open, continuous, adverse and uninterrupted possession of the subject property in the concept of owner for more than thirty years before they applied for its registration under the Torrens System of land titling. Petitioner further denied that she sold the lots to Zenaida Melliza whom she had never met before and that her signature was forged in both the Deed of Sale and the Affidavit of Self-Adjudication. In support of her claims, she also listed a number of irregularities in the documents to prove actual fraud. In addition, and perhaps more significantly, she claimed that Maguesun Corporation intentionally omitted her name as an adverse claimant, occupant or adjoining owner in the application for registration submitted to the Land Registration Authority such that the latter could not send her a Notice of Initial Hearing. As result, an order of general default was issued and Maguesun Corporation's application for registration was granted. She charged Maguesun Corporation with knowledge or authorship of the fraud owing to the fact that Maguesun Corporation's president, Manolita Guevarra Suntay after whom the corporation was named, was her niece. Manolita Suntay is the daughter of Lourdes Guevarra Suntay, a deceased cousin of petitioner Vda. de Roxas who used to help with the latter's business affairs. Manolita Suntay used to take care of the registration and insurance of the latter's cars.[6] The sole issue of the case, as laid down by the trial court after the pre-trial, was whether or not Vda. de Roxas' signatures on the Deed of Absolute Sale and the Affidavit of Self-Adjudication in favor of Zenaida Melliza were forged. [7] Petitioner, who was then already 92 years of age, testified in open court on February 11, 1992 that she has never met Zenaida Melliza, that she did not sell the subject lots and that her signatures on the Deed of Sale and Affidavit of SelfAdjudication were forged.[8] A document examiner from the Philippine National Police (PNP) concluded that there was no forgery.[9] Upon petitioner's motion, the signatures were re-examined by another expert from the National Bureau of Investigation The latter testified that the signatures on the questioned and sample documents were not written by the same person.[10] Despite the foregoing testimonies and pronouncements, the trial court dismissed the petition for review of decree of registration on April 15, 1992.[11] Placing greater weight on the findings and testimony of the PNP document examiner, it concluded that the questioned documents were not forged and if they were, it was Zenaida Melliza, and not Maguesun Corporation, who was responsible. Accordingly, Maguesun Corporation did not commit actual fraud. The court further noted that petitioner Mrs. Trinidad Roxas had not been paying taxes for several years, which fact "exhibited what appeared to be unmistakeable signs of not actually owning (the lots) any more," and that her application for registration was "previously dismissed and abandoned," thus indicating that "petitioner herself is aware that she had already lost . x x interest, if not actually her rights, over the property in question."[12] In a decision dated December 8, 1994,[13] respondent court denied the petition for review and affirmed the findings of the trial court. The Court of Appeals held that petitioner failed to demonstrate that there was actual or extrinsic fraud, not merely constructive or intrinsic fraud, a prerequisite for purposes of annuling a judgment or reviewing a decree of registration. Additionally, respondent court stated that the discrepancies or irregularities in the Deed of Sale and Affidavit of Self-Adjudication pointed out by petitioner are not patent or obvious, involve matters that are too trivial, requiring knowledge of the intricacies of the law and are "not necessarily and exclusively indicia of extrinsic fraud and/or bad faith especially when considered in the light of circumstances hereinafter discussed." The records also show, according to the appellate court, that Maguesun Corporation had not concealed from the court either the existence of petitioner or any interest she may have had in the registration proceedings. Finally, the Court of Appeals ruled that publication of the initial hearing in the Official Gazette is sufficient to confer jurisdiction upon the court.[14] Hence, the instant petition for review where it is alleged that the Court of Appeals erred in ruling that Maguesun Corporation did not commit actual fraud warranting the setting aside of the registration decree and in resolving the appeal on the basis of Maguesun Corporation's good faith. Petitioners pray that the registration of the subject lots in the name of Maguesun Corporation be cancelled, that said property be adjudicated in favor of petitioners and that respondent corporation pay moral damages not less than P100,000.00, exemplary damages not less thanP36,000.00 and attorney's fees of P60,000.00. We find the petition for review impressed with merit. 1. Registration of untitled land under the Torrens System is done pursuant to Presidential Decree No. 1529, the Property Registration Decree which amended and codified laws relative to registration of property.[15] Adjudication of land in a registration (or cadastral) case does not become final and incontrovertible until the expiration of one year after the entry of the final decree. Before such time, the decision remains under the control and sound discretion of the court rendering the decree, which court after hearing, may set aside the decision or decree and adjudicate the land to another party.[16] Absence, minority or other disability of any person affected, or any proceeding in court for reversing judgments, are not considered grounds to reopen or revise said decree. However, the right of a person deprived of land or of any estate or interest therein by adjudication or confirmation of title obtained by actual fraud is recognized by law (Section 32 of Presidential Decree No. 1529) as a valid and legal basis for reopening and revising a decree of registration. [17] It is further required that a petition for reopening and review of the decree of registration be filed within one year from the date of entry of said decree, that the petitioner has a real and dominical right and the property has not yet been transferred to an innocent purchaser.[18] Fraud is of two kinds: actual or constructive. Actual or positive fraud proceeds from an intentional deception practiced by means of the misrepresentation or concealment of a material fact. [19]Constructive fraud is construed as a fraud because of its detrimental effect upon public interests and public or private confidence, even though the act is not done or committed with an actual design to commit positive fraud or injury upon other persons.[20] Fraud may also be either extrinsic or intrinsic. Fraud is regarded as intrinsic where the fraudulent acts pertain to an issue involved in the original action, or where the acts constituting the fraud were or could have been litigated therein, and

is regarded as extrinsic where it prevents a party from having a trial or from presenting his entire case to the court, or where it operates upon matters pertaining not to the judgment itself but to the manner in which it is procured, so that there is not a fair submission of the controversy.[21] Extrinsic fraud is also actual fraud, but collateral to the transaction sued upon.[22] The distinctions are significant because only actual fraud or extrinsic fraud has been accepted as grounds for a judgment to be annulled or, as in this case, a decree of registration reopened and reviewed. [23] In the oft-cited Macabingkil v. People's Homesite and Housing Corporation case, the Court drew from American jurisprudence stating that "relief has been granted on the ground that, by some fraud practiced directly upon the party seeking relief against the judgment or decree, (and) that party has been prevented from presenting all of his case to the court."[24] The "fraud" contemplated by the law in this case (Section 32, P.D. No. 1529) is actual and extrinsic, which includes, an intentional omission of fact required by law. [25] For fraud to justify a review of a decree, it must be extrinsic or collateral, and the facts upon which it is based have not been controverted or resolved in the case where the judgment sought to be annulled was rendered.[26] Persons who were fraudulently deprived of their opportunity to be heard in the original registration case are entitled to a review of a decree of registration. In Ramirez v. CA,[27] this Court adopted the Court of Appeals' ruling that the suppression of the fact that the applicant spouses possessed the subject ricefield merely as antichretic creditors and the fraudulent concealment and misrepresentation in the application that no other persons had any claim or interest in the said land, constitute specific allegations of extrinsic fraud supported by competent proof. Failure and intentional omission of the applicants to disclose the fact of actual physical possession by another person constitutes an allegation of actual fraud. [28] Likewise, it is fraud to knowingly omit or conceal a fact, upon which benefit is obtained to the prejudice of a third person.[29] The Court here finds that respondent Maguesun Corporation committed actual fraud in obtaining the decree of registration sought to be reviewed by petitioner. Petitioner Vda. de Roxas contended that Maguesun Corporation intentionally omitted their name, or that of the Roxas family, as having a claim to or as an occupant of the subject property. In the corporation's application for registration filed with the trial court in LRC No. TG-373, the following declaration appears: "6. That the names in full and addresses, as far as known to the undersigned, of the owners of all adjoining properties; of the persons mentioned in paragraphs 3 and 5 (mortgagors, encumbrancers, and occupants) and of the person shown on the plan as claimants are as follows: Hilario Luna, Jose Gil. Leon Luna. Provincial Road all at Tagaytay City (no house No.)"[30] The highlighted words are typed in with a different typewriter, with the first five letters of the word "provincial" typed over correction fluid. Magesun Corporation, however, annexed a differently-worded application for the petition to review case (Civil Case No. TG-1183, "Trinidad de Leon Vda. de Roxas v. Maguesun Management and Development Corporation, et al."). In the copy submitted to the trial court, the answer to the same number is as follows: Hilario Luna, Jose Gil, Leon Luna, Roxas.[31] The discrepancy which is unexplained appears intentional. If the word "Roxas" were indeed erased and replaced with "Provincial Road all at Tagaytay City (no house No.)" in the original application submitted in LRC No. TG-373 but the copy with the word "Roxas" was submitted to the trial court in Civil Case No. TG-1183, it is reasonable to assume that the reason is to mislead the court into thinking that "Roxas" was placed in the original application as an adjoining owner, encumbrancer, occupant or claimant, the same application which formed the basis for the Land Registration Authority in sending out notices of initial hearing. Section 15 of Presidential Decree No 1529 also requires the applicant for registration to state the full names and addresses of all occupants of the land and those of adjoining owners, if known and if not known, the extent of the search made to find them. Respondent corporation likewise failed to comply with this requirement of law. The truth is that the Roxas family had been in possession of the property uninterruptedly through their caretaker, Jose Ramirez.[32] Respondent Maguesun Corporation also declared in number 5 of the same application that the subject land was unoccupied when in truth and in fact, the Roxas family caretaker resided in the subject property. Respondent corporation is likewise charged with the knowledge of such possession and occupancy, for its President, who signed the Deed of Sale over the property, knew fully well that her grandaunt Trinidad de Leon vda. de Roxas owned the property. It is reasonable to expect her as a buyer to have inspected the property prior to the sale such that the ascertainment of the current possessors or occupants could have been made facilely. Respondent corporation's intentional concealment and representation of petitioner's interest in the subject lots as possessor, occupant and claimant constitutes actual fraud justifying the reopening and review of the decree of registration. Through such misfeasance, the Roxas family was kept ignorant of the registration proceedings involving their property, thus effectively depriving them of their day in court. 2. Respondent Court of Appeals held that Maguesun Corporation had not concealed from the court either the existence of Trinidad de Leon Vda. de Roxas or any interest she may have in the registration proceedings for the records are replete with references by Maguesun Corporation itself to petitioner.[33] Mention of the late President's name as well as that of petitioner was made principally in the Formal Offer of Exhibits for respondent corporation, in a Copy of Plan of Lots 7231 and 7239, tax declarations and as predecessor-in-interest. However, this is not sufficient compliance with what the law requires to be stated in the application for registration. Disclosure of petitioner's adverse interest, occupation and possession should

be made at the appropriate time, i.e., at the time of the application for registration, otherwise, the persons concerned will not be sent notices of the initial hearing and will, therefore, miss the opportunity to present their opposition or claims. 3. Publication of the Notice of Initial Hearing was made in the Official Gazette and in the Record Newsweekly, admittedly not a newspaper of general circulation. The Court of Appeals held that pursuant to Section 23 of Presidential Decree No. 1529, publication in the Official Gazette is sufficient to confer jurisdiction. Said provision of law expressly states that "the Commissioner of Land Registration shall cause a notice of initial hearing to be published once in the Official Gazette and once in a newspaper of general circulation in the Philippines. Provided, however, that the publication in the Official Gazette shall be sufficient to confer jurisdiction upon the court. x x x" While publication of the notice in the Official Gazette is sufficient to confer jurisdiction upon the court, publication in a newspaper of general circulation remains an indispensable procedural requirement. Couched in mandatory terms, it is a component of procedural due process and aimed at giving "as wide publicity as possible" so that all persons having an adverse-interest in the land subject of the registration proceedings may be notified thereof. [34] Although jurisdiction of the court is not affected, the fact that publication was not made in a newspaper of general circulation is material and relevant in assessing the applicant's right or title to the land. 4. The allegations of forgery and the discrepancies in the documentary, as well as in the testimonial evidence regarding this issue which are all crucial to this case, compelled the Court to undertake a careful review of the facts of the case.[35] A close scrutiny of the evidence on record leads the Court to the irresistible conclusion that forgery was indeed attendant in the case at bar. Although there is no proof of respondent Maguesun Corporation's direct participation in the execution and preparation of the forged instruments, there are sufficient indicia which proves that Maguesun Corporation is not the "innocent purchaser for value" who merits the protection of the law. In response to the questions fielded by the trial counsel and by counsel for petitioner, PNP Document Examiner Zacarias Semacio sought to explain all the differences pointed out in the questioned signatures and in the sample signatures as having been caused merely by "natural variation."[36] He concluded that the questioned signatures were not forged. In contrast, Chief of the Questioned Documents Division of the National Bureau of Investigation, Arcadio Ramos testified with more specificity as befits an expert that the questioned and sample signatures were not written by one and the same person because of "(t)he manner of execution of strokes the personalized proportional characteristics of letters; the linking/connecting between letters the structural pattern of letters and other minute details x x x."[37] Moreover, petitioner Trinidad de Leon vda. de Roxas categorically declared that she has never met Zenaida Melliza and did not sell the subject property.[38] Petitioner, then over ninety years old, has no motive to attest to a falsehood. Petitioner and her family also own several other pieces of property, some of which are leased out as restaurants, e.g. Leo's Restaurant and Ma Mon Luk Restaurant.[39] This is an indication that petitioner is not unaware of the value of her properties. Hence, it is unlikely that she would sell over thirteen thousand square meters of prime property in Tagaytay City to a stranger for a measly P200,000.00. Finally, even to a layman's eye, the documents, as well as the enlarged photographic exhibit of the signatures, reveal forgery. The questioned signatures taken from the Deed of Sale and Affidavit of Self-Adjudication are starkly different from the sample signatures in several documents executed by petitioner. The questioned signatures are smooth and rounded, and have none of the jagged and shaky character of petitioner's signatures, characteristic of the penmanship of elderly persons. There are also added considerations reflective of the dubious character of the Affidavit of Self-Adjudication purportedly executed by petitioner.[40] In it she declares that she is a resident of 22 8th Street, New Manila, Quezon City, when she actually lives in 2 Park Road, North Forbes Park, Makati. She also states that she is the "sole heir of the late Manuel De Roxas who died sometime on the year 1944 at Manila." Petitioner's husband is President Manuel A. Roxas and she refers to herself as Trinidad de Leon vda. de Roxas. President Roxas was survived by petitioner and their two children, Ma. Rosario Roxas and Gerardo Roxas (who predeceased petitioner). The fact that petitioner was not the sole heir was known to the general public, as well as the demise of the late President on April 15, 1946 while delivering a speech at Clark Field, Pampanga. The aforementioned irregularities are too glaring to have been ignored. If petitioner did in fact execute said Affidavit, there is no reason why she should state facts other than the unadulterated truth concerning herself and her family. Additionally, Zenaida Melliza's non-appearance raises doubt as to her existence. Her given address was Matina, Davao City. How was she related to petitioner and what led her to purchase the subject property? Respondent corporation could very well have presented her to prove the legitimacy of their transaction. If petitioner were selling said property, would she not have offered them first to interested relatives such as Manolita G. Suntay? Would an ordinary person sell more than thirteen thousand square meters of prime property for P170,000.00 when it was earlier purchased for P200,000.00? These questions highlight several implausibilities in the alleged sale of the subject property by herein petitioner. As Maguesun Corporation's President who is related to petitioner, Manolita G. Suntay should have verified the sale of the subject property by Zenaida Melliza. Manolita G. Suntay's closeness to petitioner Vda. de Roxas, as one who even registered the latter's car, suggests acquaintance with the late petitioner's properties as well as the possibility that she took advantage of such knowledge. From the foregoing, it is quite clear that respondent corporation cannot tack its possession to that of petitioner as predecessor-in-interest. Zenaida Melliza conveyed no title over the subject parcels of land to Maguesun Corporation as she was not the owner thereof.[41] Maguesun Corporation is thus not entitled to the registration decree which the trial court granted in its decision. Palpably, petitioner has not been interrupted in her more than thirty years of open, uninterrupted, exclusive and notorious possession in the concept of an owner over the subject lots by the irregular transaction to Zenaida Melliza. She therefore retains title proper and sufficient for original registration over the two parcels of land in question pursuant to Section 14 of Presidential Decree No. 1529.[42]

WHEREFORE, the instant petition is hereby GRANTED. The Decision of the Court of Appeals in C.A. G.R. CV No. 38328 ("Trinidad de Leon Vda. de Roxas v. Maguesun Management & Development Corporation, et al.") promulgated on December 8, 1994 is hereby REVERSED AND SET ASIDE. Accordingly, registration of title over the subject parcels of land, described in Plan AS-04-000108, Lot Nos. 7231 and 7239, with an area of 3,461 and 10,674 square meters, respectively, as shown and supported by the corresponding technical descriptions now forming part of the Records of LRC No. TG-373, is awarded to herein petitioner Trinidad de Leon vda. de Roxas and her heirs, herein substituted as petitioners. Upon finality of this Decision, the Land Registration Authority is hereby directed to ISSUE with reasonable dispatch the corresponding decree of registration and certificate of title pursuant to Section 39 of Presidential Decree No. 1529. SO ORDERED. Regalado, (Chairman), Puno, Mendoza, and Torres, Jr., JJ., concur.

