property - ownership (cases)

FRATERNITAS SCINTILLA LEGIS

D.B.T. MAR-BAY CONSTRUCTIONV. RICAReDO PANES, ET ALGR No. 167232, July 31, 2009

Nachura, J.Facts:

A parcel of land containing an area of 240,146 square meters situated in Novaliches, Quezon City was included in TCT No. 200519, entered on July 19, 1974 and issued in favor of BC Regalado& Co. It was later on conveyed by BC Regalado to Plaintiff DBT through dacion en pago for services rendered.

In June 1992, defendants Ricaredo Panes, et al filed a complaint for “Quieting of Title with Cancellation of TCT No. 200519” arguing that they are the lawful owner and claimant of the subject property and have declared the property for taxation under their name since 1985. They also alleged that their possession preceded the Second World War.

Respondents basically alleged that Regalado and DBT, through deliberate scheme and collusion with others, included the said property in their subdivision plan and then offered the same for sale to the public.

DBT argues that it is the legitimate owner of the subject property pursuant to a dacion en pago executed by BC Regalado.

The RTC ruled in favor of Respondents Recaredo and held that since he occupied the subject property since 1936 in the concept of an owner, he had equitable ownership of the same. The RTC also ruled that the subject property should not have been included in TCT No. 200519 registered in the name of BC Regalado and ceded to DBT.

Upon Motion for Reconsideration, the RTC reversed its ruling and held that prescription does not run against registered land; hence, a title once registered cannot be defeated even by adverse, open or notorious possession. Also, the RTC ruled that the action was already barred by prescription/laches since they did not assert their rights when Regalado registered the subject property in 1974; and later developed, subdivided and sold the same to individual lot buyers.

On appeal, the CA reversed the RTC ruling and reinstated the earlier RTC ruling holding that the properties described and included in TCT No. 200519 are located in different part than where the subject property is located. CA also opined that the defense of lachs and prescription was merely an afterthought on the part of DBT.

Issue: (1) Is respondents barred by laches/prescription in filing the action against DBT?

(2) Which between DBT and respondents have a better right over the subject property?

Ruling:(1) No, the action filed before the RTC was not simply for reconveyance but an action for quieting of tile which is imprescriptible.

An action for reconveyance based on fraud must be filed within four years from the discovery of the fraud and such discovery is deemed to have taken place from the issuance of the OCT. On the other hand, an action for reconveyance based on an implied or constructive trust prescribes in 10 years from the date of the issuance of the OCT or TCT. The rule is that registration of an instrument in the Register of Deeds constitutes constructive notice to the whole world and therefore the discovery of the fraud is deemed to have take place at the time of the registration.

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HOWEVER, the prescriptive period applies only if there is an actual need to reconvey the property as when the plaintiff is not in possession. If the plaintiff, as the real owner also remains in possession, the prescriptive period to recover title and possession of the property does not run against him. In such a case, the action for reconveyance would be in the nature of a suit for quieting of title which is imprescriptible.

(2) DBT however has better right.

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

Art. 1126 of the Civil Code in connection with Sec. 46 of the Land Registration Act clearly supports this rule. Prescription is unavailing not only against the registered owner but also against his hereditary successors. Possession is a mere consequence of ownership where the land has been registered under the Torrens system, the efficacy and integrity of which must be protected.

Thus, respondents’ (Recaredo Panes, et al) claim of acquisitive prescription over the subject property is baseless. Under Art. 1126, acquisitive ownership of lands registered under the Land Registration Act shall be governed by special laws. Correlatively, Act No. 496 as amended provides that “no title to registered land in derogation of that of the registered owner shall be acquired by adverse possession.”

Furthermore, there was no evidence that DBT participated in the alleged fraud. It is an innocent purchaser for value and good faith which, through dacion en pago, duly entered into with BC Regalado, acquired.

Torrens systemWhile the Torrens system is not a mode of acquiring title, but merely a system of registration of

titles to lands, justice and equity demand that the titleholder should not be made to bear the unfavorable effect of the mistake or negligence of the State’s agents, in the absence of proof of his complicity in a fraud or manifest damage to third persons.

The real purpose of the Torrens system is to quiet the title to land and put a stop forever to any question as to the legality of the title, except claims that were noted in the certificate at the time of the registration or that may arise thereto. Otherwise, the integrity of the Torrens system would forever be sullied by ineptitude and inefficiency of land registration officials, who are ordinarily presumed to have regularly performed their duties.

