LTD final cases.docx

8/14/2019 LTD final cases.docx

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FIRST DIVISION

G.R. No. L-42805 August 31, 1987

THE TREASURER OF THE PHILIPPINES, petitioner,

vs.

THE COURT OF APPEALS and SPOUSES EDUARDO OCSON and NORA E. OCSON respondents.

CRUZ, J.:

The petitioner asks us to reverse a decision of the respondent court affirming that of the trial court holding

the Assurance Fund subsidiarily liable for damages sustained by the private respondents under the

following established facts.

Sometime in 1965, a person Identifying himself as Lawaan Lopez offered to sell to the private

respondents a parcel of land located in Quezon City and consisting of 1,316.8 square meters, which he

claimed as his property. His asking price was P85.00 per square meter but after a month's haggling the

parties agreed on the reduced price of P76.00 per square meter. The sale was deferred, however,

because the prospective vendor said his certificate of title had been burned in his house in Divisoria, and

he would have to file a petition with the court of first instance of Quezon City for a duplicate certificate of

title. He did so and the petition was granted after hearing without any opposition. Following the issuance

of the new duplicate certificate of title, the said person executed a deed of sale in favor of the private

respondents, who paid him the stipulated purchase price of P98,700.00 in full. The corresponding transfer

certificate of title was subsequently issued to them after cancellation of the duplicate certificate in the

name of Lawaan Lopez. 1

Trouble began two years later when another person, this time a woman, appeared and, claiming to be the

real Lawaan Lopez, filed a petition in the court of first instance of Quezon City to declare as null and void

the transfer of her land in favor of the private respondents, on the ground that it had been made by an

impostor. 2 After trial, the questioned deed of sale was annulled, (together with the duplicate certificate of

title issued to the impostor and the transfer certificate of title in the name of the private respondents) and

the real owner's duplicate certificate of title was revalidated. 3 Neither the Solicitor General nor the private

respondents appealed the decision, but Lawaan Lopez did so, claiming that the defendants should have

been required to pay damages to her and the costs. The appeal was dismissed, with the finding by

Justices Jose Leuterio, Magno Gatmaitan and Luis B. Reyes of the Court of Appeals that there was no

collusion between the private respondents and the impostor. 4

Subsequently the private respondents filed a complaint against the impostor Lawaan Lopez and the

Treasurer of the Philippines as custodian of the Assurance Fund for damages sustained by the plaintiffs

as above narrated. Both the trial court * ruled the respondent court ** ruled in their favor, holding the

Assurance Fund subsidiarily liable for the sum of P138,264.00 with legal interest from the date of filing ofthe complaint, in case the judgment could not be enforced against the other defendant who had been

defaulted and could not be located. 5 The petitioner, disclaiming liability, is now before us and prays for

relief against the decision of the respondent court which he says is not in accord with law and

jurisprudence.

The applicable law is Section 101 of Act No. 496 (before its revision by P.D. No. 1529) providing as

follows:


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Sec. 101. Any person who without negligence on his part sustains loss or damage through any omission,

mistake or misfeasance of the clerk, or register of deeds, or of any examiner of titles, or of any deputy or

clerk or of the register of deeds in the performance of their respective duties under the provisions of this

Act, and any person who is wrongfully deprived of any land or any interest therein, without negligence on

his part, through the bringing of the same under the provisions of this Act or by the registration of any

other person as owner of such land, or by any mistake, omission, or misdescription in any certificate or

owner's duplicate, or in any entry or memorandum in the register or other official book, or by any

cancellation and who by the provisions of this Act is barred or in any way precluded from bringing an

action for the recovery of such land or interest therein, or claim upon the same, may bring in any court or

competent jurisdiction an action against the Treasurer of the Philippine Archipelago for the recovery of

damages to be paid out of the Assurance Fund.

Commenting on this provision, Commissioner Antonio H. Noblejas, in his book on Land Titles and

Deed 6 notes that recovery from the Assurance Fund could be demanded by:

1) Any person who sustains loss or damage under the following conditions:

a) that there was no negligence on his part; and

b) that the loss or damage was sustained through any omission, mistake, or misfeasance of the clerk of

court, or the register of deeds, his deputy or clerk, in the performance of their respective duties under the

provisions of the land Registration Act,' or

2) Any person who has been deprived of any land or any interest therein under the following conditions:

a) that there was no negligence on his part;

b) that he was deprived as a consequence of the bringing of his land or interest therein under the

provisions of the Property Registration Decree; or by the registration by any other persons as owner of

such land; or by mistake, omission or misdescription in any certificate or owner's duplicate, or in any entry

or memorandum in the register or other official book, or by any cancellation; and

c) that he is barred or in any way precluded from bringing an action for the recovery of such land or

interest therein, or claim upon the same.

A careful reading of the above provision will readily show that the private respondents do not come under

either of the two situations above mentioned.

The first situation is clearly inapplicable as we are not dealing here with any omission, mistake or

malfeasance of the clerk of court or of the register of deeds or his personnel in the performance of their

duties.

The second situation is also inapplicable. The strongest obstacle to recovery thereunder is that the

private respondents acquired no land or any interest therein as a result of the invalid sale made to themby the spurious Lawaan Lopez.

