Landti Cases 2

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Republic of the Philippines

SUPREME COURT

Manila

EN BANC

G.R. No. 5246 September 16, 1910

MANUELA GREY ALBA, ET AL., petitioners-appellants,

vs.

ANACLETO R. DE LA CRUZ, objector-appellee.

Ramon Salinas, for appellants.

Aniceto G. Reyes, for appellee.

TRENT, J.:

These petitioners, Manuela, Jose, Juan, and Francisco, surnamed

Grey y Alba, are the only heirs of Doa Segunda Alba Clemente andHonorato Grey, deceased. Remedios Grey y Alba, a sister of the

petitioners, was married on the 21st day of March, 1903, to Vicente

Reyes and died on the 13th of July, 1905, without leaving any heirsexcept her husband. The four petitioners, as coowners, sought to

have registered the following-described property:

A parcel of land situated in the barrio of Talampas,

municipality of Baliuag, Province of Bulacan, upon which

are situated three houses and one camarin of light

material, having a superficial area of 52 hectares, 51 ares,

and 22 centares; bounded on the north by the highway(calzada) of Talampas and the lands of Rita Ruiz Mateo;

on the east by the lands of the said Rita Ruiz Mateo,

Hermenegildo Prado, Policarpo de Jesus, and a streamcalled Sapang Buslut; on the south by the same stream

and the lands of the capellania; and on the west by the

stream called Sapang Buslut, and the lands of Vicente dela Cruz, Jose Camacho and Domingo Ruiz Mateo.

This parcel of agricultural land is used for the raising of rice and sugarcane and is assessed at $1,000 United States currency. The petition,

which was filed on the 18th of December, 1906, was accompanied

by a plan and technical description of the above-described parcelof land.

After hearing the proofs presented, the court entered, on the 12th ofFebruary, 1908, a decree in accordance with the provisions of

paragraph 6 of section 54 of Act No. 926, directing that the land

described in the petitioner be registered in the names of the fourpetitioners, as coowners, subject to the usufructuary right of Vicente

Reyes, widower of Remedios Grey.

On the 16th of June, 1908, Anacleto Ratilla de la Cruz filed a motion

in the Court of Land Registration asking for a revision of the case,

including the decision, upon the ground that he is the absoluteowner of the two parcels of land which are described in said motion,

and which, according to his allegations, are included in the landsdecreed to the petitioners. He alleged that the decree of February

12, 1908, was obtained maliciously and fraudulently by the

petitioners, thereby depriving him of said two parcels of land. Hefurther alleged that he was the absolute owner of the two parcels of

land, having inherited them from his father, Baldomero R. de la Cruz,

who had a state grant for the same. He therefore asked, under theprovisions of section 38 of the Land Registration Act (No. 496), a

revision of the case, and that the said decree be modified so as toexclude the two parcels of land described in said motion. The Land

Court upon this motion reopened the case, and after hearing the

additional evidence presented by both parties, rendered, on the23rd of November, 1908, its decision modifying the former decree by

excluding from the same the two parcels of land claimed by

Anacleto Ratilla de la Cruz. From this decision and judgment thepetitioners appealed and now insist, first, that the trial court erred in

reopening the case and modifying its decree dated the 12th ofFebruary, 1908, for the reason that said decree was not obtained by

means of fraud; and, second, that the court erred in holding that the

two parcels of land described in the appellee's motion are not theirproperty.

It was agreed by counsel that the two small parcels now in disputeforma part of the land described in the petition and were included in

the decree of February 12, 1908, and that the petitioners are the

owners of the remainder of the land described in the said decree.

The petitioners inherited this land from their parents, who acquired

the same, including the two small parcels in question, by purchase,as is evidenced by a public document dated the 26th of November,

1864, duly executed before Francisco Iriarte, alcalde mayorand

judge of the Court of First Instance of the Province of Bulacan.

Baldomero R. de la Cruz, father of the appellee, obtained in march,

1895, a state grant for several parcels of land, including the two

parcels in question. This grant was duly inscribed in the old register ofproperty in Bulacan on the 6th of April of the same year.

It is admitted that at the time the appellants presented their petitionin this case the appellee was occupying the two parcels of land now

in question. It is also admitted that the name of the appellee does

not appear in the said petition as an occupant of the said two

parcels. The petitioners insist that the appellee was occupying these

parcels as their tenant and for this reason they did not include hisname in their petition, as an occupant, while the appellee contends

that he was occupying the said parcels as the absolute owner underthe estate grant by inheritance.

The court below held that the failure on the part of the petitioners toinclude the name of the appellee in their petition, as an occupant of

these two parcels of land, was a violation of section 21 of Act No.

496, and that this constituted fraud within the meaning of section 38of said Land Registration Act. The trial court further held that the

grant from the estate should prevail over the public document of

purchase of 1864.

The mother of the petitioners died on November 15, 1881; their father

died prior to that time. Manuela, the oldest of the petitioners, was

about six years of age when their mother died. So these children

were minors when the father of the appellee obtained the estate

grant.

On the 13th of June, 1882, Jose Grey, uncle and representative of

the petitioners, who were then minors, rented the land owned by thepetitioners' deceased parents to one Irineo Jose for a period of three

years. On the 23d of March, 1895, the said Jose Grey, as the

representative of the petitioners, rented the same land for a periodof six years to Baldomero R. de la Cruz, father of the appellee. This

rental contract was duly executed in writing. This land was cultivated

during these six years by Baldomero R. de la Cruz and his children,

one of whom is the appellee. On the 14th of December, 1905, Jose

Grey, for himself and the other petitioners, rented the same land toEstanislao R. de la Cruz for a period of two years. Estanislao de la

Cruz on entering into this rental contract with Jose Grey did so for

himself and his brothers, one of whom is the appellee. While theappellee admits that his father and brother entered into these rental

contracts and did, in fact, cultivate the petitioners' land, nevertheless

he insists that the two small parcels in question were not included inthese contracts. In the rental contract between the uncle of the

petitioners and he father of the appellee the land is not described. Inthe rental contract between Jose Grey, one of the petitioners, and

Estanislao R. de la Cruz, brother of the appellee, the two small

parcels of land in question are included, according to the

description given therein. This was found to be true by the court

below, but the said court held that as this contract was made by

Estanislao R. de la Cruz it was not binding upon Anacleto R. de laCruz, the appellee.

The two small parcels of land in question were purchased by theparents of the petitioners in 1864, as is evidenced by the public

document of purchase and sale of that year. The same two parcelsof land are included in the state grant issued in favor of BaldomeroRatilla de la Cruz in 1895. This grant was obtained after the death of

the petitioners' parents and while they were minors. So it is clear thatthe petitioners honestly believed that the appellee was occupying

the said parcels as their lessee at the time they presented their

application for registration. They did not act in bad faith, nor with

any fraudulent intent, when they omitted to include in their

application the name of the appellee as one of the occupants of

the land. They believed that it was not necessary nor required thatthey include in their application the names of their tenants. Under

these circumstances, did the court below commit an error inreopening this case in June, 1908, after its decree had been entered

in February of the same year?

The application for the registration is to be in writing, signed andsworn to by the applicant, or by some person duly authorized in his

behalf. It is to contain an accurate description of the land. It shallcontain the name in full and the address of the applicant, and also

the names and addresses of all occupants of land and of all

adjoining owners, if known; and, if not known, it shall state whatsearch has been made to find them. In the form of notice given by

statute, which shall be sworn to, the applicant is required to state

and set forth clearly all mortgages or encumbrances affecting saidland, if any, the rights and interests, legal or equitable, in the

possession, remainder, reversion, or expectancy of all persons, withtheir names in full, together with their place of residence and post

office addresses. Upon receipt of the application the clerk shall

cause notice of the filling to be published twice in the OfficialGazette. This published notice shall be directed to all persons

appearing to have an interest in the land sought to be registered

and to the adjoining owners, and also "to all whom it mayconcern." In addition to the notice in the Official Gazette the Land

Court shall, within seven days after said publication, cause a copy ofthe notice, in Spanish, to be mailed by the clerk to every personnamed in the application whose address is known; to cause a duly

attested copy of the notice, in Spanish, to be posted in aconspicuous place on every parcel of land included in the


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application, and in a conspicuous place on the chief municipal

building of the town in which the land is situated. The court may also

cause other or further notice of the application to be given in suchmanner and to such persons as it may deem proper. The certificate

of the clerk that he has served the notice as directed by the court bypublication or mailing shall be conclusive proof of such service.

Within the time allowed in the notices, if no person appears and

answers, the court may at once, upon motion of the applicant, noreason to the contrary appearing, order a general default. By the

description in the published notice "to all whom it may concern," and

by express provisions of law "all the word are made partiesdefendant and shall be concluded by the default an order." If the

court, after hearing, finds that the applicant has title, as stated in his

application, a decree or registration shall be entered.