Thus, where innocent third persons relying on the correctness of the certificate of title thus issued acquired rights over the property, the court cannot disregard those rights and order the cancellation of the certificate. The effect of such outright cancellation will be to impair public confidence in the certificate of title. The sanctity of the Torrens system must be preserved; otherwise, everyone dealing with the property registered under the system will have to inquire in every instance on whether the title had been regularly or irregularly issued, contrary to the evidence purpose of the law.

Every person dealing with the registered land may safely rely on the correctness of the certificate of title issued therefor, and the law will in no way oblige him to go behind the certificate to determine the condition of the property.



Laura Paraguya v. Spouses Alma and EmeterioCrucilloGR No. 200265, December 2, 2013

Perlas-Bernabe, J.

Facts:On December 1990, Paraguya filed a complaint against the Crucillosfor the annulment of OCT

No. P-17729 and other related deeds. She claimed that they obtained the title through fraud and deceit and that she is the lawful heir to the subject properties left by her paternal grandfather (Estabillo) while further alleging that Alma Escurel-Crucillo was merely an administrator.

Crucillo on the other hand filed a motion to dismiss averring that Paraguya’s complaint had already been barred by laches and prescription. The Crucillo’s allege that Alma through the late Angel Escurel, applied for a free patent over the subject properties which resulted to the issuance of Free Patent No. V-3 005844 under OCT No. P17729.

Both parties alleged that the subject property was originally owned by Estabillo, a common ancestor of the parties.

Paraguya presented a document called Recognition of Ownership and Possession dated December 1, 1972 executed by her siblings and a titulo de posesorio issued sometime in 1983 or 1985 in the name of Estabillo.The RTC ruled in Paraguya’s favor. When raised in the CA, decision was overturned and thus the issue was raised before the SC.

Issue:Whether the CA was correct in dismissing the complaint of Paraguya to annul the title

Ruling:Yes. It has long been established that a Torrens certificate of title is conclusive proof of

ownership. However, a party may seek the annulment of such title on the basis of fraud or misrepresentation but only within the time limit prescribed by law otherwise it would be barred.

Section 32 of PD 1529 provides that the period to challenge a decree of registration shall be 1 year from the date of its entry and after that time has lapsed, the Torrens certificate of title issued becomes incontrovertible and indefeasible.

The court must sustain the CA’s decision to dismiss Paraguya’s complaint since it was only on December 19, 1990 or more than 11 years from the Torrens title’s date of entry that the complaint was filed.

The court also makes noteworthy the fact that the complaint was in the nature of an action for reconveyance as it prayed that the trial court order the Crucillo’s to surrender the ownership and possession of the properties in question vacatingthem altogether. It must be therefore dismissed for the same reason as the law provides that actions for reconveyance prescribe in 10 years from the date of the issuance of the certificate of title.

Spanish titles



Even if Section 32 of PD 1529 and the above-mentioned prescriptive period is to be discounted, Paraguya’s complaint must still be dismissed as she only relied on the tituloposesorio mentioned above. Based on Section 1 of PD 892, Spanish titles can no longer be used as evidence of ownership after 6 months starting from August 16, 1976. Under the said law, the system of Registration under the Spanish Mortgage Law is discontinued and all lands recorded under said system which are not yet covered by the Torrens title shall be deem unregistered lands.

Francisco Calma v. Arsenio Santos, et al.GR No. 161027, June 22, 2009

Nachura, J.

- Admission of Ownership -

Facts:The subject of this controversy is a property known as “Calangain Fishpond”, with a total area of

480,229 square meters, located in Calangain, Lubao, Pampanga. It is composed of several parcels of lands (Lot Nos. 1094, 7858, 7859, 1093) covered by a twoTCTs registered in the names of Celestino Santos, a widower with half a share and his 12 children.

On April 11, 1975, Celestino Santos died. Aside from his heirs named in the two certificates of title, Celestino had two other children, RUBEN and FEDERICO, who are now both deceased. On various dates, petitioner Francisco Calma purchased shares from the 8 children of Celestino, the shares owned by them in their own right and the shares inherited from their father. One of Celestino’s children, Arsenio, however claimed that the share of Celestino was already sold to him one month before he died covered by a Deed of Absolute Sale which is duly notarized.

Petitioner then demanded from the other co-owners of the property the identification and segregation of the shares he purchased from the rest of the fishpond. Due to the failure of respondents to cause the division as demanded, petitioner filed a complaint for specific performance and partition.