G.R. No. 162873

July 21, 2006

JOSE CAOIBES, JR., MELENCIO CAOIBES and LOIDA CAOIBES, petitioners, vs. CORAZON CAOIBES-PANTOJA, assisted by her husband CONRADO PANTOJA, respondent. DECISION CARPIO MORALES, J.: Petitioners Jose Caoibes, Jr., Melencio Caoibes and Loida Caoibes, as FIRST PARTY, and respondent Corazon Caoibes-Pantoja, as SECOND PARTY, forged on May 10, 1982 an agreement entitled "Renunciation and Transfer of Claims, Rights, and Interests" (the agreement) covering a parcel of land, Lot 2 of plan Psd-162069 (Lot 2), situated in Calaca, Batangas containing an area of 54,665 sq. m., the pertinent portions of which agreement read: xxxx THAT under and by virtue of a court approved document entitled "Compromise Agreement" entered into by the parties in Special Proceeding No. 857 and Civil Case No. 861 of the Court of First Instance of Batangas, Branch VII, in particular Paragraph 4 (b) of aforesaid document, the FIRST PARTY are to receive, among others, in full ownership pro indiviso, and free from all liens and encumbrances, the following described real property, to wit: A parcel of land (Lot 2 of plan Psd-162069), situated in the sitio of Taklang-Anak, Barrio of Calantas, Municipality of Calaca, Province of Batangas. Bounded on the NW., along line 1-2, by center of Creek and property of Felimon Las Herras (Lot 1 of plan Psu-101302); on the SE., along lines 2, 3, 4 and 5, by Lot 1 of plan Psu-162069; on the S., along lines 5, 6, 7, 8 and 9, by Creek; on the NW., along lines 9, 10, 11, 12, 13 and 1, by center of Creek and property of Felimon Las Herras (Lot 1 of plan Psu-101302). x x x containing an area of FIFTY-FOUR THOUSAND SIX HUNDRED SIXTY-FIVE (54,665) square meters. THAT issuance to the FIRST PARTY of the proper title to the aforesaid property is presently the subject of a land registration proceeding LRC No. N-411 pending before the Court of First Instance of Batangas, Branch VII, acting as a land registration court.

THAT for and in consideration of the payment by the SECOND PARTY[-herein respondent Corazon Caoibes-Pantoja] of the loan secured by a real estate mortgage constituted on the property described and delineated in Transfer Certificate of Title No. P-189 of the Registry of Deeds of Batangas, said loan in the principal amount of NINETEEN THOUSAND PESOS (P19,000.00) exclusive of accrued interest being presently outstanding in the name of GUILLERMO C. JAVIER with the LEMERY SAVINGS AND LOAN ASSOCIATION, Balayan Branch, and the further undertaking of the SECOND PARTY to forthwith deliver upon release to the FIRST PARTY aforesaid TCT No. P-189 free from all liens and encumbrances, the FIRST PARTY hereby RENOUNCE, RELINQUISH and ABANDON whatever rights, interests, or claimssaid FIRST PARTY may have over the real property in paragraph 1 hereof x x x [illegible] hereby TRANSFER, CEDE, and CONVEY said rights x x x [illegible] and claims, in a manner absolute andirrevocable, unto and in favor of the SECOND PARTY, her heirs, successors and assigns; THAT by virtue of aforestated renunciation and transfer, the SECOND PARTY is hereby subrogated and/or substituted to whatever rights, interests or representations the FIRST PARTY may have in the prosecution of the proper land registration proceeding mentioned elsewhere in this instrument.1 x x x x (Emphasis and underscoring supplied) As reflected in the abovequoted agreement of the parties, petitioners, as FIRST PARTY, renounced, relinquished, abandoned and transferred, ceded and conveyed whatever rights "[they] may have" over Lot 2 in favor of respondent, as second party, and on account of the renunciation and transfer, petitioners transferred "whatever rights . . . [they] may have in the prosecution of the land registration proceeding," LRC No. N-411. About 14 years after the execution of the parties above-said agreement or in 1996, respondent filed a motion to intervene and be substituted as applicant in LRC Case No. N-411. The motion was opposed by petitioners who denied the authenticity and due execution of the agreement, they claiming that the same was without the consent and conformity of their mother, the "usufructuary owner [sic]" of the land. The land registration court, finding for petitioners, denied respondents motion by Order of March 2, 1999. Respondent thus filed on March 16, 2000 a Complaint for Specific Performance and Damages against petitioners before the Regional Trial Court (RTC) of Balayan, Batangas, docketed as Civil Case No. 3705, for the enforcement of petitioners obligation under the agreement. To the complaint, petitioners filed a motion to dismiss anchored on prescription, laches and prematurity of action on account of respondents failure to refer the case to the barangay lupon for conciliation. On their defense of prescription, petitioners argued: It was clearly alleged in the complaint that the purported RENUNCIATION AND TRANSFER OF CLAIMS, RIGHTS AND INTERESTS was . . . entered into on or about May 10, 1982 a period of almost 18 LONG YEARS [BEFORE] THE PRESENT ACTION. Under Article 1144 (1) of the New Civil Code, it is required that an action founded upon a written contract must be brought WITHIN TEN (10) YEARS FROM THE TIME THE RIGHT OF ACTION ACCRUES.2 (Underscoring supplied) Branch 9 of the Balayan RTC, by Resolution3 dated July 12, 2000, granted petitioners motion in this wise: The Court is of the view that immediately after the execution of the RENUNCIATION contract, herein defendants were deemed to have renounced and transferred their rights or whatever claim they may have on the subject property and the latter should have at once acted to make the renunciation effective by having herself substituted to petitioner in the land registration proceedings. Her failure to make immediately effective the terms of the said RENUNCIATION was constitutive of what is referred to as the requisite "cause of action" on the part of the plaintiff. A cause of action arises when that which should have been done is not done, or that which should not have been done is done, and in cases where there is no special provision for such computation, recourse must be had to the rule that the period must be counted from the day on which the corresponding action could have been instituted (Central Philippine University vs. CA, 246 SCRA 511). The fact, that, from the day immediately following the execution of the RENUNCIATION contract up to the present, with the defendants still continuing the land registration proceedings without any substitution of plaintiff, could only be interpreted as a clear manifestation of defendants willful violation of the claimed RENUNCIATION contract. It is quite incorrect, therefore, to say that the violation happened only when the defendants objected that they be substituted by plaintiff in an intervention proceedings filed by the latter. The added fact that plaintiff did not raise this glaring violation earlier is something that eludes the comprehension of this Court. What separates the execution of the contract and the filing of this case is a period of almost EIGHTEEN (18) long years way beyond the prescriptive period set by law.4 (Underscoring supplied)

On appeal by respondent, the Court of Appeals, by Decision5 of December 4, 2003 subject of the present petition for review on certiorari, reversed the trial courts Resolution, it holding that prescription had not yet set in. The Court of Appeals reasoned: x x x It is not from the date of the instrument but from the date of the breach that the period of prescription of action starts. Since, it was only in 1996 when plaintiff-appellant moved to intervene and be substituted as the applicant in the land registration proceeding involving the subject property that defendants-appellees raised the issue of genuineness and due execution of the instrument, it is only from this date that the cause of action of plaintiff-appellant accrued. The period should not be made to retroact to the date of the execution of the instrument on May 10, 1982 as claimed by the defendants-appellees for at that time, there would be no way for the plaintiff-appellant to know of the violation of her rights.6 (Underscoring supplied) The appellate court thus ordered the remand of the case to the trial court for further proceedings. Petitioners motion for reconsideration of the decision of the appellate court having been denied, the present petition for review on certiorari was filed, faulting said court to have I. . . . ERRED IN REVERSING THE TRIAL COURT AND LABOR[ING] UNDER A GROSS MISAPPREHENSION OF FACTS IN HOLDING THAT THE ACTION OF RESPONDENT HAS NOT YET PRESCRIBED. II. . . . ERRED IN RULING THAT RESPONDENTS CAUSE OF ACTION ACCRUED ONLY IN 1996 WHEN SHE MOVED TO INTERVENE AND BE SUBSTITUTED AS AN APPLICANT, IN LIEU OF PETITIONERS IN THE LAND REGISTRATION PROCEEDING (LRC N-411) BEFORE THE REGIONAL TRIAL COURT, BRANCH 11 OF BALAYAN, BATANGAS. III. . . . COMMITTED REVERSIBLE ERROR IN HOLDING THAT THE PERIOD OF PRESCRIPTION SHOULD NOT BE MADE TO RETROACT TO THE DATE OF THE EXECUTION OF THE INSTRUMENT ON MAY 10, 1982. IV. . . . ERRED IN NOT DISMISSING THE COMPLAINT JUST THE SAME BY NOT FINDING THAT LACHES HAD ALREADY SET IN.7 By the earlier-quoted pertinent portions of the agreement, petitioners renounced and transferred whatever rights, interests, or claims they had over Lot 2 in favor of respondent for and in consideration of her payment of the therein mentioned loan in the principal amount of P19,000 which was outstanding in the name of one Guillermo C. Javier. Articles 1458, 1498 and 1307 of the Civil Code which are pertinent to the resolution of the petition provide: Art. 1458. By the contract of sale one of the contracting parties obligates himself to transfer the ownership of and to deliver a determinate thing, and the other to pay therefor a price certain in money or its equivalent. xxxx Art. 1498. When the sale is made through a public instrument, the execution thereof shall be equivalent to the delivery of the thing which is the object of the contract, if from the deed the contrary does not appear or cannot clearly be inferred. xxxx Art. 1307. Innominate contracts shall be regulated by the stipulations of the parties, by the provisions of Title I and II of this Book, by the rules governing the most analogous nominate contracts, and by the customs of the place. (Emphasis and underscoring supplied) The agreement of the parties is analogous to a deed of sale in favor of respondent, it having transferred ownership for and in consideration of her payment of the loan in the principal amount of P19,000 outstanding in the name of one Guillermo C. Javier. The agreement having been made through a public instrument, the execution was equivalent to the delivery of the property to respondent.8 In respondents complaint for specific performance, she seeks to enforce the agreement for her to be subrogated and/or substituted as applicant in the land registration proceeding over Lot 2. The agreement is of course in consonance with Sec. 22 of P.D. 1529 (Property Registration Decree which became effective on June 11, 1978) reading:

SEC. 22. Dealings with land pending original registration. After the filing of the application and before the issuance of the decree of registration, the land therein described may still be the subject of dealings in whole or in part, in which case the interested party shall present to the court the pertinent instrumentstogether with the subdivision plan approved by the Director of Lands in case of transfer of portions thereof, and the court, after notice to the parties, shall order such land registered subject to the conveyance or encumbrance created by said instruments, or order that the decree of registration be issued in the name of the person to whom the property has been conveyed by said instruments. (Underscoring supplied) In Mendoza v. Court of Appeals,9 this Court, passing on Sec. 29 of Art. No. 496, as amended (Land Registration Act), which is substantially incorporated in the immediately-quoted Sec. 22 of the Property Registration Decree, held: The law does not require that the application for registration be amended by substituting the "buyer" or the "person to whom the property has been conveyed" for the applicant. Neither does it require that the "buyer" or the "person to whom the property has been conveyed" be a party to the case. He may thus be a total stranger to the land registration proceedings. The only requirements of the law are: (1) that the instrument be presented to the court by the interested party together with a motion that the same be considered in relation with the application; and (2) that prior notice be given to the parties to the case. x x x (Emphasis supplied) In light of the law and jurisprudence, the substitution by respondent of petitioners as applicant in the land registration case over Lot 2 is not even necessary. All respondent has to do is to comply with the requirements under the above-quoted Sec. 22 of the Property Registration Decree. Ergo, it was unnecessary for respondent to file the case for specific performance subject of the present petition against petitioners to honor their agreement allowing her to be substituted in their stead as applicant in the land registration proceeding. WHEREFORE, the assailed decision of the Court of Appeals is REVERSED and SET ASIDE. The complaint of respondent, docketed by the Regional Trial Court of Balayan, Batangas as Civil Case No. 3705, Corazon Caoibes-Pantoja is, in light of the foregoing ratiocination, DISMISSED. SO ORDERED. Quisumbing, Chairperson, Carpio, Tinga, Velasco, Jr., J.J., concur.

G.R. No. 159674 June 30, 2006 SAMUEL ESTRIBILLO, CALIXTO P. ABAYATO, JR., RONGIE D. AGUILAR, TACIANA D. AGUILAR, ARTEMIO G. DE JUAN, ESTANISLAO DELA CRUZ, SR., EDGAR DUENAS, MARIO ERIBAL, REYNALDO C. ESENCIA, EMMA GONZAGA, RUBEN A. IBOJO, SAMUEL JAMANDRE, HILARION V. LANTIZA, ANSELMO LOPEZ, TERESITA NACION, CHARIE E. NASTOR, NELSON L. NULLAS, CARLITO S. OLIA, ANA PATIO, ROBERTO T. PATIO, ANTONIO P. ROCHA, FERNANDO C. RUFINO, PATERNO P. SAIN, CLAUDIO S. SAYSON, and JOEMARIE VIBO, Petitioners, vs. DEPARTMENT OF AGRARIAN REFORM and HACIENDA MARIA, INC., Respondents. DECISION CHICO-NAZARIO, J.: This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, seeking the review and reversal of the Resolutions1 of the Court of Appeals dated 27 January 2003 and 28 August 2003, respectively. The factual and procedural antecedents are as follows: The petitioners, with the exception of two, are the recipients of Emancipation Patents (EPs) over parcels of land located at Barangay Angas, Sta. Josefa, Agusan del Sur, with their respective Transfer Certificate of Title (TCT) and EP numbers presented below:

Petitioners

TCT/EP Nos.

Areas (has.)

1. SAMUEL ESTRIBILLO 2. CALIXTO P. ABAYATO, JR. 3. RONGIE D. AGUILAR 4. TACIANA D. AGUILAR 5. ARTEMIO G. DE JUAN 6. ESTANISLAO DELA CRUZ, SR. 7. EDGAR DUENAS 8. MARIO P. ERIBAL 9. REYNALDO C. ESENCIA 10. RUBEN A. IBOJO 11. SAMUEL JAMANDRE 12. HILARION V. LANTIZA 13. ANSELMO LOPEZ 14. TERESITA NACION 15. CHARIE E. NASTOR 16. NELSON L. NULLAS 17. CARLITO S. OLIA 18. ROBERTO T.PATIO 19. ANTONIO P. ROCHA 20. FERNANDO C. RUFINO 21. PATERNO P. SAIN 22. CLAUDIO S. SAYSON, and 23. JOEMARIE VIBO

TCT No. T-287/EP No. A-037675 TCT No. T-297/EP No. A-037814 TCT No. T-829/EP No. A-027293 TCT No. T-913/EP No. A-027295 TCT No. T-944/EP No. A-027296 TCT No. T-302/EP No. A-037809 TCT No. T-290/EP No. A-035676 TCT No. T-949/EP No. A-037658 TCT No. T-952/EP No. A-037836 TCT No. T-950/EP No. A-037844 TCT No. T-928/EP No. A-037873 TCT No. T-909/EP No. A-159348 TCT No. T-288/EP No. A-037674 TCT No. T-401/EP No. A-037825 TCT No. T-973/EP No. A-037840 TCT No. T-900/EP No. A-037849 TCT No. T-825/EP No. A-037829 TCT No. T-396/EP No. A-037826 TCT No. T-910/EP No. A-037673 TCT No. T-912/EP No. A-037860 TCT No. T-914/EP No. A-037830 TCT No. T-923/EP No. A-037848 TCT No. T-954/EP No. A-037813 TCT No. T-891/EP No. A-037880 TCT No. T-893/EP No. A-037827

1.7833 2.0000 0.1565 3.1441 4.2405 3.3082 3.1437 4.0128 2.3087 2.0950 1.5737 2.2670 4.5526 0.4579 4.4939 2.2140 3.9291 2.7491 1.7954 6.4266 2.2143 4.5322 4.3223 3.7151 1.31852

The two other petitioners, Emma Gonzaga and Ana Patio, are the surviving spouses of deceased recipients of EPs over parcels of land also located at Barangay Angas, Sta. Josefa, Agusan del Sur, with their corresponding TCT and EP numbers identified as follows:

(Deceased) Registered Owners 1. MANUEL S. GONZAGA 2. RAFAEL PATIO

TCT/EP Nos. TCT No. T-920/EP No. A-037832 TCT No. T-929/EP No. A-037861

Areas (has.) 4.1953 3.00783

The parcels of land described above, the subject matters in this Petition, were formerly part of a forested area which have been denuded as a result of the logging operations of respondent Hacienda Maria, Inc. (HMI). Petitioners, together with other persons, occupied and tilled these areas believing that the same were public lands. HMI never disturbed petitioners and the other occupants in their peaceful cultivation thereof.

