G.R. No. 200558

Facts:

• Subject Property: A parcel of land that is 572 square meters located in Laguna
  • This land is registered in the name of Aquilina Martinez under a TCT.
• In 1945, after the liberation of Manila from the Japanese occupation, Aquilina found out that their property was ruined by the war. In order to rebuild the house, they borrowed money from Conrado Almazora.
• Aquilina gave the owner’s duplicate copy to Conrado, and Conrado’s family remained in possession of the property.
• Upon Aquilina’s death, the TCT was cancelled and a new one was issued to Aurora Vivar, Aquilina’s only heir.
• In 1949, an Adjudication and Absolute Sale of a Parcel of Registered Land was signed by Aurora and her husband, in favor of Conrado.
  • Aurora said this was fraudulent.
• By virtue of this document, Conrado transferred the title in his name on June 17, 1965.
• In 1994, Aurora learned that the title had been transferred to Conrado and the same had been sold to Fullway Development Corporation for Php4 million.
  • She sent a letter to the heirs of Conrado in 1995, demanding the delivery of the payment received for the sale.
• Aurora contended that the owner’s duplicate copy was only given to Conrado for safekeeping.
• Aurora asserted that through the years, she had demanded from Conrado the return of the owner’s duplicate, but the latter refused to return it.
• In 1996, Aurora filed a complaint for damages against the heirs of Conrado.

Issue:

Who owns the property?

Ruling:

Conrado and his heirs own the property.

The action is barred by laches and prescription.

It took Aurora more than 50 years to file an action. Her allegations that she had repeatedly demanded the return of the owner’s duplicate is self-serving and thus cannot be given weight.

Aurora slept on her rights for more than 50 years, impervious in asserting her ownership of the subject property, thereby losing the same by laches.

There was also no proof of fraud. Even though Aurora could have challenged the validity of the Adjudication and Absolute Sale of a Parcel of Registered Land to check if the signatures were forged, she did not so.

Laches

Laches is defined as the failure or neglect for an unreasonable and unexplained length of time to do that which, by exercising due diligence, could or should have been done earlier; it is negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it.

The principle of laches is a creation of equity which, as such, is applied not really to penalize neglect or sleeping upon one’s right, but rather to avoid recognizing a right when to do so would result in a clearly inequitable situation.

Four Elements of Laches

1. conduct on the part of the defendant, or of one under whom he claims, giving rise to the situation of which complaint is made for which the complaint seeks a remedy
2. delay in asserting the complainant’s rights, the complainant having had knowledge or notice, of the defendant’s conduct and having been afforded an opportunity to institute a suit
3. lack of knowledge or notice on the part of the defendant that the complainant would assert the right on which he bases his suit
4. injury or prejudice to the defendant in the event relief is accorded to the complainant, or the suit is not held to be barred

In the case at bench, the CA correctly held that all the elements of laches were present.

Kinds of Prescription

There are two kinds of prescription provided in the Civil Code:

1. Acquisitive (a.k.a adverse possession or usucapcion)
   1. Article 1106, par. 1 of the CC
2. Extinctive (a.k.a. litigation of action)
   1. Article 1106, par. 2 and Article 1139

In the case at bar, it was extinctive prescription, not acquisitive, which barred the action of petitioners. Thus, the action must fail not because respondents occupied the property but because the petitioners failed to institute their suit within the prescriptive period under Article 1114.

Important Dates

• 1945
  • The owner’s duplicate was given to Conrado for safekeeping.
• 1949
  • Adjudication and Absolute Sale was executed in favor of Conrado
• June 17, 1965
  • Conrado transferred the title in his name.

Because the petitioners contended that fraud attended the circumstances, they had 10 years (according to Article 1456 in relation to Article 1144) to file the petition by virtue of the constructive trust created by operation of law. Thus, they had until June 17, 1975 to file the case. But they filed it only in 1996.

G.R. No. 154409

June 21, 2004

Rule: Betweem two buyers of the same immovable property registered under the Torrens system, the law gives ownership priority to

1. The first registrant in good faith
2. First possessor in good faith
3. Buyer who in good faith present the oldest title

This provision, however, does not apply to properties not registered under the Torrens system.