In their answers, respondents, in effect, admitted the existence of the deeds of absolute sale and the other agreements covering the sale and transfer of the undivided shares to the Fishpond in favor of petitioner; although they alleged that the sale and agreements were all suffering from grave and vital defects which should vitiate their validity and effectiveness.

Issue:(1) Whether the sale and various agreements are valid(2) Who owns the ½ share of Celestino when some of the children have sold their rights thereto to Calma as well.

Ruling:(1) Yes, the conveyances by the deeds of absolute sale and the receipts of payment in favor of Calma involving the shares of the Santos siblings in their own right cannot be void. Art. 493 provides that “each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and he may therefore alienate, assign and mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved. Thus, the co-owners, being owners of their respective aliquots



or undivided share in the subject property can validly and legally dispose of their share even without the consent of all the other co-heirs.

However, since Celestino had already sold his share to Arsenio, the co-heirs should return whatever amount they received from petitioner Calma corresponding to the ½ share of Celestino which they were supposed to have inherited and sold to petitioner.

(2) It is Arsenio. Calma acknowledge the rentals due to Arsenio for Arsenio’s share in the fishpond although the receipt stated that the exact number of hectares is still to be determined. By acknowledging his obligation to pay rentals, he also impliedly admitted the ownership of Arsenio over the ½ share of Celestino.

CamiloBorromeo v. AntoniettaDescallarGR No. 159310, February 24, 2009

Puno CJ.-Foreign Ownership of Lands -

Facts:Wilhelm Jambrich, an Austrian, arrived in the Philippines in 1983 after he was assigned by his

employer, to work at a project in Mindoro. In 1984, he transferred to Cebu and met respondent AntoniettaOpalla-Descallar, a separated mother of two boys who was working as a waitress. Jambrich befriended respondent and asked her to tutor him in English which the latter accepted to help her defray her expenses. The tutorials were held in Antonietta’s residence at a squatters’ area in Gorordo Avenue. The two fell in love and decided to live together. They bought a house and lots at Agro-Macro Subdivision, Cabancalan, Mandaue City. Jambrich also formally adopted respondent’s two sons. A Deed of Absolute Sale issued in their favor. However registration was refused on the ground that Jambrich was an alien and could not acquire alienable lands of the public domain. Consequently, Jambrich’s name was erased from the document.

However, the idyll lasted only until April 1991. By then, respondent found a new boyfriend while Jambrich began to live with another woman. In 1989, Jambrich purchased an engine and some accessories for his boat from CamiloBorromeo (petitioner), for which he became indebted to the latter for about P150,000.00. To pay for his debt, he sold his rights and interests in the Agro-Macro properties to petitioner for P250,000, as evidenced by a “Deed of Absolute Sale/ Assignment.” On July 26, 1991, when petitioner sought to register the deed of assignment, he discovered that titles to the three lots have been transferred in the name of respondent, and that the subject property has already been mortgaged.

On August 2, 1991, petitioner filed a complaint against respondent for recovery of real property before the RTC of Mandaue City. Petitioner alleged that respondent as buyers do not reflect the true agreement of the parties since respondent did not pay a single centavo of the purchase price and was not in fact a buyer.

In her Answer, respondent claimed that she “solely and exclusively used her own personal funds to defray and pay for the purchase price of the subject lots in question,” During the trial respondent presented evidence showing her alleged financial capacity to buy the disputed property with money from a supposed copra business. Petitioner, in turn, presented Jambrich as his witness and documentary evidence showing the substantial salaries whichJambrich received while still employed by the Austrian company, Simmering-Graz Panker A.G.



The RTC decided in favor of Borromeo and declared him owner of the disputed property by virtue of the assignment executed by Jambrich. Since Jambrich is owner of the property for respondent has no financial capacity to participate in the purchase, he has all the right to transfer the ownership of the said property to another.

On appeal, the CA reversed the decision of the RTC saying that Jambrich never had title to the property since it was never issued in his name and thus, validity of the title of the subsequent Filipino purchasers are absent in the case at bar.

Issue:WhetherJambrich has interest and ownership to the property in dispute which, if there is, would constitute a valid transfer of ownership to the petitioner.