HMI acquired such forested area from the Republic of the Philippines through Sales Patent No. 2683 in 1956 by virtue of which it was issued OCT No. P-3077-1661. The title covered three parcels of land with a total area of 527.8308 hectares, to wit:

Lot No. Lot No. 1620, Pls 4 Lot No. 1621, Pls 4 Lot No. 1622, Pls 4 TOTAL

Area (in hectares) 28.52 11.64 487.47 527.834

On 21 October 1972, Presidential Decree No. 275 was issued mandating that tenanted rice and corn lands be brought under Operation Land Transfer and awarded to farmer-beneficiaries. HMI, through a certain Joaquin Colmenares, requested that 527.8308 hectares of its landholdings be placed under the coverage of Operation Land Transfer. Receiving compensation therefor, HMI allowed petitioners and other occupants to cultivate the landholdings so that the same may be covered under said law. In 1973, the Department of Agrarian Reform (DAR) conducted a parcellary mapping of the entire landholdings of 527.8308 hectares covered by OCT No. P-3077-1661. In 1975 and 1976, the DAR approved the Parcellary Map Sketching (PMS) and the Amended PMS covering the entire landholdings. HMI, through its representatives, actively participated in all relevant proceedings, including the determination of the Average Gross Production per hectare at the Barangay Committee on Land Production, and was a signatory of an undated Landowner and Tenant Production Agreement (LTPA), covering the 527.8308 hectares. The LTPA was submitted to the Land Bank of the Philippines (LBP) in 1977. Also in 1977, HMI executed a Deed of Assignment of Rights in favor of petitioners, among other persons, which was registered with the Register of Deeds and annotated at the back of OCT No. P-3077-1661. The annotation in the OCT showed that the entire 527.8308 hectares was the subject of the Deed of Assignment. In 1982, a final survey over the entire area was conducted and approved. From 1984 to 1988, the corresponding TCTs and EPs covering the entire 527.8308 hectares were issued to petitioners, among other persons. In December 1997, HMI filed with the Regional Agrarian Reform Adjudicator (RARAD) of CARAGA, Region XIII, 17 petitions seeking the declaration of erroneous coverage under Presidential Decree No. 27 of 277.5008 hectares of its former landholdings covered by OCT No. P-3077-1661. HMI claimed that said area was not devoted to either rice or corn, that the area was untenanted, and that no compensation was paid therefor. The 17 petitions, which were later consolidated, sought for the cancellation of the EPs covering the disputed 277.5008 hectares which had been awarded to petitioners. HMI did not question the coverage of the other 250.3300 hectares under Presidential Decree No. 27 despite claiming that the entire landholdings were untenanted and not devoted to rice and corn. On 27 November 1998, after petitioners failed to submit a Position Paper, the RARAD rendered a Decision declaring as void the TCTs and EPs awarded to petitioners because the land covered was not devoted to rice and corn, and neither was there any established tenancy relations between HMI and petitioners when Presidential Decree No. 27 took effect on 21 October 1972. The Decision was based on a 26 March 1998 report submitted by the Hacienda Maria Action Team. Petitioners TCTs and EPs were ordered cancelled. Petitioners filed a Motion for Reconsideration, but the same was denied. Petitioners appealed to the Department of Agrarian Reform Adjudication Board (DARAB) which affirmed the RARAD Decision. After the DARAB denied petitioners Motion for Reconsideration, the latter proceeded to the Court of Appeals with their Petition for Review on Certiorari. The Court of Appeals issued the following assailed Resolution: A perusal of the petition reveals that the Verification and Certification of Non-Forum Shopping was executed by Samuel A. Estribillo who is one of the petitioners, without the corresponding Special Power of Attorneys executed by the other

petitioners authorizing him to sign for their behalf in violation of Section 5, Rule 7 of the 1997 Rules of Civil Procedure, as amended. WHEREFORE, the petition is DENIED DUE COURSE and necessarily DISMISSED.6 Petitioners filed a "Motion for Reconsideration With Alternative Prayer with Leave of Court for the Admission of Special Power of Attorney (SPA) Granted to Petitioner Samuel Estribillo by his Co-Petitioners." The Court of Appeals denied the motion by issuing the following assailed Resolution: Petitioners seek the reconsideration of Our Resolution promulgated on January 27, 2003 which dismissed the petition for certiorari. We find no reason to reverse, alter or modify the resolution sought to be reconsidered, since petitioners have failed to show that their belated submission of the special power of attorney can be justified as against the unequivocal requirements set forth by Sec. 5, Rule 7 of the 1997 Rules of Civil Procedure, as amended. While it is true that the Supreme Court has recognized special circumstances that justify the relaxation of the rules on nonforum shopping, such circumstances, however, are not present in the case at bar. More importantly, said Rules cannot be relaxed in view of the Supreme Courts ruling in Loquias vs. Ombudsman, 338 SCRA 62, which stated that, substantial compliance will not suffice in a matter involving strict observance by the rules. The attestation contained in the certification [on] non-forum shopping requires personal knowledge by the party who executed the same. Since the Verification and Certification on Non-Forum shopping was executed without the proper authorization from all the petitioners, such personal knowledge cannot be presumed to exist thereby rendering the petition fatally defective. Par. 2, Sec. 5 of Rule 7 of the 1997 Rules of Civil Procedure, as amended states: "Failure to comply with the foregoing requirements shall not be curable by mere amendment of the complaint or other initiatory pleading but shall be cause for the dismissal of the case without prejudice x x x" It is, thus, clear that the Motion for Reconsideration has no legal basis to support it and should be dismissed forthwith. Moreover, granting arguendo that a special power of attorney belatedly filed could cure the petitions defect, the requirement of personal knowledge of all the petitioners still has not been met since some of the other petitioners failed to sign the same. WHEREFORE, in view of the foregoing, the Motion for Reconsideration is hereby DENIED.7 Petitioners now file this present Petition contending that there had been compliance with Rule 7, Section 5 of the 1997 Rules of Civil Procedure. They further reiterate their argument that the EPs are ordinary titles which become indefeasible one year after their registration. The petition is impressed with merit.1awphil.net Petitioners have sufficiently complied with Rule 7, Section 5 of the 1997 Rules of Civil Procedure concerning the Certification Against Forum shopping Rule 7, Section 5 of the 1997 Rules of Civil Procedure was preceded by Revised Circular No. 28-91 and Administrative Circular No. 04-94, which required a certification against forum shopping to avoid the filing of multiple petitions and complaints involving the same issues in the Supreme Court, the Court of Appeals, and other tribunals and agencies. Stated differently, the rule was designed to avoid a situation where said courts, tribunals and agencies would have to resolve the same issues. Rule 7, Section 5, now provides: Sec. 5. Certification against forum shopping. The plaintiff or principal party shall certify under oath in the complaint or other initiatory pleading asserting a claim for relief, or in a sworn certification annexed thereto and simultaneously filed therewith: (a) that he has not theretofore commenced any action or filed any claim involving the same issues in any court, tribunal or quasi-judicial agency and, to the best of his knowledge, no such other action or claim is pending therein; (b) if there is such other pending action or claim, a complete statement of the present status thereof; and (c) if he should thereafter learn that the same or similar action or claim has been filed or is pending, he shall report that fact within five (5) days therefrom to the court wherein his aforesaid complaint or initiatory pleading has been filed.

Failure to comply with the foregoing requirements shall not be curable by mere amendment of the complaint or other initiatory pleading but shall be cause for the dismissal of the case without prejudice, unless otherwise provided, upon motion and after hearing. The submission of a false certification or non-compliance with any of the undertakings therein shall constitute indirect contempt of court, without prejudice to the corresponding administrative and criminal actions. If the acts of the party or his counsel clearly constitute willful and deliberate forum shopping, the same shall be ground for summary dismissal with prejudice and shall constitute direct contempt as well as a cause for administrative sanctions. Revised Circular No. 28-91 "was designed x x x to promote and facilitate the orderly administration of justice and should not be interpreted with such absolute literalness as to subvert its own ultimate and legitimate objective or the goal of all rules of procedure which is to achieve substantial justice as expeditiously as possible."8 Technical rules of procedure should be used to promote, not frustrate, justice.9 The same guidelines should still apply in interpreting what is now Rule 7, Section 5 of the 1997 Rules of Civil Procedure. Petitioner Samuel A. Estribillo, in signing the Verification and Certification Against Forum Shopping, falls within the phrase "plaintiff or principal party" who is required to certify under oath the matters mentioned in Rule 7, Section 5 of the 1997 Rules of Civil Procedure. Such was given emphasis by this Court when we held in Mendigorin v. Cabantog10 and Escorpizo v. University of Baguio11 that the certification of non-forum shopping must be signed by the plaintiff or any of the principal parties and not only by the legal counsel. In Condo Suite Club Travel, Inc. v. National Labor Relations Commission,12 we likewise held that: The certification in this petition was improperly executed by the external legal counsel of petitioner. For a certification of non-forum shopping must be by the petitioner, or any of the principal parties and not by counsel unless clothed with a special power of attorney to do so. This procedural lapse on the part of petitioner is also a cause for the dismissal of this action. (Emphasis supplied) The Court of Appeals heavily relied on the seemingly conflicting case of Loquias v. Office of the Ombudsman,13where this Court ruled that: At the outset, it is noted that the Verification and Certification was signed by Antonio Din, Jr., one of the petitioners in the instant case. We agree with the Solicitor General that the petition is defective. Section 5, Rule 7 expressly provides that it is the plaintiff or principal party who shall certify under oath that he has not commenced any action involving the same issues in any court, etc. Only petitioner Din, the Vice-Mayor of San Miguel, Zamboanga del Sur, signed the certification. There is no showing that he was authorized by his co-petitioners to represent the latter and to sign the certification. It cannot likewise be presumed that petitioner Din knew, to the best of his knowledge, whether his co-petitioners had the same or similar actions or claims filed or pending. We find that substantial compliance will not suffice in a matter involving strict observance by the rules. The attestation contained in the certification on non-forum shopping requires personal knowledge by the party who executed the same. Petitioners must show reasonable cause for failure to personally sign the certification. Utter disregard of the rules cannot justly be rationalized by harking on the policy of liberal construction. (Emphasis supplied) Loquias, however, was a case involving only five petitioners seeking relief from the Resolution of the Ombudsman charging them with violation of Republic Act No. 3019, where the above declaration "at the outset" was made together with a determination on the lack of jurisdiction on our part to decide the Petition.14 There being only five petitioners in Loquias, the unreasonableness of the failure to obtain the signatures of Antonio Din, Jr.s four co-accused is immediately apparent, hence the remark by this Court that "[p]etitioners must show reasonable cause for failure to personally sign the certification." In the present petition, petitioners allege that they are farmer-beneficiaries who reside in a very remote barangay in Agusan del Sur. While they reside in the same barangay, they allegedly have to walk for hours on rough terrain to reach their neighbors due to the absence of convenient means of transportation. Their houses are located far apart from each other and the mode of transportation, habal-habal, is scarce and difficult. Majority of them are also nearing old age. On the other hand, their lawyers (who are members of a non-government organization engaged in development work) are based in Quezon City who started assisting them at the latter part of the RARAD level litigation in 1998, and became their counsel of record only at the DARAB level. The petitioner who signed the initiatory pleading, Samuel Estribillo, was the only petitioner who was able to travel to Manila at the time of the preparation of the Petition due to very meager resources of their farmers organization, the Kahiusahan sa Malahutayong mga Mag-uugma Para sa Ekonomikanhong Kalambuan (KAMMPE). When the Petition a quo was dismissed, petitioners counsel went to Agusan del Sur and tried earnestly to secure all the signatures for the SPA. In fact, when the SPA was being circulated for their signatures, 24 of the named petitioners therein failed to sign for various reasons some could not be found within the area and were said to be temporarily residing in other towns, while some already died because of old age.15 Be that as it may, those who did not sign the SPA did not participate, and are not parties to this petition. The Court of Appeals merely said that the special circumstances recognized by this Court that justify the relaxation of the rules on the certification against forum shopping are not present in the case at bar,16 without discussing the circumstances adduced by the petitioners in their Motion for Reconsideration. Thus, assuming for the sake of argument that the actuation of petitioners was not strictly in consonance with Rule 7, Section 5 of the 1997 Rules of Civil Procedure, it should still be determined whether there are special circumstances that would justify the suspension or relaxation of the rule concerning verification and certification against forum shopping, such as those which we appreciated in the ensuing cases.

In General Milling Corporation v. National Labor Relations Commission,17 the appeal to the Court of Appeals had a certificate against forum shopping, but was dismissed as it did not contain a board resolution authorizing the signatory of the Certificate. Petitioners therein attached the board resolution in their Motion for Reconsideration but the Court of Appeals, as in this case, denied the same. In granting the Petition therein, we explained that: [P]etitioner complied with this procedural requirement except that it was not accompanied by a board resolution or a secretarys certificate that the person who signed it was duly authorized by petitioner to represent it in the case. It would appear that the signatory of the certification was, in fact, duly authorized as so evidenced by a board resolution attached to petitioners motion for reconsideration before the appellate court. It could thus be said that there was at least substantial compliance with, and that there was no attempt to ignore, the prescribed procedural requirements. The rules of procedure are intended to promote, rather than frustrate, the ends of justice, and while the swift unclogging of court dockets is a laudable objective, it, nevertheless, must not be met at the expense of substantial justice. Technical and procedural rules are intended to help secure, not suppress, the cause of justice and a deviation from the rigid enforcement of the rules may be allowed to attain that prime objective for, after all, the dispensation of justice is the core reason for the existence of courts. [Acme Shoe, Rubber and Plastic Corp. vs. Court of Appeals; BA Savings Bank vs. Sia, 336 SCRA 484]. In Shipside Incorporated v. Court of Appeals,18 the authority of petitioners resident manager to sign the certification against forum shopping was submitted to the Court of Appeals only after the latter dismissed the Petition. It turned out, in the Motion for Reconsideration, that he already had board authority ten days before the filing of the Petition. We ratiocinated therein that: On the other hand, the lack of certification against forum shopping is generally not curable by the submission thereof after the filing of the petition. Section 5, Rule 45 of the 1997 Rules of Civil Procedure provides that the failure of the petitioner to submit the required documents that should accompany the petition, including the certification against forum shopping, shall be sufficient ground for the dismissal thereof. The same rule applies to certifications against forum shopping signed by a person on behalf of a corporation which are unaccompanied by proof that said signatory is authorized to file a petition on behalf of the corporation. In certain exceptional circumstances, however, the Court has allowed the belated filing of the certification. In Loyola v. Court of Appeals, et al. (245 SCRA 477 [1995]), the Court considered the filing of the certification one day after the filing of an election protest as substantial compliance with the requirement. In Roadway Express, Inc. v. Court of Appeals, et al. (264 SCRA 696 [1996]), the Court allowed the filing of the certification 14 days before the dismissal of the petition. In Uy v. Landbank, supra, the Court had dismissed Uys petition for lack of verification and certification against non-forum shopping. However, it subsequently reinstated the petition after Uy submitted a motion to admit certification and non-forum shopping certification. In all these cases, there were special circumstances or compelling reasons that justified the relaxation of the rule requiring verification and certification on non-forum shopping. In the instant case, the merits of petitioners case should be considered special circumstances or compelling reasons that justify tempering the requirement in regard to the certificate of non-forum shopping. Moreover, in Loyola, Roadway, and Uy, the Court excused non-compliance with the requirement as to the certificate of non-forum shopping. With more reason should we allow the instant petition since petitioner herein did submit a certification on non-forum shopping, failing only to show proof that the signatory was authorized to do so. That petitioner subsequently submitted a secretarys certificate attesting that Balbin was authorized to file an action on behalf of petitioner likewise mitigates this oversight. It must also be kept in mind that while the requirement of the certificate of non-forum shopping is mandatory, nonetheless the requirements must not be interpreted too literally and thus defeat the objective of preventing the undesirable practice of forum-shopping. Lastly, technical rules of procedure should be used to promote, not frustrate justice. While the swift unclogging of court dockets is a laudable objective, the granting of substantial justice is an even more urgent ideal. In Uy v. Land Bank of the Philippines,19 we, likewise, considered the apparent merits of the substantive aspect of the case as a special circumstance or compelling reason for the reinstatement of the case, and invoked our power to suspend our rules to serve the ends of justice. Thus: The admission of the petition after the belated filing of the certification, therefore, is not unprecedented. In those cases where the Court excused non-compliance with the requirements, there were special circumstances or compelling reasons making the strict application of the rule clearly unjustified. In the case at bar, the apparent merits of the substantive aspects of the case should be deemed as a "special circumstance" or "compelling reason" for the reinstatement of the petition. x x x There were even cases where we held that there was complete non-compliance with the rule on certification against forum shopping, but we still proceeded to decide the case on the merits. In De Guia v. De Guia,20petitioners raised in their Petition for Review the allowance of respondents Appeal Brief which did not contain a certificate against forum shopping. We held therein that:

With regard to the absence of a certification of non-forum shopping, substantial justice behooves us to agree with the disquisition of the appellate court. We do not condone the shortcomings of respondents counsel, but we simply cannot ignore the merits of their claim. Indeed, it has been held that "[i]t is within the inherent power of the Court to suspend its own rules in a particular case in order to do justice." In Damasco v. National Labor Relations Commission,21 the non-compliance was disregarded because of the principle of social justice, which is equally applicable to the case at bar: We note that both petitioners did not comply with the rule on certification against forum shopping. The certifications in their respective petitions were executed by their lawyers, which is not correct. The certification of non-forum shopping must be by the petitioner or a principal party and not the attorney. This procedural lapse on the part of petitioners could have warranted the outright dismissal of their actions. But, the court recognizes the need to resolve these two petitions on their merits as a matter of social justice involving labor and capital. After all, technicality should not be allowed to stand in the way of equitably and completely resolving herein the rights and obligations of these parties. Moreover, we must stress that technical rules of procedure in labor cases are not to be strictly applied if the result would be detrimental to the working woman. The foregoing cases show that, even if we assume for the sake of argument that there was violation of Rule 7, Section 5 of the 1997 Rules of Civil Procedure, a relaxation of such rule would be justified for two compelling reasons: social justice considerations and the apparent merit of the Petition, as shall be heretofore discussed. Certificates of Title issued pursuant to Emancipation Patents are as indefeasible as TCTs issued in registration proceedings. Petitioners claim that the EPs have become indefeasible upon the expiration of one year from the date of its issuance. The DARAB, however, ruled that the EP "is a title issued through the agrarian reform program of the government. Its issuance, correction and cancellation is governed by the rules and regulations issued by the Secretary of the Department of Agrarian Reform (DAR). Hence, it is not the same as or in the same category of a Torrens title." The DARAB is grossly mistaken. Ybaez v. Intermediate Appellate Court,22 provides that certificates of title issued in administrative proceedings are as indefeasible as certificates of title issued in judicial proceedings: It must be emphasized that a certificate of title issued under an administrative proceeding pursuant to a homestead patent, as in the instant case, is as indefeasible as a certificate of title issued under a judicial registration proceeding, provided the land covered by said certificate is a disposable public land within the contemplation of the Public Land Law. There is no specific provision in the Public Land Law (C.A. No. 141, as amended) or the Land Registration Act (Act 496), now P.D. 1529, fixing the one (1) year period within which the public land patent is open to review on the ground of actual fraud as in Section 38 of the Land Registration Act, now Section 32 of P.D. 1529, and clothing a public land patent certificate of title with indefeasibility. Nevertheless, the pertinent pronouncements in the aforecited cases clearly reveal that Section 38 of the Land Registration Act, now Section 32 of P.D. 1529 was applied by implication by this Court to the patent issued by the Director of Lands duly approved by the Secretary of Natural Resources, under the signature of the President of the Philippines in accordance with law. The date of issuance of the patent, therefore, corresponds to the date of the issuance of the decree in ordinary registration cases because the decree finally awards the land applied for registration to the party entitled to it, and the patent issued by the Director of Lands equally and finally grants, awards, and conveys the land applied for to the applicant. This, to our mind, is in consonance with the intent and spirit of the homestead laws, i.e. conservation of a family home, and to encourage the settlement, residence and cultivation and improvement of the lands of the public domain. If the title to the land grant in favor of the homesteader would be subjected to inquiry, contest and decision after it has been given by the Government through the process of proceedings in accordance with the Public Land Law, there would arise uncertainty, confusion and suspicion on the governments system of distributing public agricultural lands pursuant to the "Land for the Landless" policy of the State. The same confusion, uncertainty and suspicion on the distribution of government-acquired lands to the landless would arise if the possession of the grantee of an EP would still be subject to contest, just because his certificate of title was issued in an administrative proceeding. The silence of Presidential Decree No. 27 as to the indefeasibility of titles issued pursuant thereto is the same as that in the Public Land Act where Prof. Antonio Noblejas commented: Inasmuch as there is no positive statement of the Public Land Law, regarding the titles granted thereunder, such silence should be construed and interpreted in favor of the homesteader who come into the possession of his homestead after complying with the requirements thereof. Section 38 of the Land Registration Law should be interpreted to apply by

implication to the patent issued by the Director of Lands, duly approved by the Minister of Natural Resources, under the signature of the President of the Philippines, in accordance with law.23 After complying with the procedure, therefore, in Section 105 of Presidential Decree No. 1529, otherwise known as the Property Registration Decree (where the DAR is required to issue the corresponding certificate of title after granting an EP to tenant-farmers who have complied with Presidential Decree No. 27), 24 the TCTs issued to petitioners pursuant to their EPs acquire the same protection accorded to other TCTs. "The certificate of title becomes indefeasible and incontrovertible upon the expiration of one year from the date of the issuance of the order for the issuance of the patent, x x x. Lands covered by such title may no longer be the subject matter of a cadastral proceeding, nor can it be decreed to another person."25 As we held through Justice J.B.L. Reyes in Lahora v. Dayanghirang, Jr.26 : The rule in this jurisdiction, regarding public land patents and the character of the certificate of title that may be issued by virtue thereof, is that where land is granted by the government to a private individual, the corresponding patent therefor is recorded, and the certificate of title is issued to the grantee; thereafter, the land is automatically brought within the operation of the Land Registration Act, the title issued to the grantee becoming entitled to all the safeguards provided in Section 38 of the said Act. In other words, upon expiration of one year from its issuance, the certificate of title shall become irrevocable and indefeasible like a certificate issued in a registration proceeding. (Emphasis supplied.) The EPs themselves, like the Certificates of Land Ownership Award (CLOAs) in Republic Act No. 6657 (the Comprehensive Agrarian Reform Law of 1988), are enrolled in the Torrens system of registration. The Property Registration Decree in fact devotes Chapter IX27 on the subject of EPs. Indeed, such EPs and CLOAs are, in themselves, entitled to be as indefeasible as certificates of title issued in registration proceedings. The only defense of respondents, that the issue of indefeasibility of title was raised for the first time on appeal with the DARAB, does not hold water because said issue was already raised before the RARAD.28 The recommendation of the Hacienda Maria Action Team to have the EPs cancelled and the lots covered under the Republic Act No. 6657,29 with the farmer-beneficiaries later on being issued with CLOAs, would only delay the application of agrarian reform laws to the disputed 277.5008 hectares, leading to the expenditure of more time and resources of the government. The unreasonable delay of HMI in filing the Petition for cancellation more than 20 years after the alleged wrongful annotation of the Deed of Assignment in OCT No. P-3077-1661, and more than ten years after the issuance of the TCTs to the farmers, is apparently motivated by its desire to receive a substantially higher valuation and just compensation should the disputed 277.5008 hectares be covered under Republic Act No. 6657 instead of Presidential Decree No. 27.30 This is further proved by the following uncontested allegations by petitioners: (i) HMI neither asked for rentals nor brought any action to oust petitioners from the farm they were cultivating; (ii) HMI had not paid realty taxes on the disputed property from 1972 onwards and never protested petitioners act of declaring the same for realty taxation; (iii) HMI, represented by a certain Angela Colmenares, signed the LTPA covering the entire landholdings or the area of 527.8308 hectares, which was then represented to be rice and corn lands; (iv) HMI abandoned the entire landholdings after executing the Deed of Assignment of Rights in 1977. WHEREFORE, the Resolutions of the Court of Appeals in CA-G.R. SP No. 73902 are REVERSED and SET ASIDE. The following EPs and the corresponding TCTs issued to petitioners or to their successors-in-interest are hereby declared VALID and SUBSISTING:

Original Grantees 1. SAMUEL ESTRIBILLO 2. CALIXTO P. ABAYATO, JR. 3. RONGIE D. AGUILAR 4. TACIANA D. AGUILAR

TCT/EP Nos. TCT No. T-287/EP No. A-037675 TCT No. T-297/EP No. A-037814 TCT No. T-829/EP No. A-027293 TCT No. T-913/EP No. A-027295 TCT No. T-944/EP No. A-027296

5. ARTEMIO G. DE JUAN, 6. ESTANISLAO DELA CRUZ, SR. 7. EDGAR DUENAS 8. MARIO P. ERIBAL 9. REYNALDO C. ESENCIA 10. RUBEN A. IBOJO 11. SAMUEL JAMANDRE 12. HILARION V. LANTIZA 13. ANSELMO LOPEZ 14. TERESITA NACION 15. CHARIE E. NASTOR 16. NELSON L. NULLAS 17. CARLITO S. OLIA 18. ROBERTO T.PATIO 19. ANTONIO P. ROCHA 20. FERNANDO C. RUFINO 21. PATERNO P. SAIN 22. CLAUSIO S. SAYSON 23. JOEMARIE VIBO 24. MANUEL S. GONZAGA 25. RAFAEL PATIO

TCT No. T-302/EP No. A-037809 TCT No. T-290/EP No. A-035676 TCT No. T-949/EP No. A-037658 TCT No. T-952/EP No. A-037836 TCT No. T-950/EP No. A-037844 TCT No. T-928/EP No. A-037873 TCT No. T-909/EP No. A-159348 TCT No. T-288/EP No. A-037674 TCT No. T-401/EP No. A-037825 TCT No. T-973/EP No. A-037840 TCT No. T-900/EP No. A-037849 TCT No. T-825/EP No. A-037829 TCT No. T-396/EP No. A-037826 TCT No. T-910/EP No. A-037673 TCT No. T-912/EP No. A-037860 TCT No. T-914/EP No. A-037830 TCT No. T-923/EP No. A-037848 TCT No. T-954/EP No. A-037813 TCT No. T-891/EP No. A-037880 TCT No. T-893/EP No. A-037827 TCT No. T-920/EP No. A-037832 TCT No. T-297/EP No. A-037861

Costs against respondent Hacienda Maria, Inc. SO ORDERED.

[G.R. No. 144225. June 17, 2003]

SPOUSES GODOFREDO ALFREDO and CARMEN LIMON ALFREDO, SPOUSES ARNULFO SAVELLANO and EDITHA B. SAVELLANO, DANTON D. MATAWARAN, SPOUSES DELFIN F. ESPIRITU, JR. and ESTELA S. ESPIRITU and ELIZABETH TUAZON, petitioners, vs. SPOUSES ARMANDO BORRAS and ADELIA LOBATON BORRAS, respondents. DECISION CARPIO, J.:

The Case

Before us is a petition for review assailing the Decision[1] of the Court of Appeals dated 26 November 1999 affirming the decision[2] of the Regional Trial Court of Bataan, Branch 4, in Civil Case No. DH-256-94. Petitioners also question the Resolution of the Court of Appeals dated 26 July 2000 denying petitioners motion for reconsideration.

The Antecedent Facts

A parcel of land measuring 81,524 square meters (Subject Land) in Barrio Culis, Mabiga, Hermosa, Bataan is the subject of controversy in this case. The registered owners of the Subject Land were petitioner spouses, Godofredo Alfredo (Godofredo) and Carmen Limon Alfredo (Carmen). The Subject Land is covered by Original Certificate of Title No. 284 (OCT No. 284) issued to Godofredo and Carmen under Homestead Patent No. V-69196. On 7 March 1994, the private respondents, spouses Armando Borras (Armando) and Adelia Lobaton Borras (Adelia), filed a complaint for specific performance against Godofredo and Carmen before the Regional Trial Court of Bataan, Branch 4. The case was docketed as Civil Case No. DH-256-94. Armando and Adelia alleged in their complaint that Godofredo and Carmen mortgaged the Subject Land for P7,000.00 with the Development Bank of the Philippines (DBP). To pay the debt, Carmen and Godofredo sold the Subject Land to Armando and Adelia for P15,000.00, the buyers to pay the DBP loan and its accumulated interest, and the balance to be paid in cash to the sellers. Armando and Adelia gave Godofredo and Carmen the money to pay the loan to DBP which signed the release of mortgage and returned the owners duplicate copy of OCT No. 284 to Godofredo and Carmen. Armando and Adelia subsequently paid the balance of the purchase price of the Subject Land for which Carmen issued a receipt dated 11 March 1970. Godofredo and Carmen then delivered to Adelia the owners duplicate copy of OCT No. 284, with the document of cancellation of mortgage, official receipts of realty tax payments, and tax declaration in the name of Godofredo. Godofredo and Carmen introduced Armando and Adelia, as the new owners of the Subject Land, to the Natanawans, the old tenants of the Subject Land. Armando and Adelia then took possession of the Subject Land. In January 1994, Armando and Adelia learned that hired persons had entered the Subject Land and were cutting trees under instructions of allegedly new owners of the Subject Land. Subsequently, Armando and Adelia discovered that Godofredo and Carmen had re-sold portions of the Subject Land to several persons. On 8 February 1994, Armando and Adelia filed an adverse claim with the Register of Deeds of Bataan. Armando and Adelia discovered that Godofredo and Carmen had secured an owners duplicate copy of OCT No. 284 after filing a petition in court for the issuance of a new copy. Godofredo and Carmen claimed in their petition that they lost their owners duplicate copy. Armando and Adelia wrote Godofredo and Carmen complaining about their acts, but the latter did not reply. Thus, Armando and Adelia filed a complaint for specific performance. On 28 March 1994, Armando and Adelia amended their complaint to include the following persons as additional defendants: the spouses Arnulfo Savellano and Editha B. Savellano, Danton D. Matawaran, the spouses Delfin F. Espiritu, Jr. and Estela S. Espiritu, and Elizabeth Tuazon (Subsequent Buyers). The Subsequent Buyers, who are also petitioners in this case, purchased from Godofredo and Carmen the subdivided portions of the Subject Land. The Register of Deeds of Bataan issued to the Subsequent Buyers transfer certificates of title to the lots they purchased. In their answer, Godofredo and Carmen and the Subsequent Buyers (collectively petitioners) argued that the action is unenforceable under the Statute of Frauds. Petitioners pointed out that there is no written instrument evidencing the alleged contract of sale over the Subject Land in favor of Armando and Adelia. Petitioners objected to whatever parole evidence Armando and Adelia introduced or offered on the alleged sale unless the same was in writing and subscribed by Godofredo. Petitioners asserted that the Subsequent Buyers were buyers in good faith and for value. As counterclaim, petitioners sought payment of attorneys fees and incidental expenses. Trial then followed. Armando and Adelia presented the following witnesses: Adelia, Jesus Lobaton, Roberto Lopez, Apolinario Natanawan, Rolando Natanawan, Tomas Natanawan, and Mildred Lobaton. Petitioners presented two witnesses, Godofredo and Constancia Calonso. On 7 June 1996, the trial court rendered its decision in favor of Armando and Adelia. The dispositive portion of the decision reads: WHEREFORE, premises considered, judgment is hereby rendered in favor of plaintiffs, the spouses Adelia Lobaton Borras and Armando F. Borras, and against the defendant-spouses Godofredo Alfredo and Carmen Limon Alfredo, spouses Arnulfo Sabellano and Editha B. Sabellano, spouses Delfin F. Espiritu, Jr. and Estela S. Espiritu, Danton D. Matawaran and Elizabeth Tuazon, as follows:

1.

Declaring the Deeds of Absolute Sale of the disputed parcel of land (covered by OCT No. 284) executed by the spouses Godofredo Alfredo and Camen Limon Alfredo in favor of spouses Arnulfo Sabellano and Editha B. Sabellano, spouses Delfin F. Espiritu, Danton D. Matawaran and Elizabeth Tuazon, as null and void; Declaring the Transfer Certificates of Title Nos. T-163266 and T-163267 in the names of spouses Arnulfo Sabellano and Editha B. Sabellano; Transfer Certificates of Title Nos. T-163268 and 163272 in the names of spouses Delfin F. Espiritu, Jr. and Estela S. Espiritu; Transfer Certificates of Title Nos. T-163269 and T-163271 in the name of Danton D. Matawaran; and Transfer Certificate of Title No. T-163270 in the name of Elizabeth Tuazon, as null and void and that the Register of Deeds of Bataan is hereby ordered to cancel said titles; Ordering the defendant-spouses Godofredo Alfredo and Carmen Limon Alfredo to execute and deliver a good and valid Deed of Absolute Sale of the disputed parcel of land (covered by OCT No. 284) in favor of the spouses Adelia Lobaton Borras and Armando F. Borras within a period of ten (10) days from the finality of this decision; Ordering defendant-spouses Godofredo Alfredo and Carmen Limon Alfredo to surrender their owners duplicate copy of OCT No. 284 issued to them by virtue of the Order dated May 20, 1992 of the Regional Trial Court of Bataan, Dinalupihan Branch, to the Registry of Deeds of Bataan within ten (10) days from the finality of this decision, who, in turn, is directed to cancel the same as there exists in the possession of herein plaintiffs of the owners duplicate copy of said OCT No. 284 and, to restore and/or reinstate OCT No. 284 of the Register of Deeds of Bataan to its full force and effect; Ordering the defendant-spouses Godofredo Alfredo and Carmen Limon Alfredo to restitute and/or return the amount of the respective purchase prices and/or consideration of sale of the disputed parcels of land they sold to their co-defendants within ten (10) days from the finality of this decision with legal interest thereon from date of the sale; Ordering the defendants, jointly and severally, to pay plaintiff-spouses the sum of P20,000.00 as and for attorneys fees and litigation expenses; and Ordering defendants to pay the costs of suit.

2.

3.

4.

5.

6.

7.

Defendants counterclaims are hereby dismissed for lack of merit. SO ORDERED.[3] Petitioners appealed to the Court of Appeals. On 26 November 1999, the Court of Appeals issued its Decision affirming the decision of the trial court, thus: WHEREFORE, premises considered, the appealed decision in Civil Case No. DH-256-94 is hereby AFFIRMED in its entirety. Treble costs against the defendants-appellants. SO ORDERED.[4] On 26 July 2000, the Court of Appeals denied petitioners motion for reconsideration.