The petition correctly points out that such sale conveyed no title or any interest at all to them for the

simple reason that the supposed vendor had no title or interest to transfer. He was not the owner of the

land. He had no right thereto he could convey. Manifestly, the deception imposed upon them by the

impostor deprived the private respondents of the money they delivered to him as consideration for the

sale. But there is no question that the subsequent cancellation of the sale did not deprive them of


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should not make the Assurance Fund liable to the private respondents for the serious wrong they have

sustained from the false Lawaan Lopez. The Government like all governments, and for obvious

reasons is not an insurer of the unwary citizen's property against the chicanery of scoundrels.

WHEREFORE, the petition is GRANTED. The decision of the respondent court dated January 26, 1976 is

set aside, and Civil Case No. 12426 of the then Court of First Instance of Rizal is dismissed. No costs.

SO ORDERED.

FIRST DIVISION

G.R. No. L-63046 June 21, 1990

MARIANO TORRES Y CHAVARRIA, petitioner,

vs.

THE HONORABLE COURT OF APPEALS, FRANCISCO E. FERNANDEZ and FE FERNANDEZ,

ROSARIO MOTA CUE, ERNESTO MEDINA CUE and the NATIONAL TREASURER, as Custodian of the

Assurance Fund,respondents.

Bengzon, Zarraga, Narciso, Cudala, Pecson, Azcuna & Bengzon for petitioner.

Albon, Serrano & Associates for private respondents.

T.J. Sumawang & Associates for respondent Fernandezes.

MEDIALDEA, J.:

This is a petition for review of the decision of the Court of Appeals in CA-G.R. No. 62248-R entitled

"Mariano Torres Y Chavarria v. Francisco E. Fernandez, et al., etc.," which reversed the decision of the

then Court of First Instance of Manila, Branch 7, by holding that it is the respondent Rosario Mota who is

legally entitled to the disputed realties, being an innocent mortgagee and later the highest bidder when

the properties were supposedly foreclosed, and not the petitioner Mariano Torres, the defrauded owner

thereof; and of the resolution of that Court denying Torres' motion for reconsideration.

The parcel of land located at the comer of Quezon Boulevard and Raon Street (now Gonzalo Street), and

the building erected thereon known as "M. Torres Building" is owned by Mariano Torres, the herein

petitioner, as evidenced by Transfer Certificate of Title No. 53628-Manila issued in his name. As far as

the records show, Torres was and still is in possession of the realties, holding safely to his owner's

duplicate certificate of title, and, at least until 1971, paying the real estate taxes due thereon, and

collecting rentals from his tenants occupying the building.

Sometime in 1966, Francisco Fernandez, Torres' brother-in-law, filed a petition with the Court of First

Instance of Manila, docketed as LRC GLRO Cad. Rec. No. 133, where he, misrepresenting to be the

attorney-in-fact of Torres and falsely alleging that the a duplicate copy of TCT No. 53628 was lost,

succeeded in obtaining a court order for the issuance of another copy of the certificate.

Once in possession thereof, Fernandez forged a simulated deed of sale of the realties in his favor.

Whereupon TCT No. 53628 in the name of Torres was canceled and TCT No. 86018 was issued in

Fernandez' name.


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On various dates from December, 1966 to November, 1967 Fernandez mortgaged the realties to Rosario

Mota, wife of Ernesto Cue, and also to Angela Fermin, who later assigned her credit to the spouses Cue.

The mortgages were annotated at the back of TCT No. 86018 and so was the deed of assignment.

Torres, who up to this time still had possession of his owner's duplicate certificate of title and who was still

collecting rentals from the occupants of the subject building, upon Teaming of the fraud committed by

Fernandez, caused, on March 18, 1968, the annotation on the latter's TCT a notice of adverse claim.

On March 30, 1968, Torres filed Civil Case No. 72494 against Fernandez to annul TCT No. 86018 as well

as the proceedings in LRC GLRO Cad. Rec. No. 133. On April 2, 1968, a notice of lis pendens was

annotated at the back of Fernandez' TCT.

In the meantime, Fernandez failed to pay his various loans which prompted the Cues to institute an

extrajudicial foreclosure of the mortgage.

On February 11, 1969, Fernandez filed Civil Case No. 75643 against the spouses Cue for the annulment

of the mortgage with preliminary injunction.

After the foreclosure was enjoined, the parties entered into an amicable settlement, approved by the court

whereby it was stipulated that Fernandez acknowledged and promised to pay his debt to the Cues for

Five Hundred Sixty-Two Thousand Nine Hundred Fifty-Five and 28/100 (P562,955.28) Pesos on or

before, March 30, 1970, while the spouses bound themselves to execute and deliver, within ten (10) days

from receipt of the sum mentioned such documents as are necessary to release the mortgages in favor of

defendants on plaintiffs' property.

Before Fernandez could pay his obligation under the settlement agreement, a decision was rendered in

Civil Case No. 72494 where it was declared that the proceedings held in LRC GLRO Cad. Rec, No. 133

was void and that TCT No. 86018, issued in the name of Fernandez, is without force and effect as TCT

No. 53628 in the name of Torres is the true and legal evidence of ownership of the subject immovables.

Fernandez appealed from this decision to the Court of Appeals where it was docketed as CA-G.R. No.

46386-R. The Court of Appeals, on April 20, 1979, affirmed the decision of the trial court. There beingnothing on the records that would indicate that the judgment of the appellate court was elevated here, it

would appear that it had become final and executory.

But meanwhile, prior to the Court of Appeals' decision mentioned above, Fernandez failed to comply with

his obligation under the amicable settlement and whereupon the Cues applied for and were granted a writ

of execution. The subject realties were then levied upon and sold at public auction where Rosario Mota

was the highest bidder.