Every decree of registration shall bind the land and quiet

title thereto, subject only to the exceptions stated in thefollowing section. It shall be conclusive upon and

against all persons, including the Insular Government, andall the branches thereof, whether mentioned by name in

the application, notice, or citation, or included in the

general description "to all whom it may concern." Suchdecree shall not be opened by reason of the absence,

infancy, or other disability of any person affected thereby,

nor by any proceedings in any court for reversingjudgments or decrees; subject, however, to the right of any

person deprived of land or of any estate or interest thereinby decree of registration obtained by fraud to file in the

Court of Land Registration a petition for review within one

year. . . . (Sec. 38 of Act No. 496.)

The appellee is not included in any of the exceptions named insection 38 referred to above.

It will be seen that the applicant is required to mention not only the

outstanding interest which he admits but also all claims of interest,

though denied by him. By express provision of law the world aremade parties defendant by the description in the notice "to all

whom it may concern."

Although the appellee, occupying the two small parcels of land in

question under the circumstances as we have set forth, was not

served with notice, he was made a party defendant by publication;and the entering of a decree on the 12th of February, 1908, must be

held to be conclusive against all persons, including the appellee,whether his (appellee's) name is mentioned in the application,

notice, or citation.

The said decree of February 12, 1908, should not have been opened

on account of the absence, infancy, or other disability of any person

affected thereby, and could have been opened only on the groundthat the said decree had been obtained by fraud. That decree was

not obtained by fraud on the part of the applicants, inasmuch as

they honestly believed that the appellee was occupying these twosmall parcels of land as their tenant. One of the petitioner went upon

the premises with the surveyor when the original plan was made.

Proof of constructive fraud is not sufficient to authorize the Court of

Land Registration to reopen a case and modify its decree. Specific,

intentional acts to deceive and deprive anther of his right, or in some

manner injure him, must be alleged and proved; that is, there must

be actual or positive fraud as distinguished from constructive fraud.

The question as to the meaning of the word "fraud" in the Australian

statutes has been frequently raised. Two distinctions have been

noted by the Australian courts; the first is the distinction between themeaning of the word "fraud" in the sections relating to the conclusive

effect of certificates of title, and its meaning in the sections relating

to the protection of bona fide purchasers from registered proprietors.The second is the distinction between "legal," "equitable," or

"constructive" fraud, and "actual" or "moral" fraud. In none of the

groups of the sections of the Australian statutes relating to the

conclusive effect of certificates of title, and in which fraud is referred

to, is there any express indication of the meaning of "fraud," with thesole exception of that of the South Australian group. (Hogg on

Australian Torrens System, p. 834.)

With regard to decisions on the sections relating to the

conclusive effect of certificates of title, it has been held in

some cases that the "fraud" there mentioned meansactual or moral fraud, not merely constructive or legal

fraud. In other cases "fraud" has been said to include

constructive, legal, and every kind of fraud. In other cases,against, knowledge of other persons' right, and the

deliberate acquisition of registered title in the face of such

knowledge, has been held to be "fraud" which renderedvoidable the certificates of title so obtained; and voluntary

ignorance is, for this purpose, the same as knowledge. Butin none of these three classes of cases was there absent

the element of intention to deprive another of just rights,

which constitutes the essential characteristics of actual as distinguished from legal-fraud. (Id., p. 835, and cases

cited in notes Nos. 85, 86, 87, 88, and 89 at bottom ofpages 835 and 836.)

By "fraud" is meant actual fraud-dishonesty of some sort. (Judgmentof Privy Council in Assets Co. vs. Mere Roihi, and Assets Co. vs.

Panapa Waihopi, decided in March, 1905, cited by Hogg in hisSupplementary Addendum to his work on Australian Torrens

System,supra.) The same meaning should be given to the word

"fraud" used in section 38 of our statutes (Act No. 496).

The question as to whether any particular transaction shows fraud,

within the meaning of the word as used in our statutes, will in eachcase be a question of fact. We will not attempt to say what acts

would constitutes this kind of fraud in other cases. This must be

determined from the fact an circumstances in each particular case.

The only question we are called upon to determine, and have

determined, is whether or not, under the facts and circumstances in

this case, the petitioners did obtain the decree of February 12, 1908,by means of fraud.

It might be urged that the appellee has been deprived of hisproperty without due process of law, in violation of section 5 of the

Act of Congress of July 1, 1902, known as the Philippine Bill," which

provides "that no law shall be enacted in the said Islands which shalldeprive any person of life, liberty, or property without due process of

law."

The Land Registration Act requires that all occupants be named in

the petition and given notice by registered mail. This did not do the

appellee any good, as he was not notified; but he was made aparty defendant, as we have said, by means of the publication "to

all whom it may concern." If this section of the Act is to be upheld thismust be declared to be due process of law.

Before examining the validity of this part of the Act it might be well to

note the history and purpose of what is known as the "Torrens LandRegistration System." This system was introduced in South Australia by

Sir Robert Torrens in 1857 and was there worked out in its practicableform.

The main principle of registration is to make registered titles

indefeasible. As we have said, upon the presentation in the Court ofLand Registration of an application for the registration of the title to

lands, under this system, the theory of the law is that all occupants,adjoining owners, adverse claimants, and other interested persons

are notified of the proceedings, and have have a right to appear in

opposition to such application. In other words, the proceeding isagainst the whole word. This system was evidently considered by the

Legislature to be a public project when it passed Act No. 496. The

interest of the community at large was considered to be preferred tothat of private individuals.

At the close of this nineteenth century, all civilized nationsare coming to registration of title to land, because

immovable property is becoming more and more a matter

of commercial dealing, and there can be no trade withoutsecurity. (Dumas's Lectures, p. 23.)

The registered proprietor will no longer have reasons to fearthat he may evicted because his vendor had, unknown to

him, already sold the and to a third person. . . The

registered proprietor may feel himself protected against

any defect in his vendor's title. (Id., p. 21.)

The following summary of benefits of the system ofregistration of titles, made by Sir Robert Torrens, has been

fully justified in its use:

First. It has substituted security for insecurity.

Second. It has reduced the costs of conveyances frompounds to shillings, and the time occupied from months to

days.

Third. It has exchanged brevity and clearness for obscurityand verbiage.

Fourth. It has so simplified ordinary dealings that he whohas mastered the "three R's" can transact his own

conveyancing.

Fifth. It affords protection against fraud.

Sixth. It has restored to their just value many estates heldunder good holding titles, but depreciated in

consequence of some blur or technical defect, and has

barred the reoccurrence of any similar faults. (Sheldon onLand Registration, pp. 75, 76.)

The boldest effort to grapple with the problem ofsimplification of title to land was made by Mr. (afterwards

Sir Robert) Torrens, a layman, in South Australia in 1857. . . .In the Torrens system title by registrationtakes the placeof "title by deeds" of the system under the "general" law. A

sale of land, for example, is effected by a registered

transfer, upon which a certificate of title is issued. The


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certificate is guaranteed by statute, and, with certain

exceptions, constitutes indefeasible title to the land

mentioned therein. Under the old system the same salewould be effected by a conveyance, depending for its

validity, apart from intrinsic flaws, on the correctness of along series of prior deeds, wills, etc. . . . The object of the

Torrens system, them, is to do away with the delay,

uncertainty, and expense of the old conveyancing system.(Duffy & Eagleson on The Transfer of Land Act, 1890, pp. 2,

3, 5, 7.)

By "Torrens" system generally are meant those systems of

registration of transactions with interest in land whose

declared object . . . is, under governmental authority, to

establish and certify to the ownership of an absolute and

indefeasible title to realty, and to simplify its transfer. (Hogg

on Australian Torrens system,supra, pp. 1, 2.)

Compensation for errors from assurance funds is provided in all

countries in which the Torrens system has been enacted. Cases oferror no doubt will always occur. The percentage of errors, as

compared with the number of registered dealings in Australia, is very

small. In New South Wales there were, in 1889, 209, 894 registereddealings, the average risk of error being only 2 cents for each

dealing. In Queensland the risk of error was only 1 cents, thenumber of registered dealings being 233,309. In Tasmania and in

Western Australia not a cent was paid for compensation for errors

during the whole time of operation, (Dumas's Lectures, supra, p. 96.)This system has been adopted in various countries of the civilized

world, including some of the States of the American Union, and

practical experience has demonstrated that it has been successful

as a public project.

The validity of some of the provisions of the statutes adopting theTorrens system has been the subject of judicial decision in the courts

of the United States. (People vs. Chase, 165 Ill., 527; State vs. Guilbert,

56 Ohio St., 575; People vs. Simon, 176 Ill., 165; Tylervs. Judges, 175Mass., 71.)

Act No. 496 of the Philippine Commission, known as the "LandRegistration Act," was copied substantially from the Massachussetts

law of 1898.

The Illinois and Massachusetts statutes were upheld by the supreme

courts of those States.

It is not enough to show a procedure to be unconstitutional

to say that we never heard of it before. (Tylervs.

Judges,supra; Hurtado vs. California, 110 U. S., 516.)