• In 1993, Villafania sold a house and lot located at Pangasinan. She sold it to Rosenda Salazar and Rosita Go.
  • This sale was subject to annulment, but the RTC approved the Compromise Agreement submitted by the parties.
  • Villafania was given 1 year from the date of the Compromise Agreement to buy back the house and lot and failure to do so would mean that the previous sale in favor of Rosenda and Rosita shall remain valid and binding and that Villafania should then vacate the premises without need of demand.
• Villafania failed ot buy back the house and lot.
• Rosita and Rosenda declared the property in their name.
• However, unknown to Rosita and Rosenda, Willafania obtained a free patent over the land involved in 1988. The free patent was later on cancelled by a TCT in 1996.
• On October 16, 1997, Rosenda and Rosita sold the property to Spouses Abrigo.
  • Abrigo registered the sale under Act 3344
• On October 23, 1997, Villafania sold the same property to de Vera.
  • De Vera registered the sale under the Land Registration Act and a TCT was issued in her name.
• In November 1997, de Vera filed an action for forcible entry and damages against the Spouses Abrigo.
  • This was dismissed because of the agreement of the parties that neither of them can physically take possession of the property in question unless the case is terminated.
• RTC favored the Spouses Abrigo.
• CA favored de Vera.
  • It found the de Vera is a purchaser in good faith and for value because she relied on the Torrens title.

Issues:

1. WON the deed of sale executed by Villafania in favor of de Vera is valid
2. WON de Vera is a purchaser for value in good faith
3. Who between the parties has a better title?

Ruling:

Article 1544 of the Civil Code says

“Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property.

Whould there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good faith.”

This is in full accord with Section 51 of PD 1529 which provides that no deed, mortgage, lease, or other voluntary instrument (except a will) purporting to convey or affect registered land shall take effect as a conveyance or bind the land until its registration.

So if a sale is unregistered, it is binding only between the seller and the buyer.

Rule: If the land is registered under the LRA and has therefor a Torrens Title and it is sold but the subsequent sale is registered not under the LRA but under Act 3344, such sale is not considered registered as the term is used under Article 1544.

The registration must be held in the proper registry in order to bind the land.

Difference between Article 3344 and LRA:

Under Act 3344, registration of instruments affecting unregistered land is without prejudice to a third party with a better right. The phrase has been held to mean that the mere registration of a sale in one’s favor does not give him any right over the land if the vendor was not anymore the owner of the land having previously sold the same to somebody else even if the earlier sale was unrecorded.

Article 1544 of the Civil Code has no application to land not registered under Act 496.

• Reason: A purchaser of unregistered land at a sheriff’s execution sale only steps into the shoes of the judgment debtor and merely acquires the latter’s interest in the property sold as of the time the property was levied upon.

There is also a requirement of good faith.

Primus tempore, potior jure – first in time, stronger in right

A person dealing with registered land is not required to go behind the registry to determine the condition of the property since such condition is noted on the face of the register or certificate of title.

G.R. No. 185091

August 08, 2010

• Primo and Maria Mendoza owned lots in Batangas. In 1962, they subdivided the lots as follows:
  • Lot 1 in favor of Dimayuga
  • Lot 2 in favor of the Medozaas
  • Lot 3 in favor of Ronquillo
  • Lot 4 in favor of the City Government of Lipa
    • This had no title.
• All of the subdivided portions were issued titles except for the City of Lipa.
• Subsequently, Pansingin Primary School was erected in the lot. It had then been tax-declared in the name of the city government.
• But the Mendozas said that even if the city government sought permission from them to use the land as a school site, they never relinquished their rights to it.
• The Medozas then filed an unlawful detainer case after it demanded the city government to vacate the property.
• Both the CA and RTC found for the Mendozas.

Issue:

WON the CA erred in holding that the Mendozas were entitled to evict the Republic from the subject property

Ruling:

Yes.

A decree of registration is conclusive upon all persons, including the Government of the Republic and all its branches, whether or not mentioned by name in the application for registration or its notice. Title to the land, once registered, is imprescriptible.

The fact that the property was tax-declared under the name of the government does not defeat the Mendozas’ title.

However, it was evident that the Mendozas intended to cede the property to the city government permanently.

The Court holds that where the owner agrees voluntarily to the taking of his property by the government for public use, he thereby waives his right to the institution of a formal expropriation proceeding covering such property.

The Mendoza’s remedy is an action for just compensation, not ejectment.