On August 31, 1971, the redemption period for the subject immovables having lapsed without Fernandez

nor Torres redeeming the properties, Rosario Mota was issued the Sheriffs Deed of Sale. Thereafter, TCT

No. 86018 was canceled and TCT No. 105953 was issued in her name.

On December 7, 1971 Mota, through her lawyer, notified the tenants occupying "M. Torres Building" that

she is the new owner thereof and henceforth, payment of their rentals should be made to her.

On December 17, 1971 Torres filed a complaint, which later gave rise to this petition, with the Court of

First Instance of Manila, docketed as Civil Case No. 85753, against Fernandez and his spouse and the

Cues to restrain the latter from collecting rentals and for the declaration as void TCT No. 105953. The

Cues in turn filed a cross-claim against Fernandez spouses and a third party complaint against the

National Treasurer as the custodian of the Assurance Fund.


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During the proceeding, Mariano Torres, having died sometime in 1974, was substituted by his widow. On

June 3, 1977, the trial court rendered its decision declaring TCT No. 105953 in the name of Rosario Mota

nun and void as it upheld the validity of TCT No. 53628 in the name of Torres as the true evidence of title

to the disputed realties, and at the same time dismissing the Cue's third party complaint and cross claim.

The decision was reviewed by the respondent court at the instance of the Cues which, as

aforementioned, reversed the trial court in its decision dated July 30, 1982 and the Resolution of January14, 1983. Hence, this petition.

There is nothing on the records which shows that Torres performed any act or omission which could have

jeopardized his peaceful dominion over his realties. The decision under review, however, in considering

Mota an innocent mortgagee protected under Section 55 of the Land Registration Law, held that Torres

was bound by the mortgage. Inevitably, it pronounced that the foreclosure sale, where Mota was the

highest bidder, also bound Torres and concluded that the certificate of title issued in the name of Mota

prevails over that of Torres'. As correctly pointed out by Torres, however, his properties were sold on

execution, and not on foreclosure sale, and hence, the purchaser thereof was bound by his notice of

adverse claim and lis pendens annotated at the back of Fernandez' TCT. Moreover, even if We grant

Mota the status of an innocent mortgagee, the doctrine relied upon by the appellate court that a forged

instrument may become the root of a valid title, cannot be applied where the owner still holds a valid and

existing certificate of title covering the same interest in a realty. The doctrine would apply rather when, as

in the cases for example of De la Cruz v. Fable, 35 Phil. 144 [1916], Fule v. De Legare, No. L-17951,

February 28, 1963, 7 SCRA 351, and Republic v. Umali, G.R. No. 80687, April 10, 1989, the forger thru

insidious means obtains the owner's duplicate certificate of title, converts it in his name, and subsequently

sells or otherwise encumbers it to an innocent holder for value, for in such a case the new certificate is

binding upon the owner (Sec. 55, Act 496; Sec. 53, P.D. No. 1529). But if the owner holds a valid and

existing certificate of title, his would be indefeasible as against the whole world, and not that of the

innocent holder's. "Prior tempore potior jure"as We have said in Register of Deeds v. Philippine National

Bank, No. L-17641, January 30, 1965, 13 SCRA 46 , citing Bank, No. L Legarda v. Saleeby, 31 Phil.

590, Roman Catholic Bishop v. Philippine Railway, 49 Phil. 546,Reyes v. Borbon, 50 Phil. 791. in C.N.

Hodges v. Dy Buncio & Co., Inc., No. L-16096, October 30, 1962, 6 SCRA 287, 292, We laid down thedoctrine that:

The claim of indefeasibility of the petitioner's title under the Torrens land title system would be correct if

previous valid title to the same parcel of land did not exist. The respondent had a valid title ... It never

parted with it; it never handed or delivered to anyone its owner's duplicate of the transfer certificate of title,

it could not be charged with negligence in the keeping of its duplicate certificate of title or with any act

which could have brought about the issuance of another certificate upon which a purchaser in good faith

and for value could rely. If the petitioner's contention as to indefeasibility of his title should be upheld, then

registered owners without the least fault on their part could be divested of their title and deprived of their

property. Such disastrous results which would shake and destroy the stability of land titles had not been

foreseen by those who had endowed with indefeasibility land titles issued under the Torrens system.

Veronica Bareza perpetrated the fraud by making false representations in her petition and the title issuedto her being the product of fraud could not vest in her valid and legal title to the parcel of land in litigation.

As she had no title to the parcel of land, in the same way that a thief does not own or have title to the

stolen goods, she could not transmit title which she did not have nor possess.

We have applied this doctrine in the case of the Register of Deeds v. P.N.B., supra, where We noted that

said ruling is "a mere affirmation of the recognized principle that a certificate is not conclusive evidence of

title if it is shown that the same land had already been registered and an earlier certificate for the same

land is in existence." Again in the case of Baltazar v. Court of Appeals, G.R. No. 78728, December 8,


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1988, 168 SCRA 354, We held that as between two persons both of whom are in good faith and both

innocent of any negligence, the law must protect and prefer the lawful holder of registered title over the

transfer of a vendor bereft of any transmissible rights.

In view of the foregoing, to hold, for the purpose of enforcing the mortgage, that Mota was an innocent

mortgagee would be futile because, as above shown, no certificate of title covering the subject realties in

derogation of Torres' certificate of title may validly be issued.