Looked at either from the point of view of history or of the

necessary requirements of justice, a proceedingin

rem dealing with a tangibleres may be instituted andcarried to judgment without personal service upon

claimants within the State or notice by name to thoseoutside of it, and not encounter any provision of either

constitution. Jurisdiction is secured by the power of the

court over theres. As we have said, such a proceedingwould be impossible, were this not so, for it hardly would do

to make a distinction between the constitutional rights ofclaimants who were known and those who were not

known to the plaintiff, when the proceeding is to bar all.

(Tylervs. Judges,supra.)

This same doctrine is annunciated in Pennoyervs. Neff (95 U. S., 714);

The Mary (9 Cranch, 126); Mankin vs. Chandler (2 Brock., 125);Brown vs. Levee Commission (50 Miss., 468); 2 Freeman, Judgments,

4th ed., secs. 606, 611.

If the technical object of the suit is to establish a claim

against some particular person, with a judgment whichgenerally, in theory at least, binds his body, or to bar someindividual claim or objection, so that only certain persons

are entitled to be heard in defense, the action is in

personam, although it may concern the right to or

possession of a tangible thing. If, on the other hand, the

object is to bar indifferently all who might be minded to

make an objection of any sort against the right sought tobe established, and if anyone in the world has a right to be

heard on the strenght of alleging facts which, if true, showan inconsistent interest, the proceeding is in rem. (Tylervs.

Judges,supra.)

In the case of Hamilton vs. Brown (161 U. S., 256) a judgment ofescheat was held conclusive upon persons noti fied by advertisement

to all persons interested. In this jurisdiction, by the provisions of theCode of Civil Procedure, Act No. 190, a decree allowing or

disallowing a will binds everybody, although the only notice of theproceedings given is by general notice to all persons interested.

The supreme court Massachusetts, in the case of Tylervs. Judges

(supra), did not rest its judgment as to the conclusive effect of thedecree upon the ground that the State has absolute power to

determine the persons to whom a man's property shall go at his

death, but upon the characteristics of a proceeding in rem. So we

conclude that the proceedings had in the case at bar, under all thefacts and circumstances, especially the absolute lack on the part of

the petitioners of any dishonest intent to deprive the appellee of anyright, or in any way injure him, constitute due process of law.

As to whether or not the appellee can succesfully maintain anaction under the provisions of sections 101 and 102 of the Land

Registration Act (secs. 2365, 2366, Compilation) we do not decide.

For these reasons we are of the opinion, and so hold, that thejudgment appealed from should be, and the same is hereby

reversed and judgment entered in favor of the petitioners inconformity with the decree of the lower court of February 12, 1908,

without special ruling as to costs. It is so ordered.

G.R. No. L-8936 October 2, 1915

CONSUELO LEGARDA, with her husband MAURO PRIETO, plaintiffs-

appellants,

vs.N.M. SALEEBY, defendant-appellee.

Singson, Ledesma and Lim for appellants.

D.R. Williams for appellee.

JOHNSON, J.:

From the record the following facts appear:

First. That the plaintiffs and the defendant occupy, as owners,

adjoining lots in the district of Ermita in the city of Manila.

Second. That there exists and has existed a number of years a stone

wall between the said lots. Said wall is located on the lot of the

plaintiffs.

Third. That the plaintiffs, on the 2d day of March, 1906, presented a

petition in the Court of Land Registration for the registration of theirlot. After a consideration of said petition the court, on the 25th day

of October, 1906, decreed that the title of the plaintiffs should be

registered and issued to them the original certificate provided for

under the torrens system. Said registration and certificate included

the wall.

Fourth. Later the predecessor of the defendant presented a petition

in the Court of Land Registration for the registration of the lot now

occupied by him. On the 25th day of March, 1912, the courtdecreed the registration of said title and issued the original

certificate provided for under the torrens system. The description ofthe lot given in the petition of the defendant also included said wall.

Fifth. Several months later (the 13th day of December, 1912) theplaintiffs discovered that the wall which had been included in thecertificate granted to them had also been included in the certificate

granted to the defendant .They immediately presented a petition inthe Court of Land Registration for an adjustment and correction of

the error committed by including said wall in the registered title of

each of said parties. The lower court however, without notice to thedefendant, denied said petition upon the theory that, during the

pendency of the petition for the registration of the defendant's land,

they failed to make any objection to the registration of said lot,including the wall, in the name of the defendant.

Sixth. That the land occupied by t he wall is registered in the name ofeach of the owners of the adjoining lots. The wall is not a joint wall.

Under these facts, who is the owner of the wall and the landoccupied by it?

The decision of the lower court is based upon the theory that

the action for the registration of the lot of the defendant was ajudicial proceeding and that the judgment or decree was binding

upon all parties who did not appear and oppose it. In other words,

by reason of the fact that the plaintiffs had not opposed the

registration of that part of the lot on which the wall was situate they

had lost it, even though it had been theretofore registered in theirname. Granting that theory to be correct one, and granting even

that the wall and the land occupied by it, in fact, belonged to the

defendant and his predecessors, then the same theory should beapplied to the defendant himself. Applying that theory to him, he

had already lost whatever right he had therein, by permitting theplaintiffs to have the same registered in their name, more than six

years before. Having thus lost hid right, may he be permitted to

regain it by simply including it in a petition for registration? Theplaintiffs having secured the registration of their lot, including the

wall, were they obliged to constantly be on the alert and to watch

all the proceedings in the land court to see that some one else wasnot having all, or a portion of the same, registered? If that question is

to be answered in the affirmative, then the whole scheme andpurpose of the torrens system of land registration must fail. The real

purpose of that system is to quiet title to land; to put a stop forever to


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any question of the legality of the title, except claims which were

noted at the time of registration, in the certificate, or which may arise

subsequent thereto. That being the purpose of the law, it wouldseem that once a title is registered the owner may rest secure,

without the necessity of waiting in the portals of the court, or sitting inthe "mirador de su casa," to avoid the possibility of losing his land. Of

course, it can not be denied that the proceeding for the registration

of land under the torrens system is judicial (Escueta vs. .Director ofLands, 16 Phil. Rep., 482). It is clothed with all the forms of an action

and the result is final and binding upon all the world. It is an action in

rem. (Escueta vs. Director of Lands (supra); Grey Alba vs. De la Cruz,17 Phil. rep., 49 Roxas vs. Enriquez, 29 Phil. Rep., 31; Tylervs. Judges,

175 Mass., 51 American Land Co. vs. Zeiss, 219 U.S., 47.)

While the proceeding is judicial, it involves more in its

consequences than does an ordinary action. All the world are

parties, including the government. After the registration is completeand final and there exists no fraud, there are no innocent third

parties who may claim an interest. The rights of all the world areforeclosed by the decree of registration. The government itself

assumes the burden of giving notice to all parties. To permit persons

who are parties in the registration proceeding (and they are all theworld) to again litigate the same questions, and to again cast doubt

upon the validity of the registered title, would destroy the very

purpose and intent of the law. The registration, under the torrenssystem, does not give the owner any better title than he had. If he

does not already have a perfect title, he can not have it registered.Fee simple titles only may be registered. The certificate of registration

accumulates in open document a precise and correct statement of

the exact status of the fee held by its owner. The certificate, in the

absence of fraud, is the evidence of title and shows exactly the realinterest of its owner. The title once registered, with very few

exceptions, should not thereafter be impugned, altered, changed,modified, enlarged, or diminished, except in some direct proceeding

permitted by law. Otherwise all security in registered titles would belost. A registered title can not be altered, modified, enlarged, or

diminished in a collateral proceeding and not even by a direct

proceeding, after the lapse of the period prescribed by law.

For the difficulty involved in the present case the Act (No. 496)

providing for the registration of titles under the torrens system affordsus no remedy. There is no provision in said Act giving the parties relief

under conditions like the present. There is nothing in the Act which

indicates who should be the owner of land which has beenregistered in the name of two different persons.

The rule, we think, is well settled that the decree ordering theregistration of a particular parcel of land is a bar to future litigation

over the same between the same parties .In view of the fact that allthe world are parties, it must follow that future litigation over the titleis forever barred; there can be no persons who are not parties to the

action. This, we think, is the rule, except as to rights which are noted

in the certificate or which arise subsequently, and with certain other

exceptions which need not be dismissed at present. A title once

registered can not be defeated, even by an adverse, open, andnotorious possession. Registered title under the torrens system can

not be defeated by prescription (section 46, Act No. 496). The title,

once registered, is notice to the world. All persons must take notice.No one can plead ignorance of the registration.

The question, who is the owner of land registered in the nameof two different persons, has been presented to the courts in other

jurisdictions. In some jurisdictions, where the "torrens" system has been

adopted, the difficulty has been settled by express statutoryprovision. In others it has been settled by the courts. Hogg, in his

excellent discussion of the "Australian Torrens System," at page 823,says: "The general rule is that in the case of two certificates of title,

purporting to include the same land, the earlier in date prevails,

whether the land comprised in the latter certificate be wholly, or only

in part, comprised in the earlier certificate. (Oelkers vs. Merry, 2Q.S.C.R., 193; Millervs. Davy, 7 N.Z.R., 155; Lloyd vs. Myfield, 7 A.L.T.