Ruling:Yes, Jambrich has interest and ownership to the property in dispute and there is a valid transfer

of ownership to the petitioner. The evidence clearly shows, as pointed out by the trial court, who between respondent and

Jambrich possesses the financial capacity to acquire the properties in dispute. At the time of the acquisition of the properties in 1985 to 1986, Jambrich was gainfully employed at Simmering-Graz PankerA.G., an Austrian company. On the other hand, respondent was employed as a waitress from 1984 to 1985 with a monthly salary of not more than P1,000.00. Her allegations of income from a copra business were unsubstantiated. The supposed copra business was actually the business of her mother and their family, with ten siblings. She has no license to sell copra, and had not filed any income tax return. The DSWD Home Study Report whichwas conducted when Jambrich seek to adopt the respondent’s children disclosed that the latter had financial problem before she meet Jambrich. Thus, Jambrich has allthe authority to transfer all his rights, interests and participation over the subject properties to petitioner by virtue of the Deed of Assignment he executed on July 11, 1991.

Further, the rule that co-ownership applies to a man and a woman living exclusively with each other as husband and wife without the benefit of marriage, but are otherwise capacitated to marry each other, does not apply. In the instant case, respondent was still legally married to another when she and Jambrich lived together. Presumptions of co-ownership and equal contribution do not apply.

The fact that it’s only the respondent’s name that appears on the registration is not a conclusive evidence of ownership. It is settled that registration is not a mode of acquiring ownership. It is only a means of confirming the fact of its existence with notice to the world at large. Certificates of title are not a source of right. The mere possession of a title does not make one the true owner of the property.

Ownership of land by aliensRespondent argued that aliens are prohibited from acquiring private land. But jurisprudence

provides that if land is invalidly transferred to an alien who subsequently becomes a Filipino citizen or transfers it to a Filipino, the flaw in the original transaction is considered cured and the title of the transferee is rendered valid.



In the instant case, the transfer of land from Agro-Macro Development Corporation to Jambrich, who is an Austrian, would have been declared invalid if challenged, had not Jambrich conveyed the properties to petitioner who is a Filipino citizen.

Heirs of Bernardo Ulep v. Sps. DucatGR No. 59284, January 27, 2009

Austria-Martinez, J.

Facts:This involves a parcel of agricultural land with an area of 4,992 square meters located in La

Trinidad, Benguet described as Lot No. 4 in a survey plan for Agustin Ulep on April 4, 1964 and approved on June 3, 1964.

Prior to the approval of the Survey Plan, Agustin Ulep and petitioner Cristobal Ducat executed an agreement whereby Ducat would cause and conduct all the necessary procedures for the registration and acquisition of title over several parcels of land occupied by Ulep in the concept of an owner which includes the land in dispute. Before Ducat was able to accomplish his task, he died and his son CecilioUlep took over to administer the properties.

Ducat continued working to acquire titles for the lands of Ulep. The subject property which was first denominated as Lot No. 4, was later referred to as Lot No. 22 in an amended survey plan prepared for Ducat and likewise approved by the Bureau of Lands on October 1982. Ducat then applied for a free patent over the land which was granted in November 14, 1984 in the names of the spouses.

On November 1994, the heirs of Bernardo Ulep filed the complaint for reconveyance with damages against the spouses alleging that the 4,992 square meter parcel of land is owned by their grandfather Agustin Ulep and Ducat fraudulently maneuvered and caused the improper amendment in the original survey plan to alter the description of the land from Lot. No. 4 to Lot No. 22 and ultimately succeeded in having the said property registered in his name and of his wife.

Both the MTC and the RTC ruled in favor of the spouses Ducat. However upon MR with the RTC, the same set aside its earlier judgment and ordered the Spouses to reconvey the disputed property to the Uleps.

However, the CA overturned this ruling and reinstated the earlier ruling of the MTC of La Trinidad.

Issue: W/N CA erred in ruling that the Uleps failed to prove their allegation of fraud on the part of the spouses Ducat in the titling of the subject property.

Ruling:No, the CA ruled correctly. It is well-settled that in order for an action for reconveyance based on fraud to succeed, the

party seeking reconveyance must prove by clear and convincing evidence his title to the property and the fact of fraud.

Petitioners only averred that the erasures and amendments to the Waiver of Rights executed by Bernardo Ulep is proof of the fraud perpetrated by the respondents to obtain title to the land in dispute.



Furthermore, the Affidavit of Transfer of Real Property executed by Cecilio and Bernardo Ulep in favor of Ducat is a very solid piece of evidence in favor of respondent spouses. It constitutes an admission against interest made by Bernardo Ulep. Being an admission against interest, the documents are the best evidence which affords the greatest certainty of the facts in dispute. The rational for the rule is based on the presumption that no man would declare anything against himself unless such declaration was true. Thus, it is fair to presume that the declaration corresponds with the truth, and it is his fault if it does not.