Then it becomes evident that the remaining possible remedies of the Cues are to go against Fernandez

or the Assurance Fund, as they in fact had done in the lower court by filing a cross claim and third party

complaint. The lower court dismissed the Cues' cross-claim against Fernandez reasoning out that their

remedy is to cause the final judgment (compromise agreement) in Civil Case No. 75643 executed. This,

of course, is correct since the rights and obligations of both parties had been determined in that case.

The trial court also dismissed the Cues' third party complaint against the Treasurer of the Philippines as

custodian of the Assurance Fund after finding them negligent in protecting their interest. The trial court

recognized the principle that a person dealing with registered lands need not go beyond the certificate of

title but nevertheless pointed out that there are circumstances in this case which should have put the

Cues on guard and prompted them to investigate the property being mortgaged to them, thus:

The property in question is a very valuable property, in fact accepted by defendants Mota and Medina

Cue as collateral for more than half a million pesos in loans granted by them to Fernandez. Its value lies

principally in its income potential, in the form of substantial monthly rentals. Certainly, the registered title

does not yield any information as to the amount of rentals due from the building, much less on who is

collecting them, or who is recognized by the tenants as their landlord. Any prospective buyer or

mortgagee of such a property, if prudent and in good faith, is normally expected to inquire into all these

and related facts and circumstances.

Besides, by the course of visible dimensions of the M. Torres Building, it should be readily obvious to any

one that the area of the two lots ... covered by TCT No. 86018 cannot accommodate the building, as in

fact it also rests upon a lot covered by TCT No. 56387, and partly upon a lot leased by (Torres) from theCity of Manila. Had (the Cues) known of this fact would they have accepted the mortgage alone over TCT

No. 86018? The answer is obvious. And yet, to all indications, they never bothered to look into this fact

about the M. Torres Building.

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Another thing that defendants Mota and Medina Cue must have investigated, as any prudent buyer or

mortgagee should before consummating any transaction on real property, in the matter of payment of

taxes on the property. After all, the big value of the property in question necessarily means that even real

estate taxes on it alone would involve big amounts of money, and if there are tax arrearages, any buyer

or subsequent owner of the property wig have to come face to face with the tax hen attaching to the

property wherever its owner may be. ... (P. 257, Record on Appeal)

We likewise take note of the manifestation of the Office of the Solicitor General that the Cues failed to

contest the ruling of the trial court negating the liability of the Assurance Fund. For these reasons, We

hold that the Cues' remedy merely is to go against Francisco Fernandez or rather his estate since record

shows that he died sometime in 1983.

ACCORDINGLY, the decision and resolution under review are REVERSED and the decision of the then

Court of First Instance, Branch 7, Manila in Civil Case No. 85753 is REINSTATED.


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SO ORDERED.

THIRD DIVISION

G.R. No. 81163 September 26, 1988

EDUARDO S. BARANDA and ALFONSO HITALIA, petitioners,vs.

HONORABLE JUDGE TITO GUSTILO, ACTING REGISTER OF DEEDS AVITO SACLAUSO,

HONORABLE COURT OF APPEALS, and ATTY. HECTOR P. TEODOSIO, respondents.

Eduardo S. Baranda for petitioners.

Rico & Associates for private respondents.

GUTIERREZ, JR., J.:

Eduardo S. Baranda and Alfonso Hitalia were the petitioners in G.R. No. 64432 and the privaterespondents in G.R. No. 62042. The subject matter of these two (2) cases and the instant case is the

same a parcel of land designated as Lot No. 4517 of the Cadastral Survey of Sta. Barbara, Iloilo

covered by Original Certificate of Title No. 6406.

The present petition arose from the same facts and events which triggered the filing of the earlier

petitions. These facts and events are cited in our resolution dated December 29, 1983 in G.R. No. 64432,

as follows:

. . . This case has its origins in a petition for reconstitution of title filed with the Court of First Instance of

Iloilo involving a parcel of land known as Lot No. 4517 of the Sta. Barbara Cadastre covered by Original

Certificate of Title No. 6406 in the name of Romana Hitalia. Eventually, Original Certificate of Title No.

6406 was cancelled and Transfer Certificate of Title No. 106098 was issued in the names of AlfonsoHitalia and Eduardo S. Baranda The Court issued a writ of possession which Gregorio Perez, Maria P.

Gotera and Susana Silao refused to honor on the ground that they also have TCT No. 25772 over the

same Lot No. 4517. The Court, after considering the private respondents' opposition and finding TCT No.

25772 fraudulently acquired, ordered that the writ of possession be carried out. A motion for

reconsideration having been denied, a writ of demolition was issued on March 29, 1982. Perez and

Gotera filed a petition for certiorari and prohibition with the Court of Appeals. On August 6, 1982, the

Court of Appeals denied the petition. Perez and Gotera filed the petition for review on certiorari

denominated as G.R. No. 62042 before the Supreme Court. As earlier stated the petition was denied in a

resolution dated January 7,1983. The motion for reconsideration was denied in another resolution dated

March 25, 1983, which also stated that the denial is final. This decision in G.R. No. 62042, in accordance

with the entry of judgment, became final on March 25, 1983. The petitioners in the instant case G.R. No.