G.R. No. 167232

July 31, 2009

Facts:

• Subject land: 240,146 m² of land in Quezon City
• The property was under the name of BC Regalada & Co.
• It was conveyed by BC Regalado to DBT Mar-Bay through a dacion en pago for services rendered by the former.
• In 1992, Panes et al filed a complaint for quieting of title with cancellation of TCT.
  • In the complaints, Panes alleged that he is the lawful owner of the subject property which he had declared for taxation purposes.
  • Panes et al also claimed that they are still in actual possession of the property and that their possession preceded WW2
• When Panes was in the process of complying with the publication requirements for the Notice of Initial Hearing with the LRA, it was discovered that the there existed an overlapping of the portions of land subject to Panes’ application.
  • By then, the portion had already been conveyed to DBT.
• The RD of Quezon City admitted that he committed a grave mistake when he said earlier that the TCT covered only one lot. He later realized that the TCT had 17 pages.
• Spouses Tabangcura also claimed that they were buyers in good faith and for value when they bought a house and lot from BC Regalado.
• RTC favored Panes et al.
  • Reasons:
    • Testimony of Panes that he occupied the subject property since 1936 when he was only 16 years old was not rebutted.
    • Panes’ occupation and cultivation of the property for more than 30 years in the concept of an owner vested in him the equitable ownership over the same by virtue of an approved plan.
    • The property was declared under Panes for tax declaration.
• DBT filed a motion for reconsideration based on the gorund of prescription and laches.
• A motion for intervention was filed in 2001 by Atty. Pulumbarit, representing the estate of Don Jose de Ocampo.
  • He alleged that the property was part of de Ocampo’s estate.
• RTC denied Atty. Pulumbarit’s motion for intervention.
• RTC then issued an order stating the need for a clarificatory hearing.
• DBT said that it could not secure a certified true copy of the TCT because of the fire in the office of the RD in Quezon City.
  • What they submitted instead is a certified true copy of the Consolidated Subdivision Plan.

Issues:

1. Did the RTC err in upholding DBT’s defenses of prescription and laches raised in the latter’s motion for reconsideration?
2. Which between DBT and the respondents have a better right over the property?

Ruling:

1. Yes. The RTC failed to consider that the action filed before it was not simply for reconveyance but an action for quieting of title which is imprescriptible.

An action for reconveyance can be barred by prescription:

• If based on fraud
  • 4 years from the discovery of the fraud and such discovery is deemed to have taken place from the issuance of the OCT
• If based on implied or constructive trust
  • 10 years from the date of the issuance of the OCT or TCT

However, the 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. If the plaintiff, as the real owner of the property also remains in possession of the property, the prescriptive period does not run against him.

Reason: One who is in actual possession of a piece of land claiming to be the owner thereof may wait until his possession is disturbed or his title is attacked before taking steps to vindicate his right, the reason for the rule being, that his undisturbed possession gives him a continuing right to seek the aid of a court of equity to ascertain and determine the nature of the adverse claim of a third party and its effect on his own title, which right can be claimed only by one who is in possession.

Laches will operate not really to penalize neglect or sleeping on one’s rights, but rather to avoid recognizing a right when to do so would result in a clearly inequitable situation.

• DBT has the better right.

It is settled that no title to registered land in derogation of the rights of the registered owner shall be acquired by prescription or adverse possession.

Prescription is unavailing not only against the registered owner but also against his hereditary successors.

Possession is a mere consequence of ownership where land has been registered under the Torrens system, the efficacy and integrity of which must be protected.

Panes’ claim of acquisitive prescription over the property is baseless. Under Article 1126 of the Civil Code, acquisitive prescription of ownership of lands registered under the LRA shall be governed by special laws. Act 496 as amended by PD 1529 provides that no titles to registered land in derogation of that of the registered owner shall be acquired by adverse possession.

There was no ample proof that DBT participated in the alleged fraud. The SC has the authority to review and reverse the factual findings of the lower courts when the findings of facts of the trial court are in conflict with those of the appellate court.

Dacion en pago is the delivery and transmission of ownership of a thing by the debtor to the creditor as an accepted equivalent of the performance of the obligation.

DBT here is an innocent purchaser for value.