(V.) 48; Stevens vs. Williams, 12 V.L. R., 152; Register ofTitles, vs. Esperance Land Co., 1 W.A.R., 118.)" Hogg adds however

that, "if it can be very clearly ascertained by the ordinary rules of

construction relating to written documents, that the inclusion of theland in the certificate of title of prior date is a mistake, the mistake

may be rectified by holding the latter of the two certificates of title to

be conclusive." (See Hogg on the "Australian torrensSystem,"supra, and cases cited. See also the excellent work of

Niblack in his "Analysis of the Torrens System," page 99.) Niblack, indiscussing the general question, said: "Where two certificates purport

to include the same land the earlier in date prevails. ... In successiveregistrations, where more than one certificate is i ssued in respect of aparticular estate or interest in land, the person claiming under the

prior certificates is entitled to the estate or interest; and that person is

deemed to hold under the prior certificate who is the holder of, or

whose claim is derived directly or indirectly from the person who was

the holder of the earliest certificate issued in respect thereof. While

the acts in this country do not expressly cover the case of the issue oftwo certificates for the same land, they provide that a registered

owner shall hold the title, and the effect of this undoubtedly is thatwhere two certificates purport to include the same registered land,

the holder of the earlier one continues to hold the title" (p. 237).

Section 38 of Act No. 496, provides that; "It (the decree of

registration) shall be conclusive upon and against all persons,

including the Insular Government and all the branches thereof,whether mentioned by name in the application, notice, or citation,

or included in the general description "To all whom it may concern."

Such decree shall not be opened by reason of the absence, infancy,

or other disability of any person affected thereby, nor by any

proceeding in any court for reversing judgments or decrees; subject,

however, to the right of any person deprived of land or of any estateor interest therein by decree of registration obtained by fraud to file

in the Court of Land Registration a petition for review within oneyearafter entry of the decree (of registration), provided no innocent

purchaser for value has acquired an interest.

It will be noted, from said section, that the "decree ofregistration" shall not be opened, forany reason, in any

court, except for fraud, and not even for fraud, after the lapseof one year. If then the decree of registration can not be opened

forany reason, except for fraud, in a direct proceeding for that

purpose, may such decree be opened or set aside in a collateralproceeding by including a portion of the land in a subsequent

certificate or decree of registration? We do not believe the law

contemplated that a person could be deprived of his registered title

in that way.

We have in this jurisdiction a general statutory provision whichgoverns the right of the ownership of land when the same is

registered in the ordinary registry in the name of two persons. Article

1473 of the Civil Code provides, among other things, that when onepiece of real property had been sold to two different persons it shall

belong to the person acquiring it, who first inscribes it in the registry.This rule, of course, presupposes that each of the vendees or

purchasers has acquired title to the land. The real ownership in such

a case depends upon priority of registration. While we do not now

decide that the general provisions of the Civil Code are applicable

to the Land Registration Act, even though we see no objection

thereto, yet we think, in the absence of other express provisions, theyshould have a persuasive influence in adopting a rule for governing

the effect of a double registration under said Act. Adopting the rulewhich we believe to be more in consonance with the purposes and

the real intent of the torrens system, we are of the opinion and sodecree that in case land has been registered under the LandRegistration Act in the name of two different persons, the earlier in

date shall prevail.

In reaching the above conclusion, we have not overlooked the

forceful argument of the appellee. He says, among other things;

"When Prieto et al. were served with notice of the application of Teus

(the predecessor of the defendant) they became defendants in a

proceeding wherein he, Teus, was seeking to foreclose their right,

and that of orders, to the parcel of land described in his application.Through their failure to appear and contest his right thereto, and the

subsequent entry of a default judgment against them, they becameirrevocably bound by the decree adjudicating such land to Teus.

They had their day in court and can not set up their own omission as

ground for impugning the validity of a judgment duly entered by acourt of competent jurisdiction. To decide otherwise would be to

hold that lands with torrens titles are above the law and beyond thejurisdiction of the courts".

As was said above, the primary and fundamental purpose of

the torrens system is to quiet title. If the holder of a certificate cannotrest secure in this registered title then the purpose of the law is

defeated. If those dealing with registered land cannot rely upon the

certificate, then nothing has been gained by the registration and theexpense incurred thereby has been in vain. If the holder may lose a

strip of his registered land by the method adopted in the presentcase, he may lose it all. Suppose within the six years which elapsed

after the plaintiff had secured their title, they had mortgaged or sold

their right, what would be the position or right of the mortgagee orvendee? That mistakes are bound to occur cannot be denied, and

sometimes the damage done thereby is irreparable. It is the duty of

the courts to adjust the rights of the parties under such

circumstances so as to minimize such damages, taking into

consideration al of the conditions and the diligence of therespective parties to avoid them. In the present case, the appelleewas the first negligent (granting that he was the real owner, and if he

was not the real owner he can not complain) in not opposing theregistration in the name of the appellants. He was a party-defendant


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5

in an action for the registration of the lot in question, in the name of

the appellants, in 1906. "Through his failure to appear and to oppose

such registration, and the subsequent entry of a default judgmentagainst him, he became irrevocably bound by the decree

adjudicating such land to the appellants. He had his day in courtand should not be permitted to set up his own omissions as the

ground for impugning the validity of a judgment duly entered by a

court of competent jurisdiction." Granting that he was the owner ofthe land upon which the wall is located, his failure to oppose the

registration of the same in the name of the appellants, in the

absence of fraud, forever closes his mouth against impugning thevalidity of that judgment. There is no more reason why the doctrine

invoked by the appellee should be applied to the appellants than to

him.

We have decided, in case of double registration under the

Land Registration Act, that the owner of the earliest certificate is theowner of the land. That is the rule between original parties. May this

rule be applied to successive vendees of the owners of suchcertificates? Suppose that one or the other of the parties, before the

error is discovered, transfers his original certificate to an "innocent

purchaser." The general rule is that the vendee of land has nogreater right, title, or interest than his vendor; that he acquires the

right which his vendor had, only. Under that rule the vendee of the

earlier certificate would be the owner as against the vendee of theowner of the later certificate.

We find statutory provisions which, upon first reading, seem tocast some doubt upon the rule that the vendee acquires the interest

of the vendor only. Sections 38, 55, and 112 of Act No. 496 indicate

that the vendee may acquire rights and be protected against

defenses which the vendor would not. Said sections speak ofavailable rights in favor of third parties which are cut off by virtue ofthe sale of the land to an "innocent purchaser." That is to say, persons

who had had a right or interest in land wrongfully included in an

original certificate would be unable to enforce such rights against an"innocent purchaser," by virtue of the provisions of said sections. In

the present case Teus had his land, including the wall, registered in

his name. He subsequently sold the same to the appellee. Is theappellee an "innocent purchaser," as that phrase is used in said

sections? May those who have been deprived of their land byreason of a mistake in the original certificate in favor of Teus be

deprived of their right to the same, by virtue of the sale by him to the

appellee? Suppose the appellants had sold their lot, including thewall, to an "innocent purchaser," would such purchaser be included

in the phrase "innocent purchaser," as the same is used in said

sections? Under these examples there would be two innocent

purchasers of the same land, is said sections are to be applied.Which of the two innocent purchasers, if they are both to be

regarded as innocent purchasers, should be protected under theprovisions of said sections? These questions indicate the difficulty with

which we are met in giving meaning and effect to the phrase

"innocent purchaser," in said sections.

May the purchaser of land which has been included in a"second original certificate" ever be regarded as an "innocent

purchaser," as against the rights or interest of the owner of the first

original certificate, his heirs, assigns, or vendee? The first originalcertificate is recorded in the public registry. It is never issued until it is

recorded. The record notice to all the world. All persons are charged

with the knowledge of what it contains. All persons dealing with theland so recorded, or any portion of it, must be charged with notice

of whatever it contains. The purchaser is charged with notice of

every fact shown by the record and is presumed to know every fact

which the record discloses .This rule is so well established that it isscarcely necessary to cite authorities in its support (Northwestern

National Bankvs. Freeman, 171 U.S., 620, 629; Delvin on Real Estate,

sections 710, 710 [a]).

When a conveyance has been properly recorded such recordis constructive notice of its contents and all interests, legal and

equitable, included therein. (Grandin vs. Anderson, 15 Ohio State,286, 289; Orvis vs. Newell, 17 Conn., 97; Buchanan vs. Intentional

Bank, 78 Ill., 500; Youngs vs. Wilson, 27 N.Y., 351; McCabe vs. Grey, 20

Cal., 509; Montefiore vs. Browne, 7 House of Lords Cases, 341.)