The Ruling of the Trial Court

The trial court ruled that there was a perfected contract of sale between the spouses Godofredo and Carmen and the spouses Armando and Adelia. The trial court found that all the elements of a contract of sale were present in this case. The object of the sale was specifically identified as the 81,524-square meter lot in Barrio Culis, Mabigas, Hermosa, Bataan, covered by OCT No. 284 issued by the Registry of Deeds of Bataan. The purchase price was fixed at P15,000.00, with the buyers assuming to pay the sellers P7,000.00 DBP mortgage loan including its accumulated interest. The balance of the purchase price was to be paid in cash to the sellers. The last payment of P2,524.00 constituted the full settlement of the purchase price and this was paid on 11 March 1970 as evidenced by the receipt issued by Carmen.

The trial court found the following facts as proof of a perfected contract of sale: (1) Godofredo and Carmen delivered to Armando and Adelia the Subject Land; (2) Armando and Adelia treated as their own tenants the tenants of Godofredo and Carmen; (3) Godofredo and Carmen turned over to Armando and Adelia documents such as the owners duplicate copy of the title of the Subject Land, tax declaration, and the receipts of realty tax payments in the name of Godofredo; and (4) the DBP cancelled the mortgage on the Subject Property upon payment of the loan of Godofredo and Carmen. Moreover, the receipt of payment issued by Carmen served as an acknowledgment, if not a ratification, of the verbal sale between the sellers and the buyers. The trial court ruled that the Statute of Frauds is not applicable because in this case the sale was perfected. The trial court concluded that the Subsequent Buyers were not innocent purchasers. Not one of the Subsequent Buyers testified in court on how they purchased their respective lots. The Subsequent Buyers totally depended on the testimony of Constancia Calonso (Calonso) to explain the subsequent sale. Calonso, a broker, negotiated with Godofredo and Carmen the sale of the Subject Land which Godofredo and Carmen subdivided so they could sell anew portions to the Subsequent Buyers. Calonso admitted that the Subject Land was adjacent to her own lot. The trial court pointed out that Calonso did not inquire on the nature of the tenancy of the Natanawans and on who owned the Subject Land. Instead, she bought out the tenants for P150,000.00. The buy out was embodied in a Kasunduan. Apolinario Natanawan (Apolinario) testified that he and his wife accepted the money and signed the Kasunduan because Calonso and the Subsequent Buyers threatened them with forcible ejectment. Calonso brought Apolinario to the Agrarian Reform Office where he was asked to produce the documents showing that Adelia is the owner of the Subject Land. Since Apolinario could not produce the documents, the agrarian officer told him that he would lose the case. Thus, Apolinario was constrained to sign the Kasunduan and accept the P150,000.00. Another indication of Calonsos bad faith was her own admission that she saw an adverse claim on the title of the Subject Land when she registered the deeds of sale in the names of the Subsequent Buyers. Calonso ignored the adverse claim and proceeded with the registration of the deeds of sale. The trial court awarded P20,000.00 as attorneys fees to Armando and Adelia. In justifying the award of attorneys fees, the trial court invoked Article 2208 (2) of the Civil Code which allows a court to award attorneys fees, including litigation expenses, when it is just and equitable to award the same. The trial court ruled that Armando and Adelia are entitled to attorneys fees since they were compelled to file this case due to petitioners refusal to heed their just and valid demand.

The Ruling of the Court of Appeals

The Court of Appeals found the factual findings of the trial court well supported by the evidence. Based on these findings, the Court of Appeals also concluded that there was a perfected contract of sale and the Subsequent Buyers were not innocent purchasers. The Court of Appeals ruled that the handwritten receipt dated 11 March 1970 is sufficient proof that Godofredo and Carmen sold the Subject Land to Armando and Adelia upon payment of the balance of the purchase price. The Court of Appeals found the recitals in the receipt as sufficient to serve as the memorandum or note as a writing under the Statute of Frauds.[5] The Court of Appeals then reiterated the ruling of the trial court that the Statute of Frauds does not apply in this case. The Court of Appeals gave credence to the testimony of a witness of Armando and Adelia, Mildred Lobaton, who explained why the title to the Subject Land was not in the name of Armando and Adelia. Lobaton testified that Godofredo was then busy preparing to leave for Davao. Godofredo promised that he would sign all the papers once they were ready. Since Armando and Adelia were close to the family of Carmen, they trusted Godofredo and Carmen to honor their commitment. Armando and Adelia had no reason to believe that their contract of sale was not perfected or validly executed considering that they had received the duplicate copy of OCT No. 284 and other relevant documents. Moreover, they had taken physical possession of the Subject Land. The Court of Appeals held that the contract of sale is not void even if only Carmen signed the receipt dated 11 March 1970. Citing Felipe v. Heirs of Maximo Aldon,[6] the appellate court ruled that a contract of sale made by the wife without the husbands consent is not void but merely voidable. The Court of Appeals further declared that the sale in this case binds the conjugal partnership even if only the wife signed the receipt because the proceeds of the sale were used for the benefit of the conjugal partnership. The appellate court based this conclusion on Article 161[7] of the Civil Code. The Subsequent Buyers of the Subject Land cannot claim that they are buyers in good faith because they had constructive notice of the adverse claim of Armando and Adelia. Calonso, who brokered the subsequent sale, testified that when she registered the subsequent deeds of sale, the adverse claim of Armando and Adelia was already annotated on the title of the Subject Land. The Court of Appeals believed that the act of Calonso and the Subsequent Buyers in forcibly ejecting the Natanawans from the Subject Land buttresses the conclusion that the second sale was tainted with bad faith from the very beginning.

Finally, the Court of Appeals noted that the issue of prescription was not raised in the Answer. Nonetheless, the appellate court explained that since this action is actually based on fraud, the prescriptive period is four years, with the period starting to run only from the date of the discovery of the fraud. Armando and Adelia discovered the fraudulent sale of the Subject Land only in January 1994. Armando and Adelia lost no time in writing a letter to Godofredo and Carmen on 2 February 1994 and filed this case on 7 March 1994. Plainly, Armando and Adelia did not sleep on their rights or lose their rights by prescription. The Court of Appeals sustained the award of attorneys fees and imposed treble costs on petitioners.

The Issues

Petitioners raise the following issues: I Whether the alleged sale of the Subject Land in favor of Armando and Adelia is valid and enforceable, where (1) it was orally entered into and not in writing; (2) Carmen did not obtain the consent and authority of her husband, Godofredo, who was the sole owner of the Subject Land in whose name the title thereto (OCT No. 284) was issued; and (3) it was entered into during the 25-year prohibitive period for alienating the Subject Land without the approval of the Secretary of Agriculture and Natural Resources. II Whether the action to enforce the alleged oral contract of sale brought after 24 years from its alleged perfection had been barred by prescription and by laches. III Whether the deeds of absolute sale and the transfer certificates of title over the portions of the Subject Land issued to the Subsequent Buyers, innocent purchasers in good faith and for value whose individual titles to their respective lots are absolute and indefeasible, are valid. IV Whether petitioners are liable to pay Armando and Adelia P20,0000.00 as attorneys fees and litigation expenses and the treble costs, where the claim of Armando and Adelia is clearly unfounded and baseless. V Whether petitioners are entitled to the counterclaim for attorneys fees and litigation expenses, where they have sustained such expenses by reason of institution of a clearly malicious and unfounded action by Armando and Adelia.[8]

The Courts Ruling

The petition is without merit. In a petition for review on certiorari under Rule 45, this Court reviews only errors of law and not errors of facts.[9] The factual findings of the appellate court are generally binding on this Court. [10]This applies with greater force when both the trial court and the Court of Appeals are in complete agreement on their factual findings.[11] In this case, there is no reason to deviate from the findings of the lower courts. The facts relied upon by the trial and appellate courts are borne out by the record. We agree with the conclusions drawn by the lower courts from these facts.

Validity and Enforceability of the Sale

The contract of sale between the spouses Godofredo and Carmen and the spouses Armando and Adelia was a perfected contract. A contract is perfected once there is consent of the contracting parties on the object certain and on the cause of the obligation.[12] In the instant case, the object of the sale is the Subject Land, and the price certain is P15,000.00. The trial and appellate courts found that there was a meeting of the minds on the sale of the Subject Land and on the purchase price of P15,000.00. This is a finding of fact that is binding on this Court. We find no reason to disturb this finding since it is supported by substantial evidence. The contract of sale of the Subject Land has also been consummated because the sellers and buyers have performed their respective obligations under the contract. In a contract of sale, the seller obligates himself to transfer the ownership of the determinate thing sold, and to deliver the same, to the buyer who obligates himself to pay a price certain to the seller. [13] In the instant case, Godofredo and Carmen delivered the Subject Land to Armando and Adelia, placing the latter in actual physical possession of the Subject Land. This physical delivery of the Subject Land also constituted a transfer of ownership of the Subject Land to Armando and Adelia.[14] Ownership of the thing sold is transferred to the vendee upon its actual or constructive delivery.[15] Godofredo and Carmen also turned over to Armando and Adelia the documents of ownership to the Subject Land, namely the owners duplicate copy of OCT No. 284, the tax declaration and the receipts of realty tax payments. On the other hand, Armando and Adelia paid the full purchase price as evidenced by the receipt dated 11 March 1970 issued by Carmen. Armando and Adelia fulfilled their obligation to provide the P7,000.00 to pay the DBP loan of Godofredo and Carmen, and to pay the latter the balance of P8,000.00 in cash. The P2,524.00 paid under the receipt dated 11 March 1970 was the last installment to settle fully the purchase price. Indeed, upon payment to DBP of the P7,000.00 and the accumulated interests, the DBP cancelled the mortgage on the Subject Land and returned the owners duplicate copy of OCT No. 284 to Godofredo and Carmen. The trial and appellate courts correctly refused to apply the Statute of Frauds to this case. The Statute of Frauds[16] provides that a contract for the sale of real property shall be unenforceable unless the contract or some note or memorandum of the sale is in writing and subscribed by the party charged or his agent. The existence of the receipt dated 11 March 1970, which is a memorandum of the sale, removes the transaction from the provisions of the Statute of Frauds. The Statute of Frauds applies only to executory contracts and not to contracts either partially or totally performed. Thus, where one party has performed ones obligation, oral evidence will be admitted to prove the agreement.[18] In the instant case, the parties have consummated the sale of the Subject Land, with both sellers and buyers performing their respective obligations under the contract of sale. In addition, a contract that violates the Statute of Frauds is ratified by the acceptance of benefits under the contract.[19] Godofredo and Carmen benefited from the contract because they paid their DBP loan and secured the cancellation of their mortgage using the money given by Armando and Adelia. Godofredo and Carmen also accepted payment of the balance of the purchase price.
[17]

Godofredo and Carmen cannot invoke the Statute of Frauds to deny the existence of the verbal contract of sale because they have performed their obligations, and have accepted benefits, under the verbal contract. [20] Armando and Adelia have also performed their obligations under the verbal contract. Clearly, both the sellers and the buyers have consummated the verbal contract of sale of the Subject Land. The Statute of Frauds was enacted to prevent fraud.[21] This law cannot be used to advance the very evil the law seeks to prevent. Godofredo and Carmen also claim that the sale of the Subject Land to Armando and Adelia is void on two grounds. First, Carmen sold the Subject Land without the marital consent of Godofredo. Second, the sale was made during the 25-year period that the law prohibits the alienation of land grants without the approval of the Secretary of Agriculture and Natural Resources. These arguments are without basis. The Family Code, which took effect on 3 August 1988, provides that any alienation or encumbrance made by the husband of the conjugal partnership property without the consent of the wife is void. However, when the sale is made before the effectivity of the Family Code, the applicable law is the Civil Code.[22] Article 173 of the Civil Code provides that the disposition of conjugal property without the wifes consent is not void but merely voidable. Article 173 reads: The wife may, during the marriage, and within ten years from the transaction questioned, ask the courts for the annulment of any contract of the husband entered into without her consent, when such consent is required, or any act or contract of the husband which tends to defraud her or impair her interest in the conjugal partnership property. Should the wife fail to exercise this right, she or her heirs, after the dissolution of the marriage, may demand the value of property fraudulently alienated by the husband. In Felipe v. Aldon,[23] we applied Article 173 in a case where the wife sold some parcels of land belonging to the conjugal partnership without the consent of the husband. We ruled that the contract of sale was voidable subject to annulment by the husband. Following petitioners argument that Carmen sold the land to Armando and Adelia without the consent of Carmens husband, the sale would only be voidable and not void. However, Godofredo can no longer question the sale. Voidable contracts are susceptible of ratification.[24] Godofredo ratified the sale when he introduced Armando and Adelia to his tenants as the new owners of the Subject Land. The trial

court noted that Godofredo failed to deny categorically on the witness stand the claim of the complainants witnesses that Godofredo introduced Armando and Adelia as the new landlords of the tenants.[25] That Godofredo and Carmen allowed Armando and Adelia to enjoy possession of the Subject Land for 24 years is formidable proof of Godofredos acquiescence to the sale. If the sale was truly unauthorized, then Godofredo should have filed an action to annul the sale. He did not. The prescriptive period to annul the sale has long lapsed. Godofredos conduct belies his claim that his wife sold the Subject Land without his consent. Moreover, Godofredo and Carmen used most of the proceeds of the sale to pay their debt with the DBP. We agree with the Court of Appeals that the sale redounded to the benefit of the conjugal partnership. Article 161 of the Civil Code provides that the conjugal partnership shall be liable for debts and obligations contracted by the wife for the benefit of the conjugal partnership. Hence, even if Carmen sold the land without the consent of her husband, the sale still binds the conjugal partnership. Petitioners contend that Godofredo and Carmen did not deliver the title of the Subject Land to Armando and Adelia as shown by this portion of Adelias testimony on cross-examination: Q -- No title was delivered to you by Godofredo Alfredo? A -- I got the title from Julie Limon because my sister told me.[26] Petitioners raise this factual issue for the first time. The Court of Appeals could have passed upon this issue had petitioners raised this earlier. At any rate, the cited testimony of Adelia does not convincingly prove that Godofredo and Carmen did not deliver the Subject Land to Armando and Adelia. Adelias cited testimony must be examined in context not only with her entire testimony but also with the other circumstances. Adelia stated during cross-examination that she obtained the title of the Subject Land from Julie Limon (Julie), her classmate in college and the sister of Carmen. Earlier, Adelias own sister had secured the title from the father of Carmen. However, Adelias sister, who was about to leave for the United States, gave the title to Julie because of the absence of the other documents. Adelias sister told Adelia to secure the title from Julie, and this was how Adelia obtained the title from Julie. It is not necessary that the seller himself deliver the title of the property to the buyer because the thing sold is understood as delivered when it is placed in the control and possession of the vendee. [27] To repeat, Godofredo and Carmen themselves introduced the Natanawans, their tenants, to Armando and Adelia as the new owners of the Subject Land. From then on, Armando and Adelia acted as the landlords of the Natanawans. Obviously, Godofredo and Carmen themselves placed control and possession of the Subject Land in the hands of Armando and Adelia. Petitioners invoke the absence of approval of the sale by the Secretary of Agriculture and Natural Resources to nullify the sale. Petitioners never raised this issue before the trial court or the Court of Appeals. Litigants cannot raise an issue for the first time on appeal, as this would contravene the basic rules of fair play, justice and due process. [28] However, we will address this new issue to finally put an end to this case. The sale of the Subject Land cannot be annulled on the ground that the Secretary did not approve the sale, which was made within 25 years from the issuance of the homestead title. Section 118 of the Public Land Act (Commonwealth Act No. 141) reads as follows: SEC. 118. Except in favor of the Government or any of its branches, units, or institutions or legally constituted banking corporation, lands acquired under free patent or homestead provisions shall not be subject to encumbrance or alienation from the date of the approval of the application and for a term of five years from and after the date of the issuance of the patent or grant. xxx No alienation, transfer, or conveyance of any homestead after 5 years and before twenty-five years after the issuance of title shall be valid without the approval of the Secretary of Agriculture and Commerce, which approval shall not be denied except on constitutional and legal grounds. A grantee or homesteader is prohibited from alienating to a private individual a land grant within five years from the time that the patent or grant is issued.[29] A violation of this prohibition renders a sale void.[30] This prohibition, however, expires on the fifth year. From then on until the next 20 years[31] the land grant may be alienated provided the Secretary of Agriculture and Natural Resources approves the alienation. The Secretary is required to approve the alienation unless there are constitutional and legal grounds to deny the approval. In this case, there are no apparent constitutional or legal grounds for the Secretary to disapprove the sale of the Subject Land. The failure to secure the approval of the Secretary does not ipso facto make a sale void.[32] The absence of approval by the Secretary does not nullify a sale made after the expiration of the 5-year period, for in such event the requirement of Section 118 of the Public Land Act becomes merely directory[33] or a formality.[34] The approval may be secured later, producing the effect of ratifying and adopting the transaction as if the sale had been previously authorized. [35] As held in Evangelista v. Montano:[36]