G.R. No. 183448

June 30, 2014

Facts:

• A parcel of land was registered under the name of Bernardina Abalon.
• It was fraudulently transferred to Restituto Rellama.
  • Rellama subdivided the property and sold it to the following:
    • Spouses Peralta
    • Marissa, Leonil, and Arnel Andal
  • Both Spouses Peralta and the Andals registered their portions of the land under their names.
• Now, the heirs of Bernardina Abalon were claiming back the land, alleging it was sold under fraudulent circumstances.
• RTC and CA have the same findings of fact, but differ in their legal conclusions.
• The land was originally covered by OCT 16 and registered under Abalon’s name.
• A deed of absolute sale was executed over the property in favor of Rellama on June 10, 1975.
  • OCT 16 was then cancelled and a TCT was issued in the name of Rellama.
  • The subject property was then subdivided into three:
    • Lot A – sold to Spouses Peralt
    • Lot B – sold to Lotivio who transferred his ownership to Marissa, Leonil, and Arnel Andal through a deed of absolute sale
    • Lot C – also acquired by the Andals
• The Andals claimed that Abalon died without issue, and that they are the nephew and niece of Abalon.
  • They claimed that they acquired the property through succession.
• The Andals alleged that Rellama derived his title upon presentation of a Xerox copy of the alleged forged absolute sale.
• Rellama said that the owner’s duplicate copy was got lost in 1976 after the same was delivered to him.
  • But the Andals insisted that the owner’s duplicate remaind with Abalon and upon her death, it was delivered to the Andals.
• During trial, Rellama passed away.

Issue:

Can a forged instrument become the root of a valid title in the hands of an innocent purchaser for value, even if the true owner thereof has been in possession of the genuine title, which is valid and has not been cancelled?

Ruling:

The Torrens system cannot be used for the perpetration of fraud against the real owner of the registered land.

It is well-established that a person who is dealing with a registered parcel of land need not go beyond the face of the title. However, this rule has exceptions, including:

When the party has actual knowledge of facts and circumstances that would impel a reasonably cautious man to make such inquiry or when the purchaser has knowledge of a defect or the lack of title in his vendor or of sufficient facts to induce a reasonably prudent man to inquire into the status of the title of the property in litigation

One who falls within the exception can neither be denominated as an innocent purchaser for value nor a purchaser in good faith. Hence, he does not merit the protection of the law.

Who is an innocent purchaser for value?

• One who buys the property of another without notice that some other person has a right to or interest therein and who then pays a full and fair price for it at the time of the purchase or before receiving a notice of the claim or interest of some other persons in the property.

However, there are times when a fraudulent or forged document can give rise to a valid title.

• Ex: When the certificate of title was already transferred from the name of the true owner to the forger, and while it remained that way, the land was subsequently sold to an innocent purchaser. For then, the vendee had the right to rely upon what appeared in the certificate.
• The qualifying point here is that there must be a complete chain of registered titles.
  • In the instant case, there is no evidence that the chain of registered titles was broken in the case of the Andals.

The Spouses Perlata were buyers in bad faith.

• This was the finding of both RTC and CA and because the issue of WON someone is a buyer in bad faith is a factual one, the SC upheld that finding.

Did the Abalons have a legal standing?

• Yes. The CA ruled that they had legal standing, but it was because of ordinary prescription. The Supreme Court this was wrong. Their legal standing stems from succession.
• Reason why it cannot be because of ordinary prescription: The subject land is a titled property and so acquisitive prescription is not applicable.

G.R. No. 191432

September 02, 2015

• Spouses Melencio Diaz and Dolores Gulay are the owners of Lot 103 in Laguna. It consists of 499 square meters.
• The spouses had three children: Maria, Paciencia, and Esperanza.
  • Maria and Melencio predeceased Dolores.
• In 1955, Dolores, Paciencia, and Esperanza adjudicated Lot 103 to Dolores through a Deed of Extrajudicial Settlement.
  • But Maria’s children, who were still minors are that time, were not included in the settlement.
• In 1956, Dolores sold the lot to Isabel Torres through a Deed of Absolute Sale.
  • Subsequently, Torres sold the same to Teresa Tuazon in 1973.
• Maria’s children—Gloria, Felix, Angel and Flaviano Isagon—executed a Deed of Conformity.
  • In the deed, they honored the Deed of Extrajudicial Settlement executed by their grandmother and aunts subject to the condition that they would get 1/6 of the lot as share.
• Gloria, Feliz, and Flaviano also sold their shares to Teresa.
  • Angel, on the other hand, merely mortgaged his share to Teresa though a Kasulatan ng Sanglaan.
  • Angel’s share is 20.75 square meters.
• Angel refused and failed to redeem the mortgaged property.
• Teresa had an undated and reconstituted TCT to the property.
• In 1972, Teresa’s brother, Antonio Tuazon, allowed Angel and his wife to build a small hut on a portion of Lot 103 without Teresa’s knowledge.
  • Angel at that time was living near the seashore and he was afraid that they would be endangered during typhoons.
• In 2000, Teresa filed a complaint against the respondents before the Lupon Tagapamayapa, but they failed to reach any amicable settlement.
• In 2007, Teresa filed a complaint for unlawful detainer after sending a final demand letter to the respondents to which the latter did not reply.
• Angel said that Teresa’s TCT was obtained fraudulently, and that he still owned the lot since it was just mortgaged to Teresa.
• MTCC and RTC ruled in favor of Teresa Tuazon.
• CA reversed their decision

Issue:

• Who has the better right of physical possession between the registered owner as shown in the certificate of title and the mortgagor as shown in the Kasulatan ng Sanglaan?