Under the rule of notice, it is presumed that the purchaser has

examined every instrument of record affecting the title. Suchpresumption is irrebutable. He is charged with notice of every fact

shown by the record and is presumed to know every fact which an

examination of the record would have disclosed. This presumption

cannot be overcome by proof of innocence or good faith.

Otherwise the very purpose and object of the law requiring a recordwould be destroyed. Such presumption cannot be defeated byproof of want of knowledge of what the record contains any more

than one may be permitted to show that he was ignorant of theprovisions of the law. The rule that all persons must take notice of the

facts which the public record contains is a rule of law. The rule must

be absolute. Any variation would lead to endless confusion and

useless litigation.

While there is no statutory provision in force here requiring that

original deeds of conveyance of real property be recorded, yetthere is a rule requiring mortgages to be recorded. (Arts. 1875 and

606 of the Civil Code.) The record of a mortgage is indispensable toits validity. (Art .1875.) In the face of that statute would the courts

allow a mortgage to be valid which had not been recorded, upon

the plea of ignorance of the statutory provision, when third partieswere interested? May a purchaser of land, subsequent to the

recorded mortgage, plead ignorance of its existence, and by reason

of such ignorance have the land released from such lien? Could a

purchaser of land, after the recorded mortgage, be relieved from

the mortgage lien by the plea that he was abona fide purchaser?

May there be a bona fide purchaser of said land, bona fide in thesense that he had no knowledge of the existence of the mortgage?

We believe the rule that all persons must take notice of what thepublic record contains in just as obligatory upon all persons as the

rule that all men must know the law; that no one can plead

ignorance of the law. The fact that all men know the law is contraryto the presumption. The conduct of men, at times, shows clearly that

they do not know the law. The rule, however, is mandatory and

obligatory, notwithstanding. It would be just as logical to allow thedefense of ignorance of the existence and contents of a public

record.

In view, therefore, of the foregoing rules of law, may the

purchaser of land from the owner of the second original certificate

be an "innocent purchaser," when a part or all of such land had

theretofore been registered in the name of another, not the vendor?We are of the opinion that said sections 38, 55, and 112 should notbe applied to such purchasers. We do not believe that the phrase

"innocent purchaser should be applied to such a purchaser. He

cannot be regarded as an "innocent purchaser" because of thefacts contained in the record of the first original certificate. The rule

should not be applied to the purchaser of a parcel of land the

vendor of which is not the owner of the original certificate, or hissuccessors. He, in nonsense, can be an "innocent purchaser" of the

portion of the land included in another earlier original certificate. Therule of notice of what the record contains precludes the idea of

innocence. By reason of the prior registry there cannot be an

innocent purchaser of land included in a prior original certificateand in a name other than that of the vendor, or his successors. In

order to minimize the difficulties we think this is the safe rule to

establish. We believe the phrase "innocent purchaser," used in said

sections, should be limited only to cases where unregistered land hasbeen wrongfully included in a certificate under the torrens system.

When land is once brought under the torrens system, the record ofthe original certificate and all subsequent transfers thereof is notice

to all the world. That being the rule, could Teus even regarded as the

holder in good fifth of that part of the land included in his certificate

of the appellants? We think not. Suppose, for example, that Teus had

never had his lot registered under the torrens system. Suppose hehad sold his lot to the appellee and had included in his deed of

transfer the very strip of land now in question. Could his vendee be

regarded as an "innocent purchaser" of said strip? Would his vendeebe an "innocent purchaser" of said strip? Certainly not. The record of

the original certificate of the appellants precludes the possibility. Hasthe appellee gained any right by reason of the registration of the

strip of land in the name of his vendor? Applying the rule of notice

resulting from the record of the title of the appellants, the question

must be answered in the negative. We are of the opinion that theserules are more in harmony with the purpose of Act No. 496 than the

rule contended for by the appellee. We believe that the purchaserfrom the owner of the later certificate, and his successors, should be

required to resort to his vendor for damages, in case of a mistake likethe present, rather than to molest the holder of the first certificate

who has been guilty of no negligence. The holder of the first original

certificate and his successors should be permitted to rest secure intheir title, against one who had acquired rights in conflict therewith

and who had full and complete knowledge of their rights. The

purchaser of land included in the second original certificate, by

reason of the facts contained in the public record and the

knowledge with which he is charged and by reason of his

negligence, should suffer the loss, if any, resulting from suchpurchase, rather than he who has obtained the first certificate and

who was innocent of any act of negligence.

The foregoing decision does not solve, nor pretend to solve, allthe difficulties resulting from double registration under the torrenssystem and the subsequent transfer of the land. Neither do we now

attempt to decide the effect of the former registration in the ordinary

registry upon the registration under the torrens system. We areinclined to the view, without deciding it, that the record under the


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torrens system, supersede all other registries. If that view is correct

then it will be sufficient, in dealing with land registered and recorded

alone. Once land is registered and recorded under the torrenssystem, that record alone can be examined for the purpose of

ascertaining the real status of the title to the land.

It would be seen to a just and equitable rule, when two persons

have acquired equal rights in the same thing, to hold that the onewho acquired it first and who has complied with all the requirements

of the law should be protected.

In view of our conclusions, above stated, the judgment of thelower court should be and is hereby revoked. The record is hereby

returned to the court now having and exercising the jurisdictionheretofore exercised by the land court, with direction to make such

orders and decrees in the premises as may correct the error

heretofore made in including the land in the second original

certificate issued in favor of the predecessor of the appellee, as well

as in all other duplicate certificates issued.

Without any findings as to costs, it is so ordered.

G.R. No. 83383 May 6, 1991

SOLID STATE MULTI-PRODUCTS CORPORATION, petitioner,vs.

THE COURT OF APPEALS (Former Sixth Division) and THE INTESTATE

ESTATE OF ANTENOR S. VIRATA and the DEVELOPMENT BANK OF THE

PHILIPPINES, respondents.

Antonio M. Chavez for petitioner.

Rodolfo M. Dela Rosa for respondent Intestate Estate of Antenor S.

Virata.

MEDIALDEA, J.:p

This is a petition for review on certiorari of the decision of the Court of

Appeals which affirmed the decision of the trial court dismissing the

complaint filed by petitioner for quieting of title and declaringAntenor Virata as the true and lawful owner of the disputed

property.

The antecedent facts are as follows:

On September 28, 1982, petitioner, a domestic corporation, filed anaction for quieting of title against the respondent estate of Virata

alleging that it is the registered owner of a parcel of land located at

Imus, Cavite, with an area of 48,182 sq. meters, covered byCertificate of Title No. T-80889 of the Register of Deeds of Cavite,

which was issued on February 24, 1976; that Virata, during his lifetimethru the use of fraud, caused the issuance of Certificate of Title No. T-

11520 RT 1660 on September 1, 1959 thru an administrativereconstitution of a nonexistent original title covering the same parcelof land; that by reason of the said reconstitution and subsequent

issuance of TCT No. T-11520 RT 1660, there now exists a cloud on the

title of petitioner.

As gathered by the respondent appellate court and trial court, the

evidence for the petitioner consists of the following:

Pursuant to the provisions of Act No. 32, as

amended, Julian Pearanda submitted with theBureau of Lands, thru its District Land Office at

Rosario, Cavite an application dated November

22, 1968, in a verified Indorsement datedNovember 25, 1968, to purchase a friar land

which was subscribed and sworn to before

Manuel Cupino, Acting District Land Officer (Exh."D"). The application covers Lot No. 7449 of the

Imus Friar Lands Estate, situated at Barrio Molino,Bacoor, Cavite, containing an area of 4

hectares, 81 ares and 82 centares. Said

application was accompanied by a "SALAYSAY"(Exhibit "A") signed and sworn to by one Mabini

Legaspi before said District Land Officer Cupino,

purporting to transfer to, and to waive in favor of,Julian Pearanda, all the rights of executor to Lot

No. 7449.

Following the routine in cases of this nature,

District Land Officer Cupino referred to Land

Investigator Alberto Buhain for investigation andin a verified Indorsement dated November 25,

1968, said investigator made a Report (Exh. "B")

on the result of his investigation, to District Land

Officer Cupino, District Land Office No. III-8

Bureau of Lands, Rosario, Cavite, certifying thatapplicant Julian Pearanda is the actual

occupant of Lot No. 7449, has introduced

improvements consisting of upland rice andother seasonal crops; that Pearanda's

occupation of the land is derived through a

voluntary assignment of right of the former

occupant, Mabini Legaspi, and that the same isfree from claims and conflicts and that the said

applicant has established his rights over thesubject land, in view of which, said investigator

recommended that said lot be awarded to

applicant Julian Pearanda according to law.

Thereafter, the Report having been submitted to

Cupino, the latter directed investigator Buhain toprepare an Information Sheet (Exh. "G" up to "G-

3") and Cupino made the Appraisal Report (Exh.

"E-2"). The above requirements having been

accomplished, District Land Officer Cupino

forwarded Pearanda's application to the

Director of Lands, thru the Chief, LandManagement Division, recommending

disposition of Lot No. 7449 be made inaccordance with the findings of his office, to

Julian Pearanda, pursuant to the provisions of

C.A. of No. 32, as amended.