64432--contend that the writs of possession and demolition issued in the respondent court should now be

implemented; that Civil Case No. 00827 before the Intermediate Appellate Court was filed only to delay

the implementation of the writ; that counsel for the respondent should be held in contempt of court for

engaging in a concerted but futile effort to delay the execution of the writs of possession and demolition

and that petitioners are entitled to damages because of prejudice caused by the filing of this petition

before the Intermediate Appellate Court. On September 26, 1983, this Court issued a Temporary

Restraining Order ' to maintain the status quo, both in the Intermediate Appellate Court and in the

Regional Trial Court of Iloilo. Considering that (l)there is merit in the instant petition for indeed the issues


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discussed in G.R. No. 64432 as raised in Civil Case No. 00827 before the respondent court have already

been passed upon in G.R. No. 62042; and (2) the Temporary Restraining Order issued by the

Intermediate Appellate Court was only intended not to render the petition moot and academic pending the

Court's consideration of the issues, the Court RESOLVED to DIRECT the respondent Intermediate

Appellate Court not to take cognizance of issues already resolved by this Court and accordingly DISMISS

the petition in Civil Case No. 00827. Immediate implementation of the writs of possession and demolition

is likewise ordered. (pp. 107-108, Rollo G.R. No. 64432)

On May 9, 1984, the Court issued a resolution denying with finality a motion for reconsideration of the

December 29, 1983 resolution in G.R. No. 64432. On this same date, another resolution was issued, this

time in G.R. No. 62042, referring to the Regional Trial Court of Iloilo the ex-parte motion of the private

respondents (Baranda and Hitalia) for execution of the judgment in the resolutions dated January 7, 1983

and March 9, 1983. In the meantime, the then Intermediate Appellate Court issued a resolution dated

February 10, 1984, dismissing Civil Case No. 00827 which covered the same subject matter as the

Resolutions above cited pursuant to our Resolution dated December 29, 1983. The resolution dated

December 29, 1983 in G.R. No. 64432 became final on May 20, 1984.

Upon motions of the petitioners, the Regional Trial Court of Iloilo, Branch 23 presided by Judge Tito G.

Gustilo issued the following order:

Submitted are the following motions filed by movants Eduardo S. Baranda and Alfonso Hitalia through

counsel dated August 28, 1984:

(a) Reiterating Motion for Execution of Judgment of Resolutions dated January 7, 1983 and March 9,

1983 Promulgated by Honorable Supreme Court (First Division) in G.R. No. 62042;

(b) Motion for Execution of Judgment of Resolution dated December 29, 1983 Promulgated by Honorable

Supreme Court (First Division) in G.R. No. 64432;

(c) The Duties of the Register of Deeds are purely ministerial under Act 496, therefore she must register

all orders, judgment, resolutions of this Court and that of Honorable Supreme Court.

Finding the said motions meritorious and there being no opposition thereto, the same is hereby

GRANTED.

WHEREFORE, Transfer Certificate of Title No. T-25772 is hereby declared null and void and Transfer

Certificate of Title No. T-106098 is hereby declared valid and subsisting title concerning the ownership of

Eduardo S. Baranda and Alfonso Hitalia, all of Sta. Barbara Cadastre.

The Acting Register of Deeds of Iloilo is further ordered to register the Subdivision Agreement of Eduardo

S. Baranda and Alfonso Hitalia as prayed for." (p. 466, Rollo--G.R. No. 64432)

The above order was set aside on October 8, 1984 upon a motion for reconsideration and manifestation

filed by the Acting Registrar of Deeds of Iloilo, Atty. Helen P. Sornito, on the ground that there was a

pending case before this Court, an Action for Mandamus, Prohibition, Injunction under G.R. No. 67661

filed by Atty. Eduardo Baranda, against the former which remained unresolved.

In view of this development, the petitioners filed in G.R. No. 62042 and G.R. No. 64432 ex-parte motions

for issuance of an order directing the Regional Trial Court and Acting Register of Deeds to execute and

implement the judgments of this Court. They prayed that an order be issued:


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1. Ordering both the Regional Trial Court of Iloilo Branch XXIII, under Hon. Judge Tito G. Gustilo and the

acting Register of Deeds Helen P. Sornito to register the Order dated September 5, 1984 of the lower

court;

2. To cancel No.T-25772. Likewise to cancel No.T-106098 and once cancelled to issue new certificates of

title to each of Eduardo S. Baranda and Alfonso Hitalia;

Plus other relief and remedies equitable under the premises. (p. 473, 64432 Rollo)

Acting on these motions, we issued on September 17,1986 a Resolution in G.R. No. 62042 and G.R. No.

64432 granting the motions as prayed for. Acting on another motion of the same nature filed by the

petitioners, we issued another Resolution dated October 8, 1986 referring the same to the Court

Administrator for implementation by the judge below.

In compliance with our resolutions, the Regional Trial Court of Iloilo, Branch 23 presided by Judge Tito G.

Gustilo issued two (2) orders dated November 6,1986 and January 6,1987 respectively, to wit:

O R D E R

This is an Ex-parte Motion and Manifestation submitted by the movants through counsel on October 20,

1986; the Manifestation of Atty. Helen Sornito, Register of Deeds of the City of Iloilo, and formerly acting

register of deeds for the Province of Iloilo dated October 23, 1986 and the Manifestation of Atty. Avito S.

Saclauso, Acting Register of Deeds, Province of Iloilo dated November 5, 1986.

Considering that the motion of movants Atty. Eduardo S. Baranda and Alfonso Hitalia dated August 12,

1986 seeking the full implementation of the writ of possession was granted by the Honorable Supreme

Court, Second Division per its Resolution dated September 17,1986, the present motion is hereby

GRANTED.