Ruling:

It is the registered owner.

While a mortgage does not transfer ownership, the indefeasibility of a Torrens title should have been given primary consideration.

An action for unlawful detainer is summary in nature and cannot be delayed by a mere assertion of ownership as a defense. When the parties to an ejectment case raise the issue of ownership, the court may pass upon that issue only if needed to determine who between the parties has a better right to possess the property. Furthermore, the adjudication on the issue of ownership is only provisional, and subject to a separate proceeding that the parties may initiate to settle the issue of ownership.

A person who possesses a title issued under the Torrens system is entitled to all the attributes of ownership including possession.

A certificate of title cannot be subject to a collateral attack in an action for unlawful detainer. A collateral attack is made when, in an action to obtain a different relief, the validity of a certificate of title is questioned.

Articles 428 and 429 of the Civil Code

ARTICLE 428. The owner has the right to enjoy and dispose of a thing, without other limitations than those established by law.

ARTICLE 429. The owner or lawful possessor of a thing has the right to exclude any person from the enjoyment and disposal thereof. For this purpose, he may use such force as may be reasonably necessary to repel or prevent an actual or threatened unlawful physical invasion or usurpation of his property.

G.R. No. 175720

September 11, 2007

• Juanito Rodriguez owned a five-door apartment in Makati City. It is covered by a TCT.
• In 1983, he executed a Huling Habilin at Testamento allocating the following properties:
  • Apartments D and E
    • To Cresencia Rodriguez, his live-in partner
  • Apartment A
    • To Benjamin Rodriguez, his son
    • Note: Evangeline Rodriguez (one of the respondents) is Benjamin’s wife.
  • Apartment B
    • Buenaventura Rodriguez, his daughter
  • Apartment C
    • Belen Rodriguez, his daughter
• Note: The will was not probated.
• In 1984, however, Juanito executed a Deed of Absolute Sale over the whole property in favor of Cresencia. This was in consideration for Php20,000.
  • A new TCT is issued in Cresencia’s name.
• Cresencia allowed the respondents to occupy the property out of kindness and tolerance.
  • However, without her knowledge, the respondents separately leased the units to Magpantay, Navarro, and Escota.
• Cresencia filed a complaint for unlawful detainer against the respondents.
• Respondents, however, claimed ownership over the property by succession.
  • They contended that the Deed of Absolute Sale was void because they said that Cresencia exerted undue influence over their father who at that time was seriously ill.
  • They also contended that Cresencia acknowledged their ownership when they entered into a Partition Agreement in 1990, wherein they recognized each other as co-owners.
• The following evidences were considered:
  • Huling Habilin at Testamento executed by Juanito Rodriguez on October 27, 1983
  • Deed of Sale of the property executed by Juanito Rodriguez and the petitioner on June 14, 1984
  • TCT No. 150431 in the name of the petitioner
  • August 23, 1990 Partition Agreement executed by both the respondents and the petitioner
• MTC favored respondents.
• RTC reversed MTC.
• CA reinstated the MTC decision.

Issue:

Who is entitled to the physical and material possession of the property?

Ruling:

Cresencia Rodriguez is entitled to possession.

In a summary proceeding such as an unlawful detainer case, the issue of ownership can be tackled, but this is only provision, and does not bar or prejudice an action between the same parties involving title to the property.

Section 16 of Rule 70 of the Rules of Court

SEC 16. Resolving defense of ownership. – When the defendant raises the defense of ownership in his pleadings and the question of possession cannot be resolved without deciding the issue of ownership, the issue of ownership shall be resolved only to determine the issue of possession.

Thus, all that the trial court can do is to make an initial determination of who is the owner of the property so that it can resolve who is entitled to its possession absent other evidence to resolve ownership.

When respondents leased the apartments to other persons without her consent, their possession as well as those persons claiming right under them became unlawful upon their refusal to vacate the premises and to pay the rent.