Bernardo Ulep’s admission against his own interest is binding on his heirs, herein petitioners. Sps. Dominador Narvaez v. Sps. Rose OgasAlciso

GR No. 165907, July 27, 2009Carpio, J.

Facts: Ogas owned a parcel of land, a portion of which was subject to a 30-year lease agreement with

Esso Standard Eastern, Inc. Ogaslater sold the property to Alciso.

Alciso later on entered into a Deed of Sale with Right to Repurchase with Jaime Sansano for Php 10,000. Alciso later repurchased the property from Samsano. On March 28, 1980 Alciso entered into a Deed of Absolute Sale with Bate for Php 50,000.

Bate, on August 14, 1981 entered into a Deed of Sale of Realty, selling the property to the spouses Narvaez for Php 80,000. In 1982 Narvaez built a commercial building on the property amounting to 300,000.

Alciso then demanded that a stipulation be included in the Deed of Realty allowing her to repurchase the property from Narvaez, which was complied with by Narvaez with the statement in the Deed: “The seller (Bate) carries over the manifested intent of the original seller of the property (Alciso) to buy back the same at a price under such conditions as present buyers (Narvaez) may impose.”

Alciso alleged that she informed Narvaez that she wanted to repurchase the property. Narvaez demanded Php 300,000 but Alciso was willing to pay only Php 150,000.

Alciso filed a complaint on June 15, 1984 praying that the above mention deeds be annulled, that the RD be ordered to cancel the corresponding TCT’s, that Narvaez be ordered to reconvey the property and that Sansano, Bate and Narvaez be ordered to pay damages, attorney’s fees and expenses of litigation. Alciso claimed that the intention of the parties was to enter into a contract of real estate mortgage and not a contract of sale with right to repurchase.

The RTC held that the Deed of Sale with Right to Repurchase became functus officio when Alciso repurchased the property; the action to annul the Deed of Absolute Sale had prescribed; Alciso had no legal personality to annul the Deed of Sale of Realty; the Deed of Sale of Realty had a stipulation pour atrui in favor of Alciso thus Alciso can repurchase the property; Alciso communicated her acceptance to the pour atrui stipulation; the purchase price was 80,000; Alciso could either appropriate the commercial building or sell the land to Narvaez; and that Alciso is entitled to attorney’s fees and nominal damages.



The CA affirmed the RTC’s decision but modified the decision regarding the repurchase price. It added that the Deed of Sale of Realty involved a contract of sale with right of repurchase, not real estate mortgage. It ordered that the case be remanded to the RTC for determination of the property’s reasonable purchase price.

Issue: Whether Alciso can repurchase the property due to the stipulation pour atrui as held by the lower courts.

Ruling: Yes, but first and foremost, the stipulation in question was not a pour atrui as Alciso did not demand its fulfillment and never communicated her acceptance to the obligors. Assuming arguendo that the stipulation indeed is a pour atrui, in the three meetings Alciso never demanded the fulfillment of such and she never communicated her acceptance to the obligors.

It is a settled rule that only errors specifically assigned and properly argued in the appellant’s brief will be considered except jurisdictional and clerical errors. However, the Court is clothed with enough authority to review matters not assigned as errors if their consideration is necessary in arriving at a just decision.

The lower courts, in saying that Alciso could either appropriate the commercial building or sell the land to Narvaez relied on Article 448 of the New Civil Code and this is an erroneous application of the law. Article 448 is inapplicable in the present case because the Spouses Narvaez built the commercial building on the land that they own, and it would be absurd to compel them to buy their own land. Article 448 cannot be applied to resolve cases involving contracts of sale with the right to repurchase.

The terms of the Deed of Sale of Realty show that Bate and the Spouses Narvaez entered into a sale with right of repurchase, where Bate transferred his right to repurchase to Alciso. In the present case, the provisions of law that must apply are Articles 1601, 1606 and 1616. Hence, Alciso may exercise her right of redemption by paying Narvaez the price of the sale, expenses of the contract, legitimate payments made by reason of the sale and the necessary and useful expenses made on the subject property within 30 days from the determination of the RTC of the said expenses of the contract.