WHEREFORE, the Acting Register of Deeds, Province of Iloilo, is hereby ordered to register the Order of

this Court dated September 5, 1984 as prayed for.

xxx xxx xxx

O R D E R

This is a Manifestation and Urgent Petition for the Surrender of Transfer Certificate of Title No. T-25772

submitted by the petitioners Atty. Eduardo S. Baranda and Alfonso Hitalia on December 2, 1986, in

compliance with the order of this Court dated November 25, 1 986, a Motion for Extension of Time to File

Opposition filed by Maria Provido Gotera through counsel on December 4, 1986 which was granted by

the Court pursuant to its order dated December 15, 1986. Considering that no Opposition was filed within

the thirty (30) days period granted by the Court finding the petition tenable, the same is hereby

GRANTED.

WHEREFORE, Maria Provido Gotera is hereby ordered to surrender Transfer Certificate of Title No. T-

25772 to this Court within ten (10) days from the date of this order, after which period, Transfer Certificate

of Title No. T-25772 is hereby declared annulled and the Register of Deeds of Iloilo is ordered to issue a

new Certificate of Title in lieu thereof in the name of petitioners Atty. Eduardo S. Baranda and Alfonso

Hitalia, which certificate shall contain a memorandum of the annulment of the outstanding duplicate. (pp.

286-287, Rollo 64432)


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On February 9, 1987, Atty. Hector Teodosio, the counsel of Gregorio Perez, private respondent in G.R.

No. 64432 and petitioner in G.R. No. 62042, filed a motion for explanation in relation to the resolution

dated September 17, 1986 and manifestation asking for clarification on the following points:

a. As to the prayer of Atty. Eduardo Baranda for the cancellation of TCT T-25772, should the same be

referred to the Court of Appeals (as mentioned in the Resolution of November 27, 1985) or is it already

deemed granted by implication (by virtue of the Resolution dated September 17, 1986)?

b. Does the Resolution dated September 17, 1986 include not only the implementation of the writ of

possession but also the cancellation of TCT T-25772 and the subdivision of Lot 4517? (p. 536, Rollo

4432)

Acting on this motion and the other motions filed by the parties, we issued a resolution dated May 25,

1987 noting all these motions and stating therein:

xxx xxx xxx

Since entry of judgment in G.R. No. 62042 was made on January 7, 1983 and in G.R. No. 64432 on May

30, 1984, and all that remains is the implementation of our resolutions, this COURT RESOLVED to refer

the matters concerning the execution of the decisions to the Regional Trial Court of Iloilo City for

appropriate action and to apply disciplinary sanctions upon whoever attempts to trifle with the

implementation of the resolutions of this Court. No further motions in these cases will be entertained by

this Court. (p. 615, Rollo-64432)

In the meantime, in compliance with the Regional Trial Court's orders dated November 6, 1986 and

January 6, 1987, Acting Register of Deeds AvitoSaclauso annotated the order declaring Transfer

Certificate of Title No. T-25772 as null and void, cancelled the same and issued new certificates of titles

numbers T-111560, T-111561 and T-111562 in the name of petitioners Eduardo S. Baranda and Alfonso

Hitalia in lieu of Transfer Certificate of TItle No. T-106098.

However, a notice of lis pendens "on account of or by reason of a separate case (Civil Case No. 15871)

still pending in the Court of Appeals" was carried out and annotated in the new certificates of titles issued

to the petitioners. This was upheld by the trial court after setting aside its earlier order dated February 12,

1987 ordering the cancellation of lis pendens.

This prompted the petitioners to file another motion in G.R, No. 62042 and G.R. No. 64432 to order the

trial court to reinstate its order dated February 12, 1987 directing the Acting Register of Deeds to cancel

the notice of lis pendens in the new certificates of titles.

In a resolution dated August 17, 1987, we resolved to refer the said motion to the Regional Trial Court of

Iloilo City, Branch 23 for appropriate action.

Since respondent Judge Tito Gustilo of the Regional Trial Court of Iloilo, Branch 23 denied the petitioners'

motion to reinstate the February 12, 1987 order in another order dated September 17, 1987, the

petitioners filed this petition for certiorari, prohibition and mandamus with preliminary injunction to compel

the respondent judge to reinstate his order dated February l2, 1987 directing the Acting Register of Deeds

to cancel the notice of lis pendens annotated in the new certificates of titles issued in the name of the

petitioners.


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Acting on a motion to dismiss filed by the petitioners, the court issued an order dated October 24, 1984

dismissing Civil Case No. 15871.

The order was then appealed to the Court of Appeals. This appeal is the reason why respondent Judge

Gustilo recalled the February 12, 1987 order directing the Acting Register of Deeds to cancel the notice of

lis pendens annotated on the certificates of titles of the petitioners.

This petition is impressed with merit.

Maria Provido Gotera was one of the petitioners in G.R. No. 62042. Although Calixta Provido, Ricardo

Provido, Maxima Provido and Perfecta Provido, the plaintiffs in Civil Case No. 15871 were not impleaded

as parties, it is very clear in the petition that Maria Provido was acting on behalf of the Providos who

allegedly are her co-owners in Lot No. 4517, Sta. Barbara Cadastre as shown by Transfer Certificate of

Title No. T-25772 issued in her name and the names of the plaintiffs in Civil Case No. 15871, among

others. (Annex "E" G.R. No. 62042, p. 51, Rollo) In fact, one of the issues raised by petitioners Maria

Provido Gotera and Gregoria Perez in G.R. No. 62042 was as follows:

xxx xxx xxx

2. Whether or not, in the same reconstitution proceedings, respondent Judge Midpantao L. Adil had the

authority to declare as null and void the transfer certificate of title in the name of petitioner Maria Provido

Gotera and her other co-owners. (p. 3, Rollo; Emphasis supplied)

It thus appears that the plaintiffs in Civil Case No. 15871 were privies to G.R. No. 62042 contrary to the

trial court's findings that they were not.