Respondents failed to prove their right of possession, as the Huling Habilin at Testamento and the Partition Agreement have no legal effect since the will has not been probated. Before any will can have force or validity it must be probated. Based on the evidences, the Court finds that there is preponderance of evidence in favor of the petitioner’s claim.

Moreover, at the time the deed of sale was executed in favor of the petitioner, Juanito Rodriguez remained the owner thereof since ownership would only pass to his heirs at the time of his death. Thus, as owner of the property, he had the absolute right to dispose of it during his lifetime.

No collateral attacks on titles

Under Section 48 of Presidential Decree No. 1529, a certificate of title shall not be subject to collateral attack. It cannot be altered, modified or cancelled, except in a direct proceeding for that purpose in accordance with law.

It is settled that a Torrens Certificate of title is indefeasible and binding upon the whole world unless and until it has been nullified by a court of competent jurisdiction.

The Register of Deeds of Negros Occidental and the National Treasurer of the Republic of the Philippines

v.

Oscar Anglo, Sr.

 GR No. 171804,

Aug 05, 2015 

Facts:

• Subject property: two parcels of prime sugar land in Negros Occidental
• On June 29, 1960, Alfredo de Ocampo filed an application for registration of the two parcels of land.
  • This was contested by the Republic of the Philippines Bureau of Education
  • Reason: According to the Republic, the lots were bequeathed to the Bureau of Education by Esteban Jalandoni on September 21, 1926. And by virtue of the donation, they have a TCT.
• In 1965, the CFI ordered the registration of the lot in favor of de Ocampo. In the same year, an OCT was issued in his name.
• On January 6, 1966, de Ocampo sold one whole lot and a portion of the other lot to Anglo Sr. The deed of absolute sale was registered and annotated at the back of the OCTs.
• The Republic caused the annotations of notice of lis pendens in Anglo Sr.’s TCT.
  • Despite the notice of lis pendens, Anglo Sr., conveyed the lots to Anglo Agricultural Corporation in exchange for shares of stock.
• The CA ruled against de Ocampo and ordered his OCT and TCT to be declared null.
• De Ocampo passed away during the pendency of the litigation and left no property to his heirs. The only available remedy for Anglo Sr., and Anglo Agricultural Corporation was to recover the value of the lots from the Assurance Fund as provided under Act No. 496 and PD 1529.
• During trial, Anglo Sr. And Anglo Agricultural Corporation presented Atty. David Lozada, the then Registrar of Deeds of Negros Occidental.
  • He confirmed that ta the time of the sale between de Ocampo and Anglo Sr., there were no annotations of notices of lis pendens in de Ocampo’s OCT.
• The RTC ruled that Anglo Sr., and Anglo Agricultural Corporation were entitled to Php6,623,617 as damages payable under the Assurance Fund.
  • But they did not implead de Ocampo in their claim for damages.
• RP opposed this, saying that Anglo Sr., is a purchaser in bad faith because he did not ascertain the legal condition of the title he was buying.

Issues:

1. WON Anglo Sr., and Anglo Agricultural Corporation are entitled to an award of damages from the Assurance fund
2. WON Anglo Sr., and Anglo Agricultural Corporation should have impleaded de Ocampo in their complain for recovery of damages from the Assurance Fund

Ruling:

1. No. Respondents do not meet the criteria set to recover damages from the Assurance Fund.

In the sale to Anglo Sr., by de Ocampo, the former was in good faith. Individuals who rely on a clean certificate of title in making the decision to purchase the real property are often referred to as innocent purchasers for value and in good faith.

However, Anglo Sr. no longer had an interest over the lots after he had transferred these to Anglo Agricultural Corporation in exchange for shares of stock. Hence, he no longer has a claim from the Assurance Fund.

Anglo Agricultural Corporation cannot be considered as a transferee in good faith because it was already aware of the title’s notices of lis pendens. Thus, it also has no right to claim damages from the Assurance Fund.

The governing law at the time of the transactions in this case is Presidential Decree No. 1529. Based solely on Section 95 of Presidential Decree No. 1529, the following conditions must be met:

1. the individual must sustain loss or damage, or the individual is deprived of land or any estate or interest

2. the individual must not be negligent.

3. the loss, damage, or deprivation is the consequence of either

(a) fraudulent registration under the Torrens system after the land’s original registration, or

(b) any error, omission, mistake, or misdescription in any certificate of title or in any entry or memorandum in the registration book.