Heirs of PacificoPocdo v. Arsenia Avila and Emelinda ChuaGR No. 199146, March 19, 2014

Carpio, J.- Queiting of Title -

Facts: In June 2000, PacificoPocdo, who was later substituted by his heirs upon his death, filed a

complaint to quiet title over a 1,728 sq meter property (disputed property) in Camp 7, Baguio City and covered by a Tax Declaration. He claimed that the property originally belonged to his father, Pocdo Pool and that the same is different from the one-hectare portion allotted to PolonPocdo (brother of PacificoPocdo) who is the predecessor-in-interest of the defendants.

The facts show that Pocdo Pool claimed three lots which were later registered to his heirs upon his death. But since the decision was not implemented within 10 years or the prescribed period, the heirs then filed their ancestral land claims with the DENR. In 1991, Certificates of Ancestral Land Claims



were issued by the DENR for two of the three lots. In the meantime, PolonPocdo, heir of Pocdo Pool, ceded his rights over the three lots to Pacifico in exchange for one hectare lot to be taken from Lot 43 (the lot that was yet to be approved by DENR). However, Pacifico entered into an agreement with third persons revoking his agreement with Polon. Polon filed a complaint with the Barangay Captain and the same was amicably settled wherein they agreed that Pacifico would give 5,125 square meters and the remaining portion of the 1-hectare share of Polon to be taken from Lot 43 after segregation.

Polon later entered into an agreement with defendant Arsenia Avila authorizing the latter to undertake the segregation of his one-hectare land in Lot 43 and in exchange, he would award her with 2,000 square meters from the 1-hectare lot. After spending time, money and effort in the execution of the survey, Avila gave the survey results to Polom who then executed a Waiver of Rights. Subsquently, the 1,993 square meters given to Avila was declared for tax purposes under her name.

In 2000, finding the amicable settlement and Waiver of Rights in order, the CENRO issued in favor of Avila a Certificate of Exclusion of the 1,993 square meters from the ancestral land claim of the heirs of Pocdo Pool over Lot 43. This was questioned later on by the heirs of PolonPocdo but the same was dismissed and DENR then ordered that the TSAs (Townsite Sales Application) of defendant Avila be given due course, meaning that the same could now be the basis of disposition through public bidding and the appellant may participate in the bidding if qualified. It was then that Pacifico appealed but the same was denied. With no other remedy left, Pacifico filed this action with the RTC.

The RTC dismissed the case for lack of jurisdiction holding that the DENR has already declared the disputed property as public land, which the State through the DENR, has the sole power to dispose. Thus, the claim of petitioners to quiet title is not proper since they do not have title over the disputed property.

Raised on CA, the same ruled that petitioners, in raising the issue of quieting of title failed to allege any legal or equitable title to quiet. Under Art. 447, in an action to quiet title, the plaintiff must have legal or equitable title to or interest in the real property.

Issue:(1) Whether the RTC correctly ruled that it had nor jurisdiction over the action

(2) Whether the petitioners had title to the property that would support an action for quieting of title.

Ruling:

(1) Lot 43 is a public land and thus no longer registrable under the Land Registration Act. It is now governed with the applicable rules and procedure for the disposition of alienable public lands within the Baguio Townsite Reservation. Having established that the disputed property is public land, the trial court was therefore correct in dismissing the complaint to quiet the title for lack of jurisdiction. The trial court had no jurisdiction to determine who among the parties have better right over the disputed property which is still admittedly part of the public domain.

(2) No, petitioners had no title.

In an action for quieting of title, the complainant is seeking for “an adjudication that a claim of title or interest in property adverse to the claimant is invalid, to free him fro the danger of hostile claim,



and to remove a cloud upon or quiet the title to land where stale or unenforceable claims or demands exist. Under Art. 476 and 477, the two indispensable requisities in an action to quiet title are: (1) plaintiff has legal or equitable title to or interest in the real property subject of the action; and (2) there is a cloud on his title by reason of any instrument, record, deed, claim, encumbrance or proceeding which must be shown to be in fact invalid or inoperative despite its prima facie appearance of validity.

In this case, the heirs of Pocdo claim that the respondents Avila are unlawfully claiming the disputed property by using the Deed of Waiver of Rights.

However, records reveal that petitioners do not have legal or equitable title over the disputed property which forms part of Lot 43 for it is a public land within the Baguio Townsite Reservation and even their predecessor in interest, the heirs of Pocdo Pool, were not granted a Certificate of Ancestral Land Claim over Lot 43.

The Heirs of VictorinoSarili v. Pedro LagrosaGR No. 193517, January 15, 2014

Perlas-Bernabe, J.