By second Indorsement dated December 16,

1968, Higinio P. Sunico, Chief, Land ManagementDivision, acting for and in behalf of the Director

of Lands, forwarded to the Secretary of

Agriculture and Natural Resources, theapplication of Julian Pearanda, recommending

that Lot No. 7449 be sold to said applicant

without public auction for a sum of P1,198.00

(Exh. "I") and by a 3rd Indorsement datedDecember 16, 1969, the application of JulianPearanda was returned by the Secretary of

Agriculture and Natural Resources, to the

Director of Lands, Manila, approving that salewithout auction, to Julian Pearanda, of lot

No. 7449. Pursuant to this approval, the Director

of Lands authorized the District Land Officer,Rosario, Cavite, to sell without auction to Julian

Pearanda, and directing that the sales contractshould be executed soonest (Exh- "I"). The

Director of Lands and Julian Pearanda

executed, therefore, Sales Contract No. V-447(Exh."K"), on February 28, 1969, for a

consideration of P1,198.00, to be paid in ten (10)

monthly installments, the first installment of

P290.00 having been paid upon execution of thesales contract and the payment of the P1,198.00

was fully paid on August 6, 1969 (Exh. "O").

The contract price of the land having been paid

by Pearanda, Undersecretary of Agriculture

and Natural Resources Isoceles Pascual, on

August 13, 1969, issued the final deed ofconveyance of lot No. 7449 (Exh."8") in favor of

Julian Pearanda and the said deed of

conveyance contains the physical and technical

description of the lot in question (See Exh. "S-l").

xxx xxx xxx

On the basis of said Deed of Conveyance No.

10431, the Register of Deeds of Cavite issued on

November 14, 1969 in favor of Julian PearandaTCT No. T-39631 (Exh. "Z-6") which on its face

shows it to have come from a direct transfer fromOCT no. 1002, and on February 17, 1976, the

plaintiff, by way of a Deed of Absolute Sale (Exh.

"Z") bought said Lot No. 7449 as a consequenceof which, TCT No. T-39631 was cancelled and

new TCT No. T-80889 was issued on February 24,

1976 to the plaintiff, Solid State Multi ProductsCorporation.

Plaintiff Solid State Multi-Products Corporationenrolled Lot No. 7449 with the issuance of Tax

Declaration No. 20893 which was superseded by

Tax Declaration No. 10973 and continued toreligiously pay the realty taxes as covered by

receipts of tax payments (Exh. for 1977 and Exh."7-19" for 1984) and the subject property is in its

actual possession since its acquisition from

Pearanda up to the present. (pp. 109-112, Rollo (Emphasis Ours)

On the other hand, respondent Virata denied the allegations in thecomplaint and presented evidence to prove his claim over the land.

The appellate court and trial court made the following findings:


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. . . on March 20, 1943, the Director of Lands, Mr.

Jose F. Dans, gave authority to sell at public

auction Lot No. 7449 of the Imus Estate,containing an area of 4.8182 hectares at the

price of not less than its appraised value ofP290.00 (Exh. X-33). Accordingly on April 20, 1943,

the Bureau of Friar Lands Agent Severo Rivera

issued a Notice fixing the public auction of LotNo. 7449, among others, on May 5, 1943 at 10:00

a.m. (Exh. 1). On said date, Mabini Legaspi

(appellee Virata's predecessor-in-interest)submitted a winning bid of P290.00 and paid

P29.00 (10% of the purchase price) and even

issued Bureau of Lands Official Receipt No. 77735

dated May 5, 1943 (Exh. 7). The subsequent

installments were paid on January 14, 1944, April24, 1944, August 17, 1944, and September 20,

1944 in the amounts of P29.00, P29.00, 87.00 and

P116.00, respectively. The payments wereevidenced by Official Receipts Nos. 78396,

783392, 784704 and 78466 (Exhs. 7-A, 7-B, 7-C andV)

On December 12, 1944, the Bureau of Lands,

through Mr. Vicente Tordesillas, sent a letter tothe Register of Deeds at Imus, Cavite, requesting

the issuance of the corresponding certificates oftitle to eight persons, among whom was Mabini

Legaspi, specifying with respect to him Lot No.

7449 with an area of 4.8182 located at Bacoor,

Cavite Exh. 2). Accordingly, the Register ofDeeds of Cavite issued TCT No. A-2188 to Mabini

Legaspi who held ownership of the property upto December 6, 1957 when he executed a Deed

of Sale transferring it to Antenor S. Virata (Exh. 6).The deed was registered with the Registry of

Deeds on December 10, 1957 . . . . On the same

day, December 10, 1957, the Register of Deeds

issued TCT No. 11520 (Exh. 12) to Antenor Virata .

. .

However, on June 7, 1959, the Provincial Capitol

building of Cavite which housed the Registry of

Deeds was burned, destroying land records andtitles in d registry among which were the records

relating to Lot No. 7449.

On September 1, 1959, the Registry of Deeds

administratively reconstituted the original of TCTNo. T-11520 based on owner's duplicatecertificate (Exh. 12) and renumbered the same

as TCT No. (T-11520) RT-1660.

xxx xxx xxx

The sentence of TCT No. 80889 issued in the

name of appellant on February 24, 1976 came to

the knowledge of Antenor Virata in August 1978

when he received a subpoena from the NationalBureau of Investigation (NBI) in connection with

its investigation of the conflicting land titles on

Lot No. 7449. Virata presented Mabini Legaspi ashis witness. NBI Agent Manuel C. Dionisio took the

sworn testimony of Mabini Legaspi on August 27,

1978 (Exh. 10) and submitted a written report(Exhs. 9 to 9-H) of his investigation on October 27,

1978. Mabini Legaspi in her sworn testimony (Exh.10) declared that she acquired Lot 7449 during

the Japanese occupation and in support of her

acquisition, she presented to NBI agent Dionisiothe carbon or duplicate original of the notice of

public auction and the letters dated December

12, 1944 of Vicente Tordesillas of the Bureau ofLands to the Register of Deeds requesting the

issuance of a certificate of title in favor of MabiniLegaspi, which documents were substituted on

the same occasion with xerox copies (Exh. 1 and

2) also marked as Exhibits 10-C and 10-D,respectively, after a comparison with the

duplicate originals. Legaspi also presented the

originals of the receipts of payment she made to

the Bureau of Lands, which were substituted with

xerox copies (Exhs. 7, 7-A, 7-B and 7-C, alsomarked as Exhibit 10-E, 10-F 10-G and 10-H) aftercomparison with the original. She (Mabini) also

testified on the sale of the lot in favor of AntenorVirata on December 6, 1957, presenting as proof

thereof, the duplicate or carbon original of the

Absolute Deed of Sale of Agricultural Land,

which was likewise, substituted with xerox copies(Exhs. 6 to 6-F, inclusive, also marked Exh. 11).

Mabini Legaspi testified that the originals ofExhibits 1 and 2 got lost. She said she placed the

documents on the table in her house afterreturning from the NBI investigation, thinking "all

the while that those documents will be useless

because I had my property sold." (Tsn., p. 17,December 19, 1984). She denied having sold the

land to Julian Pearanda, nor having waived her

right over the land in his favor (tsn., p. 12, March

18, 1985). (pp. 113-116, Rollo).

On June 15, 1985, the trial court rendered its decision, the dispositive

portion of which reads:

WHEREFORE, by preponderance of evidence,judgment is hereby rendered for defendant

Virata and against the plaintiff, to wit:

a. Dismissing the complaint which states nocause of action;

b. Recognizing that defendant Virata is the trueand lawful owner of the land covered by Transfer

Certificate of Title No. (T-11520) RT 1660 of the

Register of Deeds of the Province of Cavite andholding that the same is valid;

c. Declaring that Transfer Certificate of Title No. T-80889 in the name of plaintiff, the Solid State

Multi Products Corporation is null and void and of

no force and effect and is, therefore, ordered

cancelled;

d. Sentencing the plaintiff to pay the costs of theproceeding.

SO ORDERED. (p. 70, Rollo).

Not satisfied with the decision of the trial court, the petitioner

appealed to the Court of Appeals. On July 13, 1987, the respondentappellate court rendered its decision affirming the decision of the

trial court.