G.R. No. 62042 affirmed the order of the then Court of First Instance of Iloilo in the reconstitution

proceedings declaring TCT No. 25772 in the name of Providos over Lot No. 4517, Sta. Barbara Cadastre

null and void for being fraudulently obtained and declaring TCT No. 106098 over the same parcel Lot No.

4517, Sta. Barbara Cadastre in the name of petitioners Eduardo Baranda and Alfonso Hitalia valid and

subsisting.

The decision in G.R. No. 62042 became final and executory on March 25,1983 long before Civil Case No.

15871 was filed.

Under these circumstances, it is crystal clear that the Providos, private respondents herein, in filing Civil

Case No. 15871 were trying to delay the full implementation of the final decisions in G.R. No. 62042 as

well as G.R. No. 64432 wherein this Court ordered immediate implementation of the writs of possession

and demolition in the reconstitution proceedings involving Lot No. 4517, Sta. Barbara Cadastre.

The purpose of a notice of lis pendens is defined in the following manner:

Lis pendens has been conceived to protect the real rights of the party causing the registration thereof

With the lis pendens duly recorded, he could rest secure that he would not lose the property or any part ofit. For, notice of lis pendens serves as a warning to a prospective purchaser or incumbrancer that the

particular property is in litigation; and that he should keep his hands off the same, unless of course he

intends to gamble on the results of the litigation. (Section 24, Rule 14, RuIes of Court; Jamora v. Duran,

et al., 69 Phil. 3, 11; I Martin, Rules of Court, p. 415, footnote 3, citing cases.) (Natanov. Esteban, 18

SCRA 481, 485-486)

The private respondents are not entitled to this protection. The facts obtaining in this case necessitate the

application of the rule enunciated in the cases of Victoriano v. Rovila (55 Phil. 1000), Municipal Council of


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Paranaque v. Court of First Instance of Rizal (70 Phil., 363) and Sarmiento v. Ortiz (10 SCRA 158), to the

effect that:

We have once held that while ordinarily a notice of pendency which has been filed in a proper case,

cannot be cancelled while the action is pending and undetermined, the proper court has the discretionary

power to cancel it under peculiar circumstances, as for instance, where the evidence so far presented by

the plaintiff does not bear out the main allegations of his complaint, and where the continuances of thetrial, for which the plaintiff is responsible, are unnecessarily delaying the determination of the case to the

prejudice of the defendant. (Victoriano v. Rovira, supra; The Municipal Council of Paranaque v. Court of

First Instance of Rizal, supra)

The facts of this case in relation to the earlier cases brought all the way to the Supreme Court illustrate

how the private respondents tried to block but unsuccessfuly the already final decisions in G.R. No.

62042 and G.R. No. 64432.

Parenthetically, respondent Judge Tito Gustilo abused his discretion in sustaining the respondent Acting

Register of Deeds' stand that, the notice of lis pendens in the certificates of titles of the petitioners over

Lot No. 4571, Barbara Cadastre cannot be cancelled on the ground of pendency of Civil Case No. 15871

with the Court of Appeals. In upholding the position of the Acting Register of Deeds based on Section 77of Presidential Decree No. 1529, he conveniently forgot the first paragraph thereof which provides:

Cancellation of lis pendens. Before final judgment, a notice of lis pendens may be cancelled upon

Order of the Court after proper showing that the notice is for the purpose of molesting the adverse party,

or that it is not necessary to protect the rights of the party who caused it to be registered. It may also be

cancelled by the Register of Deeds upon verified petition of the party who caused the registration thereof.

This Court cannot understand how respondent Judge Gustilo could have been misled by the respondent

Acting Register of Deeds on this matter when in fact he was the same Judge who issued the order

dismissing Civil Case No. 15871 prompting the private respondents to appeal said order dated October

10, 1984 to the Court of Appeals. The records of the main case are still with the court below but based on

the order, it can be safely assumed that the various pleadings filed by the parties subsequent to themotion to dismiss filed by the petitioners (the defendants therein) touched on the issue of the validity of

TCT No. 25772 in the name of the Providos over Lot Number 4571, Sta. Barbara Cadastre in the light of

the final decisions in G.R. No. 62042 and G.R. No. 64432.

The next question to be determined is on the nature of the duty of the Register of Deeds to annotate

and/or cancel the notice of lis pendens in a torrens certificate of title.

Section 10, Presidential Decree No. 1529 states that "It shall be the duty of the Register of Deeds to

immediately register an instrument presented for registration dealing with real or personal property which

complies with all the requisites for registration. ... . If the instrument is not registrable, he shall forthwith

deny registration thereof and inform the presentor of such denial in writing, stating the ground or reasons

therefore, and advising him of his right to appeal by consulta in accordance with Section 117 of thisDecree."

Section 117 provides that "When the Register of Deeds is in doubt with regard to the proper step to be

taken or memoranda to be made in pursuance of any deed, mortgage or other instrument presented to

him for registration or where any party in interest does not agree with the action taken by the Register of

Deeds with reference to any such instrument, the question shall be submitted to the Commission of Land

Registration by the Register of Deeds, or by the party in interest thru the Register of Deeds. ... ."