- Builder in good faith

Facts: On February 17, 2000, respondent, represented by his attorney-in-fact Lourdes LabiosMojica via

a SPA, filed a complaint against Sps. Sarili and the Register of Deeds of Caloocan City before the RTC, alleging that he is the owner of a certain parcel of land situated in Caloocan City and has been religiously paying the real estate taxes therefor since its acquisition on November 29, 1974. Respondent claimed that he is a resident of California, USA, and that during his vacation in the Philippines, he discovered that a new certificate of title to the subject property was issued by the RD in the name of Victorino by virtue of a falsified Deed of Absolute Sale dated Feb 16, 1978 purportedly executed by him and his wife.

In their answer, Sps.Sarili maintained that they are innocent purchasers for value, having purchased the subject property from Ramon B. Rodriguez, who possessed and presented a Special Power of Attorney to sell/dispose of the same, and, in such capacity, executed a Deed of Absolute Sale dated November 20, 1992. In this relation, they denied any participation in the preparation of the February 16, 1978 deed of sale, which may have been merely devised by the "fixer" they hired to facilitate the issuance of the title in their names.

The RTC ruled in favor of the Sps. Sarili as the respondent’s signature on the subject SPA as "the same and exact replica" of his signature in the November 25, 1999 SPA in favor of Lourdes. Thus, with Ramon’s authority having been established, it declared the November 20, 1992 deed of sale executed by the latter as "valid, genuine, lawful and binding" and, as such, had validly conveyed the subject property in favor of Sps. Sarili.

The CA reversed the decision of RTC on the grounds that the November 20, 1992 deed of sale, which the RTC found "as valid and genuine," was not the source document for the transfer of the subject property and the issuance of TCT No. 262218 in the name of Sps.Sarili but rather the February 16, 1978 deed of sale, which was forged.

Issue:



Whether there is a valid conveyance of subject property to the spouses.

Ruling:No, there was no valid conveyance of ownership. It is well-settled that even if the procurement

of a certificate of title was tainted with fraud and misrepresentation, such defective title may be the source of a completely legal and valid title in the hands of an innocent purchaser for value. The general rule is that every person dealing with registered land may safely rely on the correctness of the certificate of title issued therefor and the law will in no way oblige him to go beyond the certificate to determine the condition of the property.

However, a higher degree of prudence is required from one who buys from a person who is not the registered owner, although the land object of the transaction is registered. In such a case, the buyer is expected to examine not only the certificate of title but all factual circumstances necessary for him to determine if there are any flaws in the title of the transferor.

In the present case, it is undisputed that Sps. Sarili purchased the subject property from Ramos on the strength of the latter’s ostensible authority to sell under the subject SPA. The said document, however, readily indicates flaws in its notarial acknowledgment since the respondent’s community tax certificate (CTC) number was not indicated thereon. Despite this irregularity, however, Sps.Sarili failed to show that they conducted an investigation beyond the subject SPA and into the circumstances of its execution as required by prevailing jurisprudence. Hence, Sps.Sarili cannot be considered as innocent purchasers for value.

At this juncture, it is well to note that it was, in fact, the February 16, 1978 deed of sale which – as the CA found – was actually the source of the issuance of TCT No. 262218. Nonetheless, this document was admitted to be also a forgery. Since Sps.Sarili’s claim over the subject property is based on forged documents, no valid title had been transferred to petitioners. Verily, when the instrument presented is forged, even if accompanied by the owner’s duplicate certificate of title, the registered owner does not thereby lose his title, and neither does the assignee in the forged deed acquire any right or title to the property.

The Court, however, finds a need to remand the case to the court a quo in order to determine the rights and obligations of the parties with respect to the house Sps. Sarili had built on the subject property in bad faith in accordance with Article 449 in relation to Articles 450, 451, 452, and the first paragraph of Article 546 of the Civil Code.

Builder in good faithTo be deemed a builder in good faith, it is essential that a person asserts title to the land on

which he builds, i.e. that he be a possessor in the concept of owner, and that he be unaware that there exists in his title or mode of acquisition any flaw which invalidates it. Good faith is an intangible and abstract quality with no technical meaning or statorydefintion, and it encompasses, among other things, an honest belief, the absence of malice and the absence of design to defraud or to seek an unconscionable advantage. It implies honesty of intention and freedom from knowledge of circumstances which out to put the holder upon inquiry.