Section 118 of Commonwealth Act No. 141, as amended, specifically enjoins that the approval by the Department Secretary "shall not be denied except on constitutional and legal grounds." There being no allegation that there were constitutional or legal impediments to the sales, and no pretense that if the sales had been submitted to the Secretary concerned they would have been disapproved, approval was a ministerial duty, to be had as a matter of course and demandable if refused. For this reason, and if necessary, approval may now be applied for and its effect will be to ratify and adopt the transactions as if they had been previously authorized. (Emphasis supplied)

Action Not Barred by Prescription and Laches

Petitioners insist that prescription and laches have set in. We disagree. The Amended Complaint filed by Armando and Adelia with the trial court is captioned as one for Specific Performance. In reality, the ultimate relief sought by Armando and Adelia is the reconveyance to them of the Subject Land. An action for reconveyance is one that seeks to transfer property, wrongfully registered by another, to its rightful and legal owner.[37] The body of the pleading or complaint determines the nature of an action, not its title or heading.[38] Thus, the present action should be treated as one for reconveyance.[39] Article 1456 of the Civil Code provides that a person acquiring property through fraud becomes by operation of law a trustee of an implied trust for the benefit of the real owner of the property. The presence of fraud in this case created an implied trust in favor of Armando and Adelia. This gives Armando and Adelia the right to seek reconveyance of the property from the Subsequent Buyers.[40] To determine when the prescriptive period commenced in an action for reconveyance, plaintiffs possession of the disputed property is material. An action for reconveyance based on an implied trust prescribes in ten years. [41] The ten-year prescriptive period applies only if there is an actual need to reconvey the property as when the plaintiff is not in possession of the property.[42]However, if the plaintiff, as the real owner of the property also remains in possession of the property, the prescriptive period to recover title and possession of the property does not run against him. [43] In such a case, an action for reconveyance, if nonetheless filed, would be in the nature of a suit for quieting of title, an action that is imprescriptible.[44] In this case, the appellate court resolved the issue of prescription by ruling that the action should prescribe four years from discovery of the fraud. We must correct this erroneous application of the four-year prescriptive period. In Caro v. Court of Appeals,[45] we explained why an action for reconveyance based on an implied trust should prescribe in ten years. In that case, the appellate court also erroneously applied the four-year prescriptive period. We declared in Caro: We disagree. The case of Liwalug Amerol, et al. v. Molok Bagumbaran, G.R. No. L-33261, September 30, 1987,154 SCRA 396 illuminated what used to be a gray area on the prescriptive period for an action to reconvey the title to real property and, corollarily, its point of reference: xxx It must be remembered that before August 30, 1950, the date of the effectivity of the new Civil Code, the old Code of Civil Procedure (Act No. 190) governed prescription. It provided: SEC. 43. Other civil actions; how limited.- Civil actions other than for the recovery of real property can only be brought within the following periods after the right of action accrues: xxx xxx xxx

3. Within four years: xxx An action for relief on the ground of fraud, but the right of action in such case shall not be deemed to have accrued until the discovery of the fraud; xxx xxx xxx

In contrast, under the present Civil Code, we find that just as an implied or constructive trust is an offspring of the law (Art. 1456, Civil Code), so is the corresponding obligation to reconvey the property and the title thereto in favor of the true owner. In this context, and vis-a-vis prescription, Article 1144 of the Civil Code is applicable. Article 1144. The following actions must be brought within ten years from the time the right of action accrues: (1) (2) Upon a written contract; Upon an obligation created by law;

(3) xxx

Upon a judgment. xxx xxx

(Emphasis supplied). An action for reconveyance based on an implied or constructive trust must perforce prescribe in ten years and not otherwise. A long line of decisions of this Court, and of very recent vintage at that, illustrates this rule. Undoubtedly, it is now well-settled that an action for reconveyance based on an implied or constructive trust prescribes in ten years from the issuance of the Torrens title over the property. The only discordant note, it seems, is Balbin vs. Medalla which states that the prescriptive period for a reconveyance action is four years. However, this variance can be explained by the erroneous reliance on Gerona vs. de Guzman. But in Gerona, the fraud was discovered on June 25,1948, hence Section 43(3) of Act No. 190, was applied, the new Civil Code not coming into effect until August 30, 1950 as mentioned earlier. It must be stressed, at this juncture, that article 1144 and article 1456, are new provisions. They have no counterparts in the old Civil Code or in the old Code of Civil Procedure, the latter being then resorted to as legal basis of the four-year prescriptive period for an action for reconveyance of title of real property acquired under false pretenses. An action for reconveyance has its basis in Section 53, paragraph 3 of Presidential Decree No. 1529, which provides: In all cases of registration procured by fraud, the owner may pursue all his legal and equitable remedies against the parties to such fraud without prejudice, however, to the rights of any innocent holder of the decree of registration on the original petition or application, xxx This provision should be read in conjunction with Article 1456 of the Civil Code, which provides: Article 1456. If property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes. The law thereby creates the obligation of the trustee to reconvey the property and the title thereto in favor of the true owner. Correlating Section 53, paragraph 3 of Presidential Decree No. 1529 and Article 1456 of the Civil Code with Article 1144(2) of the Civil Code, supra, the prescriptive period for the reconveyance of fraudulently registered real property is ten (10) years reckoned from the date of the issuance of the certificate of title xxx (Emphasis supplied)[46] Following Caro, we have consistently held that an action for reconveyance based on an implied trust prescribes in ten years.[47] We went further by specifying the reference point of the ten-year prescriptive period as the date of the registration of the deed or the issuance of the title.[48] Had Armando and Adelia remained in possession of the Subject Land, their action for reconveyance, in effect an action to quiet title to property, would not be subject to prescription. Prescription does not run against the plaintiff in actual possession of the disputed land because such plaintiff has a right to wait until his possession is disturbed or his title is questioned before initiating an action to vindicate his right.[49] His undisturbed possession gives him the continuing right to seek the aid of a court of equity to determine the nature of the adverse claim of a third party and its effect on his title.[50] Armando and Adelia lost possession of the Subject Land when the Subsequent Buyers forcibly drove away from the Subject Land the Natanawans, the tenants of Armando and Adelia.[51] This created an actual need for Armando and Adelia to seek reconveyance of the Subject Land. The statute of limitation becomes relevant in this case. The ten-year prescriptive period started to run from the date the Subsequent Buyers registered their deeds of sale with the Register of Deeds. The Subsequent Buyers bought the subdivided portions of the Subject Land on 22 February 1994, the date of execution of their deeds of sale. The Register of Deeds issued the transfer certificates of title to the Subsequent Buyers on 24 February 1994. Armando and Adelia filed the Complaint on 7 March 1994. Clearly, prescription could not have set in since the case was filed at the early stage of the ten-year prescriptive period. Neither is the action barred by laches. We have defined laches as the failure or neglect, for an unreasonable time, to do that which, by the exercise of due diligence, could or should have been done earlier. [52] It is negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it.[53] Armando and Adelia discovered in January 1994 the subsequent sale of the Subject Land and they filed this case on 7 March 1994. Plainly, Armando and Adelia did not sleep on their rights.

Validity of Subsequent Sale of Portions of the Subject Land

Petitioners maintain that the subsequent sale must be upheld because the Subsequent Buyers, the co-petitioners of Godofredo and Carmen, purchased and registered the Subject Land in good faith. Petitioners argue that the testimony of Calonso, the person who brokered the second sale, should not prejudice the Subsequent Buyers. There is no evidence that Calonso was the agent of the Subsequent Buyers and that she communicated to them what she knew about the adverse claim and the prior sale. Petitioners assert that the adverse claim registered by Armando and Adelia has no legal basis to render defective the transfer of title to the Subsequent Buyers. We are not persuaded. Godofredo and Carmen had already sold the Subject Land to Armando and Adelia. The settled rule is when ownership or title passes to the buyer, the seller ceases to have any title to transfer to any third person. [54] If the seller sells the same land to another, the second buyer who has actual or constructive knowledge of the prior sale cannot be a registrant in good faith.[55] Such second buyer cannot defeat the first buyers title.[56] In case a title is issued to the second buyer, the first buyer may seek reconveyance of the property subject of the sale.[57] Thus, to merit protection under the second paragraph of Article 1544[58] of the Civil Code, the second buyer must act in good faith in registering the deed.[59] In this case, the Subsequent Buyers good faith hinges on whether they had knowledge of the previous sale. Petitioners do not dispute that Armando and Adelia registered their adverse claim with the Registry of Deeds of Bataan on 8 February 1994. The Subsequent Buyers purchased their respective lots only on 22 February 1994 as shown by the date of their deeds of sale. Consequently, the adverse claim registered prior to the second sale charged the Subsequent Buyers with constructive notice of the defect in the title of the sellers,[60] Godofredo and Carmen. It is immaterial whether Calonso, the broker of the second sale, communicated to the Subsequent Buyers the existence of the adverse claim. The registration of the adverse claim on 8 February 1994 constituted, by operation of law, notice to the whole world.[61] From that date onwards, the Subsequent Buyers were deemed to have constructive notice of the adverse claim of Armando and Adelia. When the Subsequent Buyers purchased portions of the Subject Land on 22 February 1994, they already had constructive notice of the adverse claim registered earlier.[62]Thus, the Subsequent Buyers were not buyers in good faith when they purchased their lots on 22 February 1994. They were also not registrants in good faith when they registered their deeds of sale with the Registry of Deeds on 24 February 1994. The Subsequent Buyers individual titles to their respective lots are not absolutely indefeasible. The defense of indefeasibility of the Torrens Title does not extend to a transferee who takes the certificate of title with notice of a flaw in his title.[63] The principle of indefeasibility of title does not apply where fraud attended the issuance of the titles as in this case.[64]

Attorneys Fees and Costs

We sustain the award of attorneys fees. The decision of the court must state the grounds for the award of attorneys fees. The trial court complied with this requirement. [65] We agree with the trial court that if it were not for petitioners unjustified refusal to heed the just and valid demands of Armando and Adelia, the latter would not have been compelled to file this action. The Court of Appeals echoed the trial courts condemnation of petitioners fraudulent maneuverings in securing the second sale of the Subject Land to the Subsequent Buyers. We will also not turn a blind eye on petitioners brazen tactics. Thus, we uphold the treble costs imposed by the Court of Appeals on petitioners. WHEREFORE, the petition is DENIED and the appealed decision is AFFIRMED. Treble costs against petitioners. SO ORDERED.

G.R. No. 115788 September 17, 1998 SPS. SONYA & ISMAEL MATHAY, JR., petitioners, vs. HON. COURT OF APPEALS, SPS. TEODULFO & SYLVIA ATANGAN, SPS. AGUSTINA & AMOR POBLETE, SPS. EDUARDO & FELICISIMA TIRONA, respondents. PURISIMA, J.: At bar is a Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court, seeking to set aside the Decision 1of the Court of Appeal 2 dated November 18, 1993 in CA-G.R. CV No. 37902, reversing the Decision 3 dated March 30, 1992 in Civil Case Nos. TM-175, 180 and 206 of Branch 23, 4 Regional Trial Court of Trece Martines City, Province of Cavite. The antecedent facts which gave rise to private respondents' complaints are summarized in the Decision of the lower court, as follows: Civil Case No. TM-175 entitled "Spouses Teodulfo T. Atangan and Silva [sic] L. Atangan vs. Spouses Sonya Mathay and Ismael Mathay, Jr., and the Register of Deeds of Cavite," involves (2) [sic] parcels of land situated in Tanza, Cavite, covered by Transfer Certificate of Title Nos. T-195350 covering Lot No. 2186-A, issued by the Office of the Register of Deeds of Cavite in the name of Spouses Teodulfo T. Atangan and Silvia [sic] L. Atangan, and TCT No. T-195351, covering Lot No. 2186-C, issued in the name of Silvia [sic] L. Atangan and Teodulfo T. Atangan, on July 24 1985. PLAINTIFFS allege that: 1) they are the registered owners of two (2) parcels of land situated in Tanza, Cavite having purchased the same from Spouses Tomas Lucido and Eustaquia Villanueva as evidenced by a Deed of Sale; 2) they were issued TCT Nos. T-195350 and T-195351; 3) the vendors, spouses Tomas Lucido and Eustaquia Villanueva were also issued TCT Nos. T-192527 and T-192529 by the Register of Deeds of Cavite, which were cancelled in favor of the plaintiffs; 4) vendors' titles which were transferred to plaintiffs were obtained by virtue of the decisions in Civil Case No. NC-709 entitled Tomas Lucido vs. Juana Onate Batallones and Petronilla C. Quimio, Director of Lands, and Registers (sic) of Deeds of Cavite; 5) the heirs of Onofre Batallones and Norberto Quimio are the vendees of the said lands from the Bureau of Lands as evidenced by a Certification issued by Adelwisa P. Onga, (sic) Record Officer of the District Land Office of Trece Martires City; 6) the sale of the said parcels of land from the Bureau of Lands in favor of the heirs of Batallones and Quimio was also evidenced by a Deed of Conveyance duly issued by Bureau of Lands; 7) from the time they obtained titles of the two parcels of land [they] have taken possession and paid the corresponding realty property taxes; 8) defendants have enclosed a portion of said property with a fence and occupied 23,800 square meters without the consent and will of plaintiffs; 9) plaintiffs have learned that defendants as vendees have also issued title covering the same land in the name of the plaintiffs under TCT No. T-113047; 10) the titles issued to defendants was (sic) the product of forgery because it was based on an alleged TCT No. T-3444 in favor of Pedro Banayo and Pablo Pugay of Trece Martires City who have no right whatsoever on the real estate in question; 11) upon investigation, it was certified by the Bureau of Lands that the said titles were falsified and forged because alleged Deed No. V-12918 was issued to one Jack C. Callado for Lot 18, Block 56, Tala Estate situated in Caloocan City and there was no record in the Bureau of Lands that Deed No. V-12918 was issued for Lot 2886, S.C. Malabon Estate, Cavite in favor of Pedro Banayo and Pablo Pugay from whom defendants have allegedly acquired title over the said property; 12) considering that the title of the defendants have no basis in law and fact and that the same was illegally, unlawfully and maliciously issued by the Register of Deeds on the basis of forged and falsified and none [sic] existing documents as basis for the issuance thereof, the same may be cancelled and defendants have no right to take possession of the real properties thereon including the portion pertaining to the herein plaintiffs consisting of 23,800 square meters, more or less; 13) in view of bad faith, illegal and unlawful actuations of the defendants in obtaining titles over the property in question thru forged and falsified documents, plaintiffs suffered sleepless nights, anxiety, mental anguish for which they are entitled to claim for moral damages in the sum of P100,000.00; 14) despite repeated demands from the plaintiffs for the defendants (sic) to desist from enclosing the titled property with a fence, the latter without any lawful right insisted and actually closed their property with a fence, causing irreparable damage and prejudice to the plaintiffs; 15) in view of the illegal, unlawful, malicious and bad faith of the defendants and in disregard of the rights of the plaintiffs, the latter are constrained to hire the services of counsel for which they agreed to pay the sum of P50,000.00 in addition to the appearance fee of P500.00 every hearing of his case. xxx xxx xxx Involved in Civil Case No. TM-180 entitled Sps. Agustina Poblete and Amor Poblete vs. Sps. Sonya Mathay and Ismael Mathay, Jr., and the Register of Deeds of Cavite for Annulment of Titles and Recovery of Possession, is a parcel of land situated in Tanza, Cavite, covered by Transfer Certificate of Title Nos. T-

192532 registered in the name of Juana Batallones and Gaudencio Quimio which was allegedly sold to the herein plaintiff, as per "Deed of Conditional Sale" dated December 28, 1987. PLAINTIFFS allege that: 1) Plaintiffs are the registered owners of a parcel of land situated in Tanza, Cavite having purchased the same from Juana Batallones and Gaudencio Quimio for themselves and on behalf of their co-heirs as evidenced by Deed of Sale; 2) Plaintiffs-predecessors-in-interest were duly issued Certificate of Title No. T-192532; 3) said vendees whose titles aforesaid was transferred in favor of the plaintiffs have obtained the title by virtue of the decision by then Court of First Instance of Naic, Cavite in Civil Case No. NC-709 entitled Tomas Lucido vs. Juana Onate Batallones and Petronilla Q. Quimio, Director of Lands, the Register of Deeds of Cavite; 4) the heirs of Onofre Batallones and Modesta Quimio are the vendees of the land from the Bureau of Lands as evidenced by a Certification issued by Adelwisa P. Ong, Record Officer of the District Land Office of Trece Martires City; 5) the sale of the said parcel of land from the Bureau of Lands in favor of the heirs of Batallones and Quimio was also evidenced by a Deed of Conveyance duly issued by the Bureau of Lands; 6) plaintiffs have taken possession thereof; 7) defendants have enclosed a portion of said property with a fence and occupied 114,987 square meters thereof without the consent and against the will of plaintiffs; 8) plaintiffs have learned that defendants as vendees have been also issued Transfer Certificate of Title covering the same land titled in the name of the plaintiffs under TCT No. T-112047; 9) the title issued to defendants was the product of forgery because it was based on an alleged TCT No. T111070 in favor of Pedro Banayo and Pablo Pugay of Trece Martires City who have no right whatsoever on the real estate in question; 10) upon investigation it was certified by the Bureau of Lands that the said title was falsified and forged because alleged Deed No. V-12918 was issued to one Juana C. Collado for Lot No. 18, Block 56, Tala Estate situated in Caloocan City and that there was (sic) no records in the Bureau of Lands that Deed No. 12918 was issued Lot 2886, S.C. Malabon Estate, Cavite in favor of Pedro Banayo and Pablo Pugay to whom defendants have allegedly acquired title over the said property; 11) considering that the title of the defendants have (sic) no basis in law and in fact and that the same was illegally, unlawfully and maliciously issued by the Register of Deeds on the basis of forged and falsified and none [sic] existing documents as basis for issuance thereof, the same may be cancelled and defendants have no right to take possession of the real property thereon including the portion pertaining to the herein plaintiffs consisting of 114,987 square meters more less, said title creates cloud on the title of plaintiffs and by predecessors-in-interest and as such plaintiffs could not deal on said property and complete transactions thereto, thereby irreparable damage (sic); 12) as a result of the illegal, unlawful, unjust and malicious actuations of the defendants, plaintiffs were deprived of the use of the said parcel of land unlawfully and illegally occupied by them and they failed to introduce the necessary improvements thereon and for which they suffered damages in the amount of not less than P50,000.00; 13) in view of the bad faith, illegal and unlawful actuations of the defendants in obtaining title over the property [, plaintiffs] suffered from sleepless nights, anxiety, mental anguish for while (sic) they are also entitled to claim for moral damages in the sum of P100,000.00; 14) despite repeated demands from the plaintiffs for the defendants to desist from enclosing the titled property with a fence, the latter without any lawful right insisted and actually enclosed their property with a fence, causing irreparable damage and prejudice to the plaintiffs;