Hence, this petition was filed with the petitioner assigning thefollowing errors:

THE RESPONDENT COURT GROSSLY ERRED WHENIT IGNORED THE BASIC CONSIDERATION THAT THE

CONTESTED PROPERTY CAME FROM THE FRIAR

LANDS ESTATE THE DISPOSITION OF WHICH ISGOVERNED BY SPECIAL LAWS SPECIFYING THE

REQUIREMENTS FOR ITS ACQUISITION FROM THEGOVERNMENT THROUGH SALE, WHICH LAW AND

SPECIAL REQUIREMENTS SHOULD SERVE AS THE

MEASURE AGAINST WHICH THE EVIDENCE OF THEPARTIES TO THIS CASE SHOULD BE WEIGHED, SUCH

GROSS ERROR LEADING THE APPELLATE COURT

TO(A) ERRONEOUSLY INFER THE

EXISTENCE AND/OR DUEISSUANCE OF THE SUPPOSED

TCT NO. A-2188 (IN THE NAME

OF PRIVATE RESPONDENTSPREDECESSOR-IN INTEREST),

FROM DOCUMENTS THAT

CAME AFTER WERE BASED ON

SUCH TCT NO. A-2188,

CLEARLY BEGGING THE ISSUEWHICH IS PRECISELY WHETHER

OR NOT THE TRANSFER

CERTIFICATE OF TITLE WAS INFACT ISSUED IN COMPLIANCE

WITH THE FRIAR LANDS ACTAND CA-32 TO COVER THE

PROPERTY IN QUESTION;

(B) ERRONEOUSLY BASE ITS

DECISION IN FAVOR OF

PRIVATE RESPONDENT ONTCTs ISSUED BY THE REGISTER

OF DEEDS INSPITE OF THE

FACT THAT IT IS THE BUREAUOF LANDS UNDER THE

DIRECTION OF THE

SECRETARY OF AGRICULTUREAND COMMERCE (NATURAL

RESOURCES) WHICHDISPOSES FRIAR LANDS AND

NOT THE REGISTER OF DEEDS


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8

WHOSE RECORDS CAN BE

NO BETTER THAN THE RIGHT IT

HAS REGISTERED;

(C) ERRONEOUSLY

DISREGARD THE PATENTINADMISSIBILITY OF THE

DOCUMENTARY EVIDENCEOFFERED BY THE PRIVATE

RESPONDENT THE ORIGINALS

OF WHICH WERE NEVERPRESENTED BEFORE THE TRIAL

COURT;

(D) ERRONEOUSLY IGNORE

THE LACK OF PROBATIVE

VALUE OF SUCH

DOCUMENTARY EVIDENCE

SUCH LACK OF PROBATIVE

VALUE BEING PATENT ON THEFACE OF SUCH DOCUMENT;

(E) ERRONEOUSLY IGNORETHE VERITY THAT THE

DOCUMENTARY EVIDENCE

COULD SUPPORT NO MORETHAN THE FACT THAT THE

RESPONDENTS PREDECESSOR-

IN-INTEREST HAD MERELY A

QUESTIONABLE INCHOATE

AND INCOMPLETE RIGHT TOACQUIRE THE PROPERTY IN

QUESTION, WHICH

QUESTIONABLE INCHOATEAND IN FACT UNCOMPLETED

RIGHT CANNOT PREVAIL

OVER THE TITLE OFPETITIONER'S PREDECESSOR IN

INTEREST WHO WAS THEACTUAL POSSESSOR THAT

APPLIED FOR THE PURCHASE

OF THE LAND EVERY NEEDED

STEP FOR THE PURCHASE

HAVING BEEN PASSED UPON

AND RECORDED BY THEBUREAU OF LANDS WHOSE

RECORDS SHOW ONE ANDONLY TITLE ISSUED OVER THE

LAND, THAT IS, THE TITLE OFTHE PETITIONER'SPREDECESSOR-IN-INTEREST

(pp. 20, 22, Rollo)

We find the petition impressed with merit.

Since the assigned errors were interrelated, it would be well for this

Court to discuss them jointly.

Petitioner does not question the factual findings made by the

respondent appellate court and supported by the records (p.

22, Rollo). It does not however accept the legal conclusion made by

the appellate court and trial court that the registered title of private

respondent to the land should prevail over its own title.

Petitioner contends that Act No. 1120, otherwise known as the Friar

Lands Act provides the procedure for the sale and disposition of thefriar lands to private persons; that pursuant thereto, the acquisition

by petitioner's predecessor-in-interest Julian Pearanda of the

disputed Lot 7449, which was formerly part of the friar lands estate,was in compliance with all legal requisites laid down in Act No. 1120,

for the validity of the sale by the government in favor of Pearanda

of such friar lands.

It also argues that the sale of Lot No. 7449 to respondent's

predecessor, Mabini Legaspi, and the issuance of a certificate of title

in her favor was in violation of the Friar Lands Act as there was no

required approval by the Secretary of Agriculture and NaturalResources.

There is no dispute here that the land involved in this case is a friarland and that the laws which are applicable are Act No. 1120, know

as the Friar Lands Act, providing for the administration and

temporary leasing and sale of certain haciendas and parcels ofland, commonly known as friar lands, and Commonwealth Act No.

32 dated September 15, 1936 as amended by Commonwealth Act

No. 316 dated June 9, 1938, which provided for the subdivision and

sale of all the portions of the friar lands estated remainingundisposed of.

Sec. 12 of Act No. 1120 provides in part:

. . . the Chief of the Bureau of Public Lands shall

give the said settler and occupant a certificate

which shall set forth in detail that the

Government has agreed to sell to such settler

and occupant the amount of land so held by

him at the price so fixed payable as provided in

this Act at the Office of the Chief of the Bureauof Public Lands . . . and that upon the payment

of the final installment together with all accrued

interest the Government will convey to suchsettler and occupant the said land so held by

him by proper instrument of conveyance, which

shall be issued and become effective in themanner provided in section one hundred and

twenty two of the Land Registration Act.

Also, Sec. 18 of the same Act provides:

No lease or sale made by the Chief of the

Bureau of Public Lands under the provisions of

this Act shall be valid until approved by the

Secretary of the Interior.(Emphasis ours)

Similarly, Sec. 2 of C.A. No. 32, as amended by C.A. No. 316 provides

in part:

. . . The persons who, at the time of the

subdivision survey are actual and bonafide occupants of any portion of the Friar Lands

Estates, not exceeding ten hectares,shall be

given preference to purchase the portion

occupied at a private sale and at a price to be

fixed in such case, by the Director of

Lands, subject to the approval of the Secretaryof Agriculture and Commerce,after taking into

consideration its location, quality, and any othercircumstances as may affect its value, the

provisions of section twelve of Act Numbered

Eleven hundred and twenty, as amended, to thecontrary,

. . . (Emphasis ours)

It is clear from the foregoing provisions that the friar lands were

purchased by the government for sale to actual settlers and

occupants at the time said lands are acquired by the government.The Bureau of Lands shall first issue a certificate stating therein that

the government has agreed to sell the land to such settler or

occupant. The latter then shall accept the certificate and agree to

pay the purchase price so fixed and in the installments and at the

interest specified in the certificate.

The conveyance executed in favor of a buyer or purchaser, or the so

called certificate of sale, is a conveyance of the ownership of the

property, subject only to the resolutory condition that the sale maybe cancelled if the price agreed upon is not paid for in full.

The purchaser becomes the owner upon the issuance of thecertificate of sale in his favorsubject only to the cancellation thereof

in case the price agreed upon is not paid (Pugeda vs. Trias, No. L-

16925, March 31, 1962, 4 SCRA 849.)

Upon the payment of the final installment together with all accrued

interests, the government shall then issue a final deed ofconveyance in favor of the purchaser. However, the sale of such friar

lands shall be valid only if approved by the Secretary of Interior as

provided in Act No. 1120. Later laws, however, required that the saleshall be approved by the Secretary of Agriculture and Commerce. In

short, the approval by the Secretary of Agriculture and Commerce is

indispensable for the validity of the sale.

It is undisputed that petitioner's predecessor, Julian Pearanda was

the actual occupant of Lot 7449 when he filed his application to

purchase the said lot on November 22, 1968; that on December 16,1989, the Secretary of Agriculture and Natural Resources approved

the sale of the lot without auction to Pearanda; that a salescontract was executed between the Director of Lands and

Pearanda on February 28, 1969 for a consideration of P 1,198.00

payable in 10 monthly installments; that upon the full payment of the

price, the Undersecretary of Agriculture and Natural Resources

issued the final deed of conveyance of Lot No. 7449 in favor ofPearanda. Subsequently, the Register of Deeds of Cavite issued TCT

No. 39631 in the name of Pearanda, and when the latter sold the

land to petitioner, TCT No. 39631 was cancelled and TCT No. T-80889was issued in favor of the latter.

Clearly, the purchase of the friar land made by Pearanda was incompliance with law. The execution of the sales contract vested the

right of ownership in Pearanda over the land. There is no doubt

whatsoever that the said sale was valid as it was approved by the

Secretary of Agriculture and Natural Resources. Hence, the salemade by Pearanda in favor of the petitioner transferred the

ownership of the land in favor of the latter resulting in the proper

issuance of TCT No. T-80889 in its name.