4. the individual must be barred or otherwise precluded under the provision of any law from bringing an action for the recovery of such land or the estate or interest therein.

Anglo Agricultural Corporation does not meet the first requisite. It no longer suffered a loss due to respondent Anglo Sr.’s undertaking to assume all liability in the agreement

• The respondents complied with the procedural requirement under PD 1529.

The law says (Section 96 in relation to Section 97) that it is required to implead the person causing the fraud, in this case, de Ocampo, in the claim for damages. However, in the proceedings before the Regional Trial Court, respondents Anglo, Sr. and Anglo Agricultural Corporation presented evidence with respect to the death of de Ocampo and the absence of properties that could constitute his estate.

RP did not present countervailing evidence to show that de Ocampo or his estate was still a viable party. Using preponderance of evidence, the Regional Trial Court could reasonably conclude that de Ocampo can no longer be impleaded.

Additional Notes:

What is the purpose of an assurance fund?

• It is used to protect individuals who rely on a property’s certificate of title as evidence of ownership.

Why was the Assurance Fund created?

• Because the Torrens system is not infallible. It is possible that through fraud or error, a person who is not the owner acquires a certificate of title over property. The Assurance Fund addresses this possibility.

Where does the Assurance Fund come from?

• For every certificate of title issued to a registered owner, he contributes ¼ of 1 percent of the assessed value of the real estate on the basis of the last assessment for taxation purposes as contribution to the Assurance Fund.
• If the value has not yet been assessed for taxation purposes, the contribution will be based on the value determined by two disinterested persons.

GR No. 164356

Jul 27, 2011

Facts:

The subjects of this case are the three parcels of land located in Agusan del Norte. Lots 1 and 2 were registered under the name of Amanda Yutiamco under OCT No. O-104 and TCT No. T-1428, respectively. Lot 2, on the other hand, was owned by Margarito Pabaus and covered by OCT P-8649.

A separate title, TCT No. T-1428, was subsequently issued to Amanda Yutiamco for Lot 2, thus partially canceling OCT No. O-104. Meanwhile, OCT No. P-8649 was issued to Margarito Pabaus on March 12, 1974 pursuant to Free Patent No. (X-2)102.

The heirs of Amanda Yutiamco subsequently filed for recovery of possession and damages against the heirs of Margarito Pabaus. They wanted to recover the land under OCT No. P-8649.

The Yutiamcos alleged that the Pabauses entered their lands, harvested coconuts, and built a house therein despite repeated objections from Moises Yutiamco.

The Yutiamcos avered that OCT No P-8649 issued to Margarito Pabaus is invalid as it substantially includes a land already covered by Decree No. N-130700 and OCT No. O-104 issued on July 9, 1970 in the name of Amanda Yutiamco.

The Pabauses admitted having gathered coconuts and cut trees on the contested properties, but asserted that they did so in the exercise of their rights of dominion as holders of OCT No. P-8649. They also contended that it was respondents who unlawfully entered their property and harvested coconuts therein.

It was later found out through a Relocation Survey Report that Lot 2 under Yutiamco was inside the lot covered by a title issued in favor of Pabaus. Meanwhile, a portion of Lot 1 under Yutiamco’s name is inside the lot of Pabaus as well. Thus, there is an overlapping in the issuance of titles.

The relocation survey report was made by three commissioners—a private surveyor who was court-appointed (Engr. Romulo Estaca), a representative of the respondents (Antonio Libarios, Jr.), and a representative of the plaintiffs (Engr. Regino Lomarda, Jr.).

A sketch plan prepared by Engr. Rosalinda De Casa was cited by the Pabauses to show that it was the Yutiamcos who encroached on their lot.

Engr. Estaca admitted that there were five missing corners so there was no precise and accurate ground verification made on the alleged overlapping.

RTC Ruling

• In favor of Yutiamcos
• It held that since the land in dispute was already under the private ownership of the respondents and no longer part of the public domain, the same could not have been the subject of a free patent.
• The trial court applied the rule that in case of two certificates of title issued to different persons over the same land, the earlier in date must prevail.
• Hence, respondents’ OCT No. O-104 is superior to petitioners’ OCT No. P-8649 which is a total nullity.

CA Ruling

• Affirmed the RTC
• emphasized that petitioners are bound by the findings contained in the Relocation Survey Report and the Relocation Plan because not only did they agree to the appointment of the three commissioners but the commissioner representing them also manifested his conformity to the findings.

Issues:

Did the CA commit a reversible error in affirming the RTC in its decision that the lot registered to Pabaus overlaps with that of Yutiamco?