15) in view of the illegal, unlawful, malicious and bad faith of defendants and disregard of the right of the plaintiffs, the latter are constrained to hire the services of counsel for which they agreed to pay the sum of P50,000.00 in addition to appearance of P500.00 every hearing of this case; 5 xxx xxx xxx In Civil Case No. TM-206 entitled Spouses Eduardo and Felicisima Tirona, et al., vs. Spouses Sonia (sic) Mathay, et al., for "Quieting of Title, Annulment of Title and Recovery of Possession with damage;" etc. PLAINTIFFS, allege that: 3) on December 31, 1985, Spouses Bonifacio Motas and Jualiana Motas bought a parcel of land situated at (sic) Tanza, Cavite known as Lot 2186-B of Psu-04-01892, containing an area of 18,943 square meters covered by Transfer of (sic) Certificate of Title No. T-192530 of the Registry of Deeds of Cavite from David Quimio as evidenced by a Deed of Absolute sale; 4) Spouses Bonifacio Motas and Juliana Motas issued TCT No. T-203730 by the Register of Deeds of Cavite; 5) Vendors David Quimio, Sr., et al., are the previous registered owners of said parcel of land as evidenced by TCT No. T-192530; 6) Vendors David Quimio, Sr., whose title was transferred to Motas have obtained rights and interest thereon from their predecessors who were vendees from the Bureau of Lands which confirmed in the Decision of then Court of First Instance of Cavite in Civil Case No. 809 entitled Tomas Lucido vs. Juana Batallones and Petronila Quimio, et al., issued on January 30, 1981; 7) said parcel of land was subdivided under Psu-04-01763 into eight lots as evidenced by Sub-division Plan; (sic) 8) plaintiffs bought the subdivided lots from Motas in good faith, and issued Transfer Certificates of Titles by the Office of the Register of the Register of Deeds of Cavite, as follows: Name Lot TCT No. Area 1. Sps Eduardo 2186-D-6 203728 3,000 sq. m. Felicisima Tirona 2186-D-1 203723 741 sq. m. 2. Soledad Motas & Sps. 2186-D-8 206078 3,409 sq. m. Ignacio San Jose & Lucila San Jose 2186-D-8 206078 1,591 sq. m. 3. Anania Cervania 2186-D-3 203725 2,500 sq. m. 4. Ricardo Malabanan 2186-D-4 203726 2,500 sq. m. 5. Plocerfina Tanyag 2186-D-2 203724 700 sq. m. 6. Ruperta Bartolome 2186-D-5B 220606 550 sq. m. 2186-D-5C 220607 700 sq. m. 2186-D-5D 220608 700 sq. m. 2186-D-A 220605 550 sq. m.

9) plaintiffs are the one (sic) paying the corresponding real property taxes thereon and were issued corresponding tax declaration by the Office of the Provincial Assessor of Cavite; 10) plaintiffs have come to know that defendants Spouses Sonia (sic) Mathay and Ismael Mathay, Jr. have enclosed among others said real properties of the plaintiffs with a fence and took physical possession thereof without the knowledge and consent of the plaintiffs; 11) plaintiffs have learned also that defendants have also issued Transfer Certificate of the Title covering among others the same land titled in the name of the plaintiffs under Transfer Certificate of Title No. T113047; 12) the title issued to defendants was the product of forgery because it was based on an alleged Transfer of Certificate of Title No. 3444 in favor of Pedro Banayo and Pablo Pugay of Trece Martires City who have no right whatsoever on the real estate in question and who have been in prior physical possession thereof, as such said title is void-ab-initio; 13) upon investigation, it was certified by the Bureau of Lands that the said titles were based on falsified and forged documents because alleged Deed No. V-12918 which was the basis for the issuance thereof, was issued to one Jack C. Gallado for Lot 18, Block 56, Tala Estate situated in Caloocan City and that there was no records in the Bureau of Lands that Deed No. V-12918 was issued for Lot 2886, S.C. Malabon Estate, Cavite in favor of Pedro Banayo and Pablo Pugay to whom defendants have allegedly acquired title over the said property; 14) the title of the defendants have no basis in law and in fact and that the same was illegally, unlawfully and maliciously issued by the Register of Deeds of Cavite on the basis of forged and falsified and none [sic] existing documents; 15) said Transfer Certificate of Titles were illegally and unlawfully issued without basis in favor of defendants Mathay and their predecessors-in-interest, creating a cloud on the titles of the plaintiffs and as such may be declared null and void; 16) plaintiffs have the right to exclude defendants Mathays from their enjoyment of their property and considering that said defendants have been duly informed of the insisted and continue to insist in the enjoyment of the right from a void title; 17) as a result of the illegal, unlawful, unjust and malicious actuations of the defendants, plaintiffs were deprived of the use of the said parcel of lands unlawfully and illegally occupied by defendants Mathay as they failed to introduce the necessary improvements thereon and for which they suffered damages in the amount of not less than P50,000.00 and the amount of P500.00 a month for each lot as reasonable compensation for the use of their lands; 18) in view of the bad faith, illegal and unlawful actuations of the defendants in obtaining titles over the property in question thru forged and falsified documents, plaintiffs suffered from sleepless nights, anxiety, mental anguish for which they are also entitled to claim for moral damages in the sum of P150,000.00; 19) in view of the illegal, unlawful, malicious and bad faith of the defendants and in disregard of the right of the plaintiffs, the latter are constrained to hire the services of counsel for which they agreed to pay the sum of P50,000.00 in addition to an appearance fee of P1,000.00 every hearing. 6 xxx xxx xxx After trial of the merits, the lower court decided for defendant spouses Sonya Mathay and Ismael Mathay, Jr., and against the plaintiffs in the three consolidated cases; disposing, thus: WHEREFORE, foregoing considered, (sic) judgment is hereby rendered in favor of the defendants: a) declaring Contract of Sale 3397 in favor of Tomas Lucido, the Assignment of Sale Certificate No. 3397 issued by Tomas Lucido in favor of Onofre Batallones and Norberto Quimio, the Deed Conveyance in favor Onofre Batallones and Norberto Quimio and Transfer Certificate of Title No. 85866 in the name of Onofre Batallones and Norberto Quimio, as null and void;

b) declaring Transfer Certificates of Title No. T-195350, T-195351, T-192527, T-192529, T-192528, T192532, T-252996, T-252997, T-252998, T-252999, T-253000, T-253001, T-253002, T-253003, T-253004, T-253005, T-253037, T-206078, T-203724, T-220506, T-220607, T- 220608, T-220605, T-203728, T203726, T-203730, T-203723 and T-203725, as null and void, and directing the Register of Deeds of Cavite Province to cancel them; c) ordering Spouses Teodulfo Atangan & Sylvia Atangan, Onofre Batalloness, Norerto (sic) Quimio, Spouses Tomas Lucido and Juana Batallones, Agustin Poblete, Juancho Albert Poblete, Spouses Bonifacio Motas and Juliana Motas, Soledad Mateo, Ricardo Malabanan, Florcerfina Bartolome, Spouses Eugenio Bartolome and Ruperto Bartolome, Spouses Eduardo Tirona and Felicisima Tirona and Anania Gervania (sic) to surrender to the Office of the Register of Deeds of Cavite their owner's copy of their Transfer of Certificates of Title covering portions of Lot 2186; d) declaring TCT No. T-11304 [sic] 7 valid and the defendants to have superior rights to the property in question and to be the true and lawful owners of the same; e) ordering plaintiffs jointly and severally liable to pay defendants attorney's fees of P50,000.00 and to pay the costs; f) denying all their claims of the parties for lack of basis in law and/or evidence. SO ORDERED. On appeal, the Court of Appeals culled from the records on hand the following, facts 8, to wit: Plaintiffs-appellants and defendants-appellees are all holders of Transfer Certificates of Title which all appear duly issued by the Register of Deeds of Cavite. Plaintiffs derived their titles as follows: The land claimed by the parties is known as Lot 2186 of the Sta. Cruz de Malabon Estate originally consisting of 174,914 sq. meters and previously covered by a survey in the name of plaintiffs predecessorin-interest Heirs of Onofre Batallones and Heirs of Patronillo Quimio and Tomas Lucido evidenced by Psd 04-010692 (Exh. A). 9 The Heirs of Batallones and Patronillo Quimio were issued TCT No. 85866 on August 9, 1976 (Exh. C). 10 On July 13, 1976, the Director of Lands transmitted to the Register of Deeds of Cavite the Deeds of Conveyance and for issuance of corresponding TCT to the Heirs of Onofre Batallones and Norberto Quimio represented by Jauna S. Batallones and Patronillo Quimio (Exh. K). 11 The original vendee of said lot from the Bureau of Land was Tomas Lucido who was issued contract of Sale 3397 dated March 16, 1936 (Exh. M). 12 Lucido assigned his rights over said parcel of land to Onofre Batallones and Norberto Quimio on October 17, 1944 evidenced by assignment of Sale Certificate No. 3397 (Exh. N). 13 In an [O]rder dated June 18, 1976, said assignment was approved by the Director of Lands (Exh. O). 14 On July 1, 1976 the then Department of Natural Resources through Jose A. Janalo, Assistant Secretary issued Sales Certificate No. 3397, Deed No. T-11692 to Heirs of Batallones and Quimio (Exh. Q). 15 On June 18, 1976, the Bureau of Lands forwarded to the Department of Natural Resources for signature the Deeds of Conveyance in favor of Heirs of Batallones and Quimio (Exh. S). 16 After the Heirs of Batallones and Quimio were duly issued TCT No. 85866 17 on August 9, 1976, Tomas Lucido filed Civil Case No. NC 709 before the then Court of First Instance of Cavite, Branch 1, Naic, Cavite (Exh. GG) 18 which ended in a Decision by said court based on a Compromise Agreement duly executed by Juana Onate Batallones representing the heirs of Onofre Batallones and Patronillo Onate Quimio, representing the heirs of Norberto Quimio and pursuant thereto 35,000 sq. meters on the southern portion was given to Tomas Lucido married to Eustaquia Villanueva while the remaining portion of Lot 2186 pertained and belonged to the defendants Heirs of Batallones and Heirs of Norberto Quimio (Exh. Y). 19 Pursuant to the Approved Compromise Agreement in the said decision (Exh. Y), a deed of partition was executed by Juana Batallones, et al., and Tomas Lucido whereby the land covered by TCT No. T-85866 of the Register of Deeds was subdivided into six (6) lots known as Lots 2186-A, 2186-B, 2186-C, 2186-D, 2186-E, and 2186-F, pursuant to approved technical descriptions and subdivision plan Psd-04-10692, and that lots 2186-A containing an area of 9,100 sq. meters and lot 2186-C containing an area of 24,700 were assigned to Tomas Lucido while the rest of the lots assigned to Juana Batallones et al., (Exh. FF). 20 After securing clearance from the Department of Agrarian Reform (Exh. PP-1) 21 and payment of required fees and compliance with the requirements or registration the Register of Deeds of Cavite, Trece Martirez (sic) City issued the corresponding Transfer Certificates of Title to the Heirs of Batallones and Quimio and Tomas Lucido, as follows:

Lot 2186-A TCT No. 192527 Lucido Tomas (sic) Exh. E. V-2
22

Lot 2186-B TCT No. 192528 Exh. AAA

23

Lot 2186-C TCT No. 192529 Tomas Lucido Exh. D. V-3


24

Lot 2186-D TCT No. 192530 Lot 2186-E TCT No. 192531 Exh. AAA-1 Lot 2186-F TCT No. 192532 Exh. G
25

Tomas Lucido married to Eustaquia Villanueva who was the registered owner of lot 2186-A, TCT No. 192527 (Exh. E; V-2) 26 2186-A sold to plaintiffs Teodulfo P. Atangan married to Sylvia Atangan 27 evidenced by a Deed of Absolute Sale [e]xecuted on July 12, 1985 (Exh. U-1). 29 and another Deed of Sale for lot 2186-C (Exh. U) 29 Plaintiffs Atangan were duly issued TCT Nos. T-195350 for lot 2186-A and TCT No. T195351 for lot 2186-C (Exhs. V-1 and V, respectively). 30 Said plaintiffs paid the corresponding taxes thereon (Exh. U-6, U-7) 31 and they were duly issued tax declaration No. 11677 and Tax Declaration No. 11679 (Exh. U-4, U-3, respectively). 32 Juana Batallones, et al., sold lot 2186-F to plaintiffs Agustina Poblete, married to Amor Poblete, Juancho Albert A. Poblete, and Juliana Motas married to Bonifacio Motas 33 evidenced by a deed of absolute sale executed on June 8, 1988 (Exh. XX). 34 Said parcel of land was subdivided under Sub. plan Psd-04-0106-92, and, as a result the following Certificate of Title were issued to the following plaintiffs: Lot 2186-F-1 TCT No. T-252996 Agustina Poblete Exh. SS
35

Lot 2186-F-2 TCT No. T-252997 do Exh. SS-1


36

Lot 2186-F-3 TCT No. T-252998 do Exh. SS-2


37

Lot 2186-F-4 TCT No. 252999 do Exh. SS-3


38

Lot 2186-F-5 TCT No. T-253000 Juancho Albert Poblete Exh. SS-4
39

Lot 2186-F-6 TCT No. T-213001 do Exh. SS-5


40

Lot 2186-F-7 TCT No. T-253002 Juancho Albert Poblete Exh. SS-6
41

Lot 2186-F-8 TCT No. T-253003 Jualiana Motas Exh. SS-7


42

Lot 2186-F-9 TCT No. T-253004 do Exh. SS-8


43

Lot 2186-F-10 TCT No. T-253005 do Exh. SS-9


44

Lot 2186-F-11 TCT No. T- 253007 do Exh. SS-10


45

David Quimio, owners of lot 2186-D, TCT No. 19530 sold the same to plaintiffs Jualiana Motas married to Bonifacio Motas evidenced by a notarized deed of absolute sale dated December 31, 1985 (Exh. VV). 46 Said lot contained an area of 18,943 sq. meters more or less. She was issued TCT No. T-201592 by the Register of Deed (sic) of Cavite. Plaintiffs Motas caused said lot to be subdivided under Psd-017063 and sold the same to plaintiffs Tirona, et al., in Civil Case No. TM-206 and corresponding Transfer Certificates of Titles were issued to the sail plaintiffs as follows: Name Lot TCT No. Area 1 Sps Eduardo & 2186-D-6 203728 3,000 sq. m. Felicisima Tirona 2186-D-1 203723 741 sq. m. 2 Soledad Mateo (sic) & 2186-D-8 206078 3,409 sq. m. Sps. Ignacio San Jose & Lucila San Jose 2186-D-8 206078 1,591 sq. m. 3 Anania Cervania 2186-D-3 203725 2,500 sq. m. 4 Ricardo Malabanan 2186-D-4 203726 2,500 sq. m. 5 Plocerfina Tanyag 2186-D-2 203724 700 sq. m. 6 Ruperta Bartolome 2186-D-5B 220606 550 sq. m. 2186-D-5C 220608 700 sq. m. 2186-D-5D 220608 550 sq. m. 2186-D-A 220605 550 sq. m. 1. Sps Eduardo R. Tirona Exh. SS-11 Exh. SS-12 2. Soledad Motas & Sps. Ignacio Exh. NN-1 San Jose & Lucila San Jose Exh. SS-13
48 47