As for the Spouses, they knew – or at least should have known, from the very beginning that they were dealing with a person who possibly had no authority to sell the subject property considering



the palpable irregularity in the subject’s SPA acknowledgement. Yet, relying solely on the said document and without further investigation on Ramos’ capacity to sell, the spouses still chose to proceed with its purchase and even built a house thereon. Based on the foregoing, it cannot be seriously doubted that the spouses were actually aware of a flaw or defect in their title or mode of acquisition and have consequently built the house in bad faith.

Magdalena T. Villa v.Filimeno Garcia, substituted by heirsGR No. 190106, January 15, 2014

Perez, J.Facts:

Petitioner Magdalena T. Villasi engaged the services of respondent Fil-Garcia Construction, Inc. (FGCI) to construct a seven-storey condominium located along Aurora Boulevard, Cubao, Quezon City. For failure of Villasi to fully pay the contract price, FGCI filed a suit for collection of sum of money before the RTC praying for the payment 2.8M. On the other hand, Villasi averred that she delivered the total amount of 7.4M to FGCI but the latter only accomplished 28% of the project.

The RTC ruled in favor of FGCI which was revered later on appeal by the CA. The CA ordered FGCI to return the excess amount of 1.2M. After the resolution became final and executory, Villasi then moved for execution of the judgment award.

To satisfy the judgment, the sheriff levied on a building found along Kalayaan Avenue, Quezon City. The building was declared for tax purposes in the name of FGCI but the land on which it was erected was in the names of the spouses Filimeno Garcia and ErmelindaHalili-Garcia (Spouses Garcia).

To forestall execution, the spouses filed a third party claim and alleged that the building covered by the levy was mistakenly assessed by the City Assessor in the name of FGCI. They argue that since they are the owners of the land, they would also be deemed under the law as the owners of the building standing thereon.The RTC then held the execution in abeyance until further orders.

Villasi went on appeal but the same was dismissed by the CA.

Issues:(1) Is the judgment enforceable against the spouses?

(2) Were the spouses able to prove ownership of the building?

Ruling:

(1) No, money judgments are enforceable only against the property incontrovertibly belonging to the judgment debtor, and if the property belonging to any third person is mistakenly levied upon to answer for another man’s indebtedness, such person has all the right to challenge the levy through any of the remedies provided under the RoC.

Indeed, an execution can only be issued against a party and not against one who did not have his day in court. For as the saying goes, one man’s goods shall not be sold for another man’s debts. In



order for a third party claim or terceria to prosper, the claimant must first establish his right on the property.

(2) The Spouses Garcia however were not able to convincingly prove that they owned the building.

The right of a third party claimant to file a terceria is founded on his title or right of possession. Before the court can exercise its supervisory power to direct the release of the property mistakenly levied and the restoration thereof to its rightful owner, the claimant must first unmistakably establish his ownership or right of possession thereon.

Aside from their postulation that as title holders of the land, the law presumes them to be the owners of the improvements built thereon, the spouses were unable to adduce evidence to prove their ownership of the property. In contrast, Villasi was able to satisfactorily establish the ownership of FGCI thru the pieces of evidence she appended, particularly that the building was declared for tax purposes to FGCI and not to the Spouses. While tax receipts and tax declarations are not incontrovertible evidence of ownership, they constitute credible proof of claim of title over the property.

Although tax declarations or realty tax payment of property are not conclusive evidence of ownership, nevertheless, they are good indicia of possession in the concept of an owner for no one in his right mind would be paying taxes for a property that is not in his actual or at least constructive possession. Furthermore, FGCI is in actual possession of the building, which coupled with the tax declaration, strongly supports ownership.

Accessory follows the principal, exceptionWhile it is a hornbook doctrine that the accessory follows the principal, that is, the ownership of

the property gives the right by accession to everything which is produced thereby, or which is incorporated or attached thereto, either naturally or artificially, such rule is not without exception. In cases where there is a clear and convincing evidence to prove that the principal and the accessory are not owned by one and the same person or entity, the presumption shall not be applied and the actual ownership shall be upheld.

To set the record straight, while petitioner may have proven his ownership of the land, as there can be no other piece of evidence more worthy of credence than a Torrens title, he failed to present any evidence to substantiate his claim of ownership or right to the possession of the building.

The rule on accession is not an iron-clad dictum. When there are factual and evidentiary evidence to prove that the building and the lot on which it stands are owned by different persons, they shall be treated separately. As such, the building or the lot can be made liable to answer for the obligation of its respective owner.


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