9/15

9

On the other hand, the antecedents leading to the acquisition of

title by respondent Virata are clearly shown in the records. The

latter's predecessor, Mabini Legaspi bought Lot 7449 in a sale bypublic auction held on May 5, 1943 conducted by the Bureau of

Lands and friar lands agent Severino Rivera, and paid the purchaseprice thereof in installments in 1943; that on December 12, 1944, the

Bureau of Lands sent a letter to the Register of Deeds of Cavite

requesting the issuance of certificates of title to several personsincluding Mabini Legaspi, in whose favor TCT A-2188 was issued; that

subsequently on December 6, 1957, she sold the disputed land to

respondent Virata, which was evidenced by a deed of saleregistered with the Registry of Deeds of Cavite on December 10,

1957; that on the same date, TCT No. 11520 was issued in the name

of Virata. Due to the fire which gutted the building housing the

Registry of Cavite on June 7, 1959, the latter administratively

reconstituted the original of TCT No. 11520 on September 1, 1959,based on the owner's duplicate certificate and renumbered the

same as TCT No. 1120 RT 1660.

Apparently, the sale of the lot to Mabini Legaspi occurred much

earlier than the date of acquisition of same lot by petitioner's

predecessor, and the evidence presented by respondent Virataindicates that the latter's predecessor paid the purchase price of Lot

No. 7449 on installments.

Nowhere in the evidence for the respondent or in the records of this

case however, would show that a certificate of sale was ever issued

by the Bureau of Lands, which would vest ownership and title overthe land in favor of Mabini Legaspi. The existence of the official

receipts showing payment of the price of the land by Legaspi does

not prove that the land was legally conveyed to her without any

contract of sale having been executed by the government in herfavor. Viewed from all angles, the acquisition of the lot by Legaspiwas highly irregular and void, and not in compliance with the

procedure mandated by law for the sale of friar lands. For one thing,

Mabini Legaspi allegedly purchased the land in a sale at publicauction, which procedure is nowhere provided in Act No. 1120 or in

C.A. 32, as amended by C.A. 316. The laws expressly state that an

actual occupant of the land shall purchase the lot occupied by himat a private sale and not in a sale at public auction (Sec. 2, C.A. 32

as amended). Further, neither was there any deed of conveyanceissued to Legaspi by the government after the full payment of the

installments on the disputed lot.

Highly significant at this point is the ' e fact that there was neitherallegation nor proof that the sale was with the approval of the

Secretary of Agriculture and Commerce. The absence of suchapproval made the supposed sale null and void ab initio. Without

the certificate of sale to prove the transfer of the ownership of theland from the government Mabini Legaspi and without the requiredapproval of the sale by the Secretary of Agriculture and Commerce,

We find that Mabini Legaspi did not in any manner acquire

ownership over the land in 1943. The ownership or title over the friar

land, specifically Lot No. 7449 remained in the government until

Pearanda, petitioners predecessor, lawfully acquired ownershipover the same lot on February 28, 1969 by virtue of a sales contract

executed in his favor.

The issuance of a certificate of title in favor of Mabini Legaspi did notvest ownership upon her over the land nor did it validate the alleged

purchase of the lot, which is null and void. Time and again, it hasbeen held that registration does not vest title. It is merely evidence of

such title over a particular property. Our land registration laws do not

give the holder any better title than that what he actually has (Deman et al. vs. Court of Appeals, G.R. L- 46935 December 21, 1987,

156 SCRA 701; Cruz vs. Cabana, No. 56232, June 22, 1984, 129 SCRA656).

Although a period of one year has already expired from the time the

certificate of title was issued to Mabini Legaspi pursuant to thealleged sale from the government, said title does not become

incontrovertible but is null and void since the acquisition of the

property was in violation of law. Further, the petitioner herein is inpossession of the land in dispute. Hence, its action to quiet title is

imprescriptible (Coronel vs. Intermediate Appellate Court, No. 70191,October 29, 1987, 155 SCRA 270). In one case, this Court ruled that

an adverse claimant of a registered land who is in possession thereof

for a long period of time is not barred from bringing an action forreconveyance which in effect seeks to quiet title to the property

against a registered owner relying upon a Torrens title which was

illegally or wrongfully acquired (Caragay-Layno vs. Court of Appeals,

133 SCRA 718). In actions for reconveyance of property predicated

on the fact that the conveyance complained of was void ab initio, aclaim of prescription of the action would be unavailing (Corpus, etal. vs. Beltran, et al., 97 Phil. 722; Agne vs. Director of Lands, G.R. L-

40399, February 6, 1990, 181 SCRA 793). Being null and void, the salemade to Mabini Legaspi and the subsequent titles issued pursuant

thereto produced no legal effects whatsoever. Quod nullum est

nullum producit affectum (Agnes vs. Director of Lands,supra). There

being no title to the land that Mabini Legaspi acquired from thegovernment, it follows that no title to the same land could be

conveyed by the former to respondent Virata.

Even assuming that respondent Virata was a purchaser in good faith

and for value, the law is, as between two persons both of whom arein 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 (Baltazar vs.Court of Appeals, G.R. 78728, December 8, 1988, 168 SCRA 354,

emphasis ours). Further if a person happened to obtain property by

mistake or to the prejudice of another with or without bad faith, the

certificate of title which may have been issued to him under the

circumstances may and should be cancelled or corrected.

Our unavoidable conclusion in this case is that the title of petitioner

under the Torrens land system should be upheld considering that no

previous valid title to the same land existed.

ACCORDINGLY, the petition is hereby GRANTED and the decision of

the respondent Court of Appeals dated July 13, 1987 is herebyREVERSED. Petitioner Solid State Multi-Products Corporation is hereby

declared the true owner of the land covered by Transfer Certificate

of Title No. T-80889. The Register of Deeds of Cavite is ordered tocancer transfer Certificate of Title No. (T-11520) RT 1660 in the name

of respondent Antenor Virata.

SO ORDERED.

G.R. No. 171056 March 13, 2009

DINAH C. CASTILLO, Petitioner,

vs.

ANTONIO M. ESCUTIN, AQUILINA A. MISTAS, MARIETTA L. LINATOC,

AND THE HONORABLE COURT OF APPEALS, Respondents.

D E C I S I O NCHICO-NAZARIO,J.:

Before this Court is a Petition for Review on Certiorari1under Rule 45

of the Rules of Court filed by petitioner Dinah C. Castillo seeking the

reversal and setting aside of the Decision,2dated 18 October 2005,of the Court of Appeals in CA-G.R. SP No. 90533, as well as the

Resolution,3dated 11 January 2006 of the same court denying

reconsideration of its afore-mentioned Decision. The Court ofAppeals, in its assailed Decision, affirmed the Joint Resolution4dated

28 April 2004 and Joint Order5dated 20 June 2005 of the Office of

the Deputy Ombudsman for Luzon in OMB-L-A-03-0573-F and OMB-L-C-03-0728-F, dismissing petitioner Dinah C. Castillos complaint for

grave misconduct and violation of Section 3(e) of Republic Act No.3019, the Anti-Graft and Corrupt Practices Act, as amended, against

respondent public officers Antonio M. Escutin (Escutin), Aquilina A.

Mistas (Mistas) and Marietta L. Linatoc (Linatoc), together withprivate individuals Lauro S. Leviste II (Leviste) and Benedicto L.

Orense (Orense).

Petitioner is a judgment creditor of a certain Raquel K. Moratilla

(Raquel), married to Roel Buenaventura. In the course of her search

for properties to satisfy the judgment in her favor, petitionerdiscovered that Raquel, her mother Urbana Kalaw (Urbana), and

sister Perla K. Moratilla (Perla), co-owned Lot 13713, a parcel of land

consisting of 15,000 square meters, situated at Brgy. Bugtongnapulo,Lipa City, Batangas, and covered by Tax Declaration No. 00449.

Petitioner set about verifying the ownership of Lot 13713. She wasable to secure an Order6dated 4 March 1999 issued by Secretary

Horacio R. Morales, Jr. of the Department of Agrarian Reform (DAR)

approving the application of Summit Point Golf & Country Club, Inc.for conversion of several agricultural landholdings, including Lot

13713 owned by "Perla K. Mortilla, et al." and covered by TaxDeclaration No. 00449, to residential, commercial, and recreational

uses. She was also able to get from the Office of the City Assessor,

Lipa City, a Certification7stating that Lot 13713, covered by TaxDeclaration No. 00554-A, was in the name of co-owners Raquel,

Urbana, and Perla; and a certified true copy of Tax Declaration No.

00554-A itself.8Lastly, the Register of Deeds of Lipa City issued a

Certification9attesting that Lot 13713 in the name of co-owners

Raquel, Urbana, and Perla, was not covered by a certificate of title,whether judicial or patent, or subject to the issuance of a Certificate

of Land Ownership Award or patent under the Comprehensive

Agrarian Reform Program.

Only thereafter did petitioner proceed to levy on execution Lot

13713, and the public auction sale of the same was scheduled on 14

May 2002. Sometime in May 2002, before the scheduled publicauction sale, petitioner learned that Lot 13713 was inside the Summit

Point Golf and Country Club Subdivision owned by Summit PointRealty and Development Corporation (Summit Realty). She

immediately went to the Makati City office of Summit Realty to meet
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