Did the CA commit a reversible error in relying on the finding of the court-appointed geodetic engineer who disturbed the cadastral survey conducted by the government through the DENR?

Ruling:

The Supreme Court remanded the case to the RTC because the Yutiamcos failed to prove their claim of overlapping.

In overlapping of titles disputes, it has always been the practice for the court to appoint a surveyor from the government land agencies – the Land Registration Authority or the DENR – to act as commissioner.

In this case, the trial court appointed a private surveyor in the person of Engr. Estaca who actually conducted the relocation survey while the two other surveyors chosen by the parties expressed their conformity with the finding of encroachment or overlapping indicated in the Relocation Plan²⁷ submitted to the court by Engr. Estaca.

A case of overlapping of boundaries or encroachment depends on a reliable, if not accurate, verification survey.

For relocation surveys, we should refer to The Manual for Land Surveys in the Philippines (MLSP), which provides:

Section 593 – The relocation of corners or re-establishment of boundary lines shall be made using the bearings, distances and areas approved by the Director of Lands or written in the lease or Torrens title.

Section 594 – The data used in monumenting or relocating corners of approved surveys shall be submitted to the Bureau of Lands for verification and approval. New corner marks set on the ground shall be accurately described in the field notes and indicated on the original plans on file in the Bureau of Lands.

In this case, records failed to disclose that the basis for relocating the missing corners was submitted to the Bureau of Lands (now Land Management Bureau) for verification and approval as required by Section 594. This is crucial considering that the court-appointed commissioner is a private surveyor and not a government surveyor from the LRA or LMB-DENR.

As admitted by Engr. De Casa, during the cadastral survey they conducted from 1986 to 1996, they did not send a written notice to the landowner Amanda Yutiamco and that she plotted the boundaries of her property based merely on a tax declaration because the cadastral survey team failed to obtain copies of OCT No. O-104 and TCT No. T-1428 from the Registry of Deeds.³⁴

The MLSP specifically required that relocation of boundary lines is to be made using the bearings, distances and areas approved by the Director of Lands or indicated in the Torrens titles.

Conclusion:

Said cadastral map is not competent proof of the actual location and boundaries of respondents’ Lots 1 and 2.

Doctrines:

If the land covered by free patent was a private land, the Director of Lands has no jurisdiction over it. Such free patent and the subsequent certificate of title issued pursuant thereto are a nullity.

A free patent issued over a private land is null and void, and produces no legal effects whatsoever.

The Director of Lands has no authority to grant free patent to lands that have ceased to be public in character and have passed to private ownership.

Note:

Since the claim of overlapping has not been clearly established, it is premature to declare the free patent issued to Margarito Pabaus null and void. Thus, SC remanded the case instead of ruling on the merits.

Topic: Limitations on the Right of Ownership

Facts:

Apolonio Gopuco, Jr. was the owner of a 995-square meter lot in the vicinity of the Lahug Airport. It was expropriated by the government in 1949 for expansion. Gopuco refused to sell his land, but the CFI declared the sale a valid exercise of the expropriation powers of the State.

When the Mactan International Airport commenced operations, the Lahug Airport was ordered closed by then President Corazon C. Aquino in 1989. Gopuco wanted his land returned to him, so he offered to buy it back with the money paid to him.

In the same year, Congress passed Republic Act No. 6958 creating the Mactan-Cebu International Airport Authority (MCIAA) and in part providing for the transfer of the assets of the Lahug Airport thereto.

Gopuco claimed that he was offered a compromise settlement whereby he was assured that the expropriated lot would be resold to him for the same price as when it was expropriated in the event that the Lahug Airport would be abandoned. But he did not give any proof regarding this.

Issue:

When private land is expropriated for a particular public use, and that particular public use is abandoned, does its former owner acquire a cause of action for recovery of the property?

Ruling:

If land is expropriated for a particular purpose, with the condition that when that purpose is ended or abandoned the property shall return to its former owner, then, of course, when the purpose is terminated or abandoned the former owner reacquires the property so expropriated.

If upon the contrary, however, the decree of expropriation gives to the entity a fee simple title, then of course, the land becomes the absolute property of the expropriator, whether it be the State, a province, or municipality, and in that case the non-user does not have the effect of defeating the title acquired by the expropriation proceedings.

Gopuco argues that there is present, in cases of expropriation, an “implied contract” that the properties will be used only for the public purpose for which they were acquired. No such contract exists.