3. Anania Servnia (sic) Exh. SS-20 Exh. SS-19 4. Ricardo Malabanan Exh. NN-4 5. Plocerfina Tanyag Exh. NN-3
50

49

51

6. Ruperta Malabanan Exh. NN-6 Exh. NN-7 Exh. NN-8 Exh. NN-9

52

7. Plaintiff Juliana Motas & Lot No. 2186-D Bonifacio Motas TCT No. 203730 Exh. VV-1
53

Said plaintiffs were duly issued corresponding Tax Declaration and have paid the realty taxes 54 thereon and they were in actual possession of the contested parcels of land until the same were fenced by defendants Mathay's men over their objection and upon inquires, they discovered that the defendants Mathay were issued TCT No. T-113047 covering same parcel of land (Exh. 2) 55 based on a Deed of Absolute [S]ale executed allegedly on 21 May 1980 by Pedro Banayo and Pablo Pugay (Exh. 3) 56 and notarized by Manalad Santera (Exh. 3-A). 57 Defendants-appellees Spouses Sonya Mathay and Ismael Mathay, Jr. claimed that the land described as Lot 2186 of the Sta. Cruz de Malabon Estate, situated in Tanza, Cavite, containing an area of 174,917 square meters covered by TCT No. T-111070 (Exh. 8), 58registered in the name of Pedro Banayo and Pablo Pugay on February 28, 1980 was purchased by the defendants from Pedro Pugay on May 31, 1980 (Exh. 3, 3-A), and TCT No. T-113047 (Exh. 2) 60 was issued in their favor on June 3, 1980 by the Office of the Register of Deeds of Cavite Province, declared for taxation purposed (sic) (Exh. 4, 5) 61 and corresponding taxes paid (Exh. 18, 19, 20, 21, 22). 62 It appears that Director of Lands Ramon N. Casanova, under the Deed No. V-12918 and Sales Certificates No. 2454 in consideration of P8,958.00 sold to Pedro Banayo and Pablo Pugay Lot 2186 of the Sta. Cruz de Malabon Estate, friar Lands Estate, situated in the Municipality of Tanza, Province of Cavite, containing an area of 17 hectares, 49 areas and 17 centares of the subdivision plan A-21 approved by the Court of Land Registration on the 4th day of February, 1911 (Exh. 15) 63 with the technical description of the land (Exh. 15-A) 64 and on February 21, 1980, a letter addressed to the Register of Deeds for issuance of title to Pedro Banayo and Pablo Pugay (Exh. 16) 65 which was cancelled by TCT No. 113047 issued in the name of Spouses Sonya Mathay and Ismael Mathay, Jr., (Exh. 2), 66 and that according to the old Sales Register Book kept in the office, Lot 2186 of the Sta. Cruz de Malabon Estate, Cavite, is registered in the name of Pedro Banayo and Pablo Pugay (Exh. 17-A). 67 It appears also that Pugay and Banayo were assignees of the subject lot under Assignment of Sale Certificates No. 3397, 68 of the Bureau of Lands, with Tomas Lucido as Assignor. xxx xxx xxx On November 18, 1993, the Court of Appeals came out with a judgment of reversal, the dispositive portion of which, reads: WHEREFORE, premises considered, judgment is rendered in favor of plaintiffs-appellants in the aboveentitled three cases against defendants-appellees. The consolidated decision of the Regional Trial Court, Branch 23, Trece Martirez (sic) City in Civil Case No. TM-175, Civil Case No. TM-180 and Civil Case No. TM206 is reversed and set aside. The defendants-appellees Register of Deeds of Cavite, Trece Martirez (sic) City is ordered to cancel Transfer Certificate of Title No. 113047 covering Lot 2186 of Sta. Cruz de Malabon Estate in the name of Spouses Ismael and Sonya Mathay. Spouses Ismael and Sonya Mathay are ordered to vacate Lot 2186, Sta. Cruz de Malabon Estate, Cavite in favor of the plaintiffs-appellants.

SO ORDERED. With the denial of their motion for reconsideration, the spouses Sonya Mathay and Ismael Mathay, Jr. found their way to this Court via the present Petition; theorizing, that: I. WITH DUE RESPECT, THE COURT OF APPEALS ERRED IN SETTING ASIDE THE GENUINE TRANSFER CERTIFICATE OF TITLE NO. 113047 OF SPS. SONYA & ISMAEL MATHAY JR., WHO ACQUIRED THE SAID TORRENS TITLE AS BUYERS IN GOOD FAITH, SINCE THE DOCUMENTS NECESSARY FOR THE TRANSFER, EVEN PRIOR TO THE SALE, WERE ALL DULY FILED AND CLEARED WITH THE RE REGISTER OF DEEDS, ASSESSOR'S OFFICE, B.I.R., AND OTHER GOVERNMENT ENTITLES. MOREOVER, THE LAW STATED IN "DINO VS. COURT OF APPEALS," G.R. NO. 95921, SHOULD BE UPHELD, IN CASE OF BASELESS ASSERTION OF ALLEGED FORGERY BY THE RESPONDENTS; II. WITH DUE RESPECT, THE COURT OF APPEALS ERRED IN NOT RECOGNIZING THE 1980 TITLE OF SPS. SONYA & ISMAEL MATHAY JR. OVER AND ABOVE THE LATER 1986-88 ALLEGED TITLES OF RESPONDENTSATANGAN ET AL., WHICH IS CLEARLY CONTRARY TO THE APPLICABLE LAW ON THE MATTER, NAMELY: ART. 1544 OF THE CIVIL CODE OF THE PHILIPPINES; III. WITH DUE RESPECT, THE COURT OF APPEALS ERRED IN NOT CONSIDERING THAT THE DEED OF SALE EXECUTED BY VENDORS BANAYO & PUGAY IN FAVOR OF VENDEES SPS. SONYA & ISMAEL MATHAY, JR., IS DULY NOTARIZED IN SO FAR AS THE VENDORS AND VENDEES ARE CONCERNED AND THAT, FURTHERMORE, THE COURT OF APPEALS ERRED IN NOT CONSIDERING THE VALIDITY OF THE PETITIONERS' DOCUMENTS, WHICH WERE ALL DULY EXECUTED. The petitioners, spouses Sonya Mathay and Ismael Mathay, Jr., claim to be buyers in good faith, reasoning out that TCT No. T-111070, the derivative title of their TCT No. T-113047, appeared to be free from any encumbrance. They argue that a person dealing on a registered land may safely rely on the correctness of the covering certificate of title and is not required to go beyond the certificate of title to determine the condition of the property. A purchaser in good faith and for value is defined as "one who buys property of another, without notice that some other person has a right to, or interest in, such property and pays a full and fair price for the same at the time of such purchase, or before he has notice of the claims or interest of some other person in the property." 69 As a rule, he who asserts the status of a purchaser in good faith and for value, has the burden of proving such assertion. This onus probandi cannot be discharged by mere invocation of the legal presumption of good faith, i.e., that everyone is presumed to act in good faith." 70 Here, petitioners cannot be categorized as purchasers in good faith. Prior to the fencing of subject land, neither they (Mathays) nor their predecessors-in-interest (Banayo and Pugay) ever possessed the same. In fact, at the time the said property was sold to petitioners, the private respondents were not only in actual possession of the same but also built their houses thereon, cultivated it and were in full enjoyment of the produce and fruits gathered therefrom. Although it is a recognized principle that a person dealing on a registered land need not go beyond its certificate of title, it is also a firmly settled rule that where there are circumstances which would put a party on guard and prompt him to investigate or inspect the property being sold to him, such as the presence of occupants/tenants thereon, it is, of course, expected from the purchaser of a valued piece of land to inquire first into the status or nature of possession of the occupants, i.e., whether or not the occupants possess the land en concepto de dueo, in concept of owner. As is the common practice in the real estate industry, an ocular inspection of the premises involved is a safeguard a cautious and prudent purchaser usually takes. Should he find out that the land he intends to buy is occupied by anybody else other than the seller who, as in this case, is not in actual possession, it would then be incumbent upon the purchaser to verify the extent of the occupant's possessory rights. The failure of a prospective buyer to take such precautionary steps would mean negligence on his part and would thereby prelude him from claiming or invoking the rights of a "purchaser in good faith." So also, before the fence around subject property was erected, private respondent communicated their objection to the fencing of the area by petitioners but they were ignored by the petitioners, who continued enclosing the premises under controversy in the presence of armed men employed by them (petitioners). Consequently, not being "innocent purchasers for value," within legal contemplation, petitioner's reliance on Article 1544 of the New Civil Code is misplaced. Such stance of their lacks legal and factual basis. The fundamental premise of preferential rights under the law is good faith. 71

Viewed in proper perspective, we uphold the finding by the Court of Appeals that the petitioners cannot invoke Art. 1544 of the Civil Code in view of the questionable documents from which their title emanated. As the Court of Appeals ratiocinated: We think the applicable rule as stated in Baltazar v. Court of Appeals, No. L-78728, December 8, 1988, 168 SCRA 334, is that as between two persons both of whom are in good faith and both innocent of any negligence, the law must protect and prefer the lawful holder of registered title over the transferee of a vendor bereft of any transmissible rights. Under the foregoing principle derived from the above case law, the Mathays have no rights as against plaintiffs-appellants, their recourse is against their vendors Banayo and Pugay.72 The aforesaid ruling of the Court of Appeals accords with the Latin maxim: nemo pofest plus juris ad alium transferre quam ipse habet. "No one can transfer a greater right to another than he himself has". Thus, in Calalang vs. Register of Deeds of Quezon City, 73 this Court held: Needless to state, all subsequent certificates of title including petitioner's titles are void because of the legal truism that the spring cannot rise higher than its source. The law must protect and prefer the lawful owner of registered title over the transferee of a vendor bereft of any transmissible rights. In sum, "defective titles cannot be upheld against the unblemished titles of the private respondents."
74

Petitioners further submit that requiring them to inquire beyond the face of the torrens title defeats the primordial objective of the torrens system, which is that a person dealing on registered land has the right to rely on the torrens title. But "a certificate is not conclusive evidence of title if it is shown that the same land had already been registered and an earlier certificate for the same is in existence." 75 In the case at bar, as borne out by pertinent records, the private respondents obtained their rights and title from TCT No. T-85866, which was registered on August 9, 1976 under the name of Heirs of Onofre Batallones and Patronillo Quimio. On the part of petitioners, their supposed title originated from a spurious title of Pedro Banayo and Pablo Pugay illegally registered on February 28, 1980. So also, where two transfer certificates of title have been issued on different dates, to two different persons, for the same parcel of land, even if both are presumed to be title holders in good faith, it does not necessarily follow that he who holds the earlier title should prevail. On the assumption that there was regularity in the registration leading to the eventual issuance of subject transfer certificates of title, the better approach is to trace the originalcertificates from which the certificates of title in dispute were derived. Should there be only one common originalcertificate of title, as in this case under consideration, the transfer certificate issued on an earlier date along the line must prevail, absent any anomaly or irregularity tainting the process of registration. In light of the attendant facts and circumstances, there is therefore a need to refer to the background or history of the land under controversy. As conceded by petitioners, their TCT No. T-113047 was derived from TCT No. 111070 under the names of Pedro Banayo and Pablo Pugay. Hence, the necessity of looking into and determining the legitimacy of the title of the two, Banayo and Pugay. In an effort to support their claim of ownership over subject Lot 2186, Pedro Banayo and Pablo Pugay presented two theories. First, they theorize that on October 17, 1970, under Assignment of Sale Certificate No. 3397, 76 Tomas Lucido assigned and transferred to them all his interests in the contested land. Their second theory is that subject real property was sold to them by then Director of Lands Ramon N. Casanova, under Deed No. V-12918 and Sales Certificate No. 2454. 77 After a careful examination of germane records, however, we are of the conclusion, and so find, that the aforestated theories of Pedro Banayo and Pablo Pugay are without any factual and legal basis. The assignment of Sales Certificate No. 3397 allegedly executed by Tomas Lucido in favor of Pedro Banayo and Pablo Pugay was not signed by the said Tomas Lucido. Neither does it bear the signature of the latter. Worse, the same Tomas Lucido testified on the witness stand, 78 that he does not know Pedro Banayo and Pablo Pugay, and he never received P50,000.00 from them. What is more, Tomas Lucido reiterated that he really sold the land in question to the herein private respondents, spouses Teodulfo Atangan and Sylvia Atangan, the plaintiffs in Civil Case No. TM-175, as shown by the two Deeds of Sale 79 he executed in favor of the said spouses. Teodulfo Atangan and Sylvia Atangan. To reinforce their aforesaid second theory, Banayo and Pugay declared that, for and in consideration of Eight Thousand Nine Hundred Fifty Eight (P8,958.00) Pesos, former Director of Lands Ramon Casanova issued Deed No. V-12918 with Sales Certificate No. 2454, which Deed was the basis of the issuance to them of TCT No. T-111070 by the Register of Deeds of the Province of Cavite.

But Mr. Marcelino Freiras, Chief of Reservation and Special Land Grant Section of the Bureau of Lands, stressed that the signature of former Lands Director Ramon Casanova on the said Deed No. V-12918 with Sales Certificate No. 2454, was forged. According to him (Freiras), having worked with him for the past thirty (30) years, he is familiar with the signature of Director Casanova. 80 Then, too, in a letter 81 addressed to Atty. Franco Loyola, counsel for private respondents, the same Mr. Freiras informed that, as indicated by the entries in the Deed of Conveyance Book, 82 Deed V-12918 was issued on October 10, 1979, for Lot No. 18, Block 16, Tala Estate, Caloocan City, in the name of one Zaida C. Calado, and not for the subject land, identified as Lot 2186 of Sta. Cruz de Malabon Estate. Cavite City, originally registered under the names of the Heirs of Onofre Batallones and Patronillo Quimio. In another letter 83 sent in answer to the query of Juana Motas, one of the plaintiffs in Civil Case No. TM-180, Alicia V. Dayrit, Office Caretaker of Land Management Division of the Bureau of Lands, corroborated what Mr. Freiras disclosed, as aforementioned. In her said letter, Alicia V. Dayrit revealed to Mrs. Motas that there is really no record of any Deed No. V-12918 issued for Lot 2186 of Sta. Cruz de Malabon Estate, Cavite City, in favor of Pedro Banayo and Pablo Pugay, and that what appears in the Registry Book of Deeds of Conveyance is Deed of Conveyance No. V-11692 issued on July 1, 1976 in favor of Onofre Batallones and Norberto Quimio by the then Secretary of Natural Resources which Deed pertains to Lot 2186 of Sta. Cruz de Malabon Estate. The aforesaid revelations were corroborated in open court by witness Freiras. 84 Further, the Court detected discrepancies in the entries of the documents above mentioned. Pedro Banayo and Pablo Pugay contended that by virtue of Sales Certificate No. 2454, the then Director of Lands Ramon Casanova issued Deed V-12918, on February 18, 1980. 85 However, after a meticulous examination of the evidence on record, the Court noticed that former Director Ramon Casanova issued another Deed V-12918 but, bearing Sales Certificate No. 3397 and dated February 19, 1980. 86 It should be remembered that Pedro Banayo and Pablo Pugay declared that the issuance of TCT No. T111070 in their favor was based on the said two documents, both bearing the signature of Director Casanova. The foregoing observations jibe with the revelation of Freiras that the alleged signatures of former Lands Director Ramon Casanova appearing on the said documents in question were forged. Also strengthened thereby is the testimony of Mrs. Adelwisa O. Ong, former Record Officer and now Acting Administrative Officer of the Bureau of Lands in Cavite, that subject land was patented under Deed No. V-11692, registered under the name of the Heirs of Onofre Batallones and Norberto Quimio, and the name of Tomas Lucido was mentioned in the Old Sales Register Book as he was the approved vendee of the same. 87 Besides, it is too evident to be overlooked that the number of the Sales Certificate of the second Deed V-12918 (bearing Sales Certificate No. 3397) is the same number of the Sales Certificate appearing in the Assignment of Sale allegedly executed by Tomas Lucido in favor of Pedro Banayo and Pablo Pugay. This fact alone, which this Court cannot ignore, is fatal to the cause of Pedro Banayo and Pablo Pugay. Furthermore, the circumstances surrounding the execution of the Deed of Absolute Sale 88 by Pedro Banayo and Pablo Pugay in favor of the spouses Sonya Mathay and Ismael Mathay, Jr. beclouded the issuance of TCT No. 113047. 89 Records disclose that the said Deed of Absolute Sale did not comply with legal formalities and was not duly notarized. Atty. Mapalad Santera, who signed the document as Notary Public, had no commission as Notary Public for the Province of Cavite, at the time subject document was supposedly notarized, 90 and the residence certificates of vendors Banayo and Pugay appeared to be of dubious source. 91 To bolster their submission that their title is genuine and authentic, private respondents introduced several documentary evidence. They also presented officials concerned and the caretakers of the said documents, who all testified for the private respondents. On the other hand, the petitioners, spouses Sonya Mathay and Ismael Mathay, Jr., who claim to be buyers in good faith, utterly failed to discharge the burden of proving the sustainability of their posture. Worse for them, as above discussed, the title of Pedro Banayo and Pablo Pugay relied upon by petitioners has been shown by preponderance of evidence to be the product of forgery. All things studiedly considered, we are of the irresistible conclusion that the respondent Court of Appeals did not err in reversing the appealed decision of the trial court. WHEREFORE, the Petition is DISMISSED for lack of merit, and the Decision of the Court of Appeals in CA-GR CV No. 37902 AFFIRMED in toto. No pronouncement as to costs. SO ORDERED.