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The elementary rule in statutory construction is that when the words and phrases of the statute are clear

and unequivocal, their meaning must be determined from the language employed and the statute must be

taken to mean exactly what it says. (Aparri v. Court of Appeals, 127 SCRA 231; Insular Bank of Asia and

America Employees' Union [IBAAEU] v. Inciong, 132 SCRA 663) The statute concerning the function of

the Register of Deeds to register instruments in a torrens certificate of title is clear and leaves no room for

construction. According to Webster's Third International Dictionary of the English Language the

word shall means "ought to, must, ...obligation used to express a command or exhortation, used in laws,

regulations or directives to express what is mandatory." Hence, the function of a Register of Deeds with

reference to the registration of deeds encumbrances, instruments and the like is ministerial in nature. The

respondent Acting Register of Deeds did not have any legal standing to file a motion for reconsideration

of the respondent Judge's Order directing him to cancel the notice oflis pendens annotated in the

certificates of titles of the petitioners over the subject parcel of land. In case of doubt as to the proper step

to be taken in pursuance of any deed ... or other instrument presented to him, he should have asked the

opinion of the Commissioner of Land Registration now, the Administrator of the National Land Title and

Deeds Registration Administration in accordance with Section 117 of Presidential Decree No. 1529.

In the ultimate analysis, however, the responsibility for the delays in the full implementation of this Court's

already final resolutions in G.R. No. 62042 and G.R. No. 64432 which includes the cancellation of the

notice of lis pendensannotated in the certificates of titles of the petitioners over Lot No. 4517 of the Sta.

Barbara Cadastre falls on the respondent Judge. He should never have allowed himself to become part of

dilatory tactics, giving as excuse the wrong impression that Civil Case No. 15871 filed by the private

respondents involves another set of parties claiming Lot No. 4517 under their own Torrens Certificate of

Title.

WHEREFORE, the instant petition is GRANTED. The February 12, 1987 order of the Regional Trial Court

of Iloilo, Branch 23 is REINSTATED. All subsequent orders issued by the trial court which annulled the

February 12, 1987 order are SET ASIDE. Costs against the private respondents.

SO ORDERED.

RICARDO

CHENG VS

RAMON

GENATO,

ERNESTO R. DA JOSE & SOCORRO B. DA JOSE,

G.R. No. 129760 29 December 1998Martinez,

J.:

FACTS

: Respondent Ramon B. Genato is the owner of two parcels of land located at Paradise Farms,San Jose

Del Monte, Bulacan who entered into a Contract to Sell with respondent-spouses Ernesto R. DaJose and

Socorro B. Da Jose for which the purchase price was P80.00 per square; P50,000.00 shall be paid as

partial down payment at the time of execution of this Contract to Sell; and that P950,000 as full payment

shall be paid 30 days after the execution of the contract to sell after the buyer has satisfactorilyverified the


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authenticity of the documents. The contract was in a public instrument and was dulyannotated at the back

of the two certificates of title. Sps Da Jose asked for and was granted by respondentGenato an extension

of another 30 days - until November 5, 1989. Without due notice to the Da Josespouses, Genato

executed an Affidavit to Annul the Contract to Sell. Ricardo Cheng expressed his desireto buy Genatos

property. Genato showed him the TCT with annotation of the contract with Sps Da

Joseand the affidavit of cancelling such contract. Cheng paid him P50,000 upon the assurance that the pr

evious contract will be annulled. When Genato was in Registry of Deeds in Meycauayan, Bulacan

toregister the annulment of the contract with the Sps Da Jose, by coincidence, the two parties met and

later on in the day, Genato decided to continue the Contract he had with them. Genato returned the

P50,000 toCheng. Da Jose spouses paid Genato the complete down payment of P950,000.00. Cheng

instituted acomplaint for specific performance to compel Genato to execute a deed of sale for check he

gave was a partial payment to the total agreed purchase price of the subject properties and considered as

an earnestmoney for which Genato acceded. RTC ruled in favor of Cheng which was reversed by the CA.

ISSUE

: 1. WON Article 1544 is applicable2. Who has a better right to the land, Cheng or Da Jose spouses?

HELD

:1. YESAlthough generally, rule on Double Sales does not apply in Contract to Sell, the

governingprinciple

of Article 1544:

PRIMUS TEMPORE, PORTIOR JURE

(first in time, stronger in right)should apply

. For not only was the contract between herein respondents first in time; it was alsoregistered long before

petitioners intrusion asa second buyer. This principle only applies when thespecial rules provided in theaforcited article of Civil Code do not apply or fit the specific circumstancesmandated under said law or

by jurisprudence interpreting the article.2. SPS DA JOSE -- The rule exacted by Article 1544 of the Civil

Code for the second buyer to be able todisplace the first buyer are:

(1)

that the

second buyer must show that he acted in good faith

(i.e. inignorance of the first sale and of the first buyer's rights) from the time of acquisition until title

istransferred to him by registration or failing registration, by delivery of possession;

(2)

the

second buyermust show continuing good faith and innocence or lack of knowledge of the first sale

until hiscontract ripens into full ownership through prior registration as provided by law.Although the Da

Jose spouses, as first buyers, knew of the second transaction it will not bar them fromavailing of their


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rights granted by law, among them, to register first their agreement as against the second buyer.In

contrast, knowledge gained by Cheng of the first transaction between the Da Jose spouses and

Genatodefeats his rights even if he is first to register the second transaction, since such knowledge taints

his prior registration with bad faith.

G.R. No. L-20075 November 27, 1968

DANAO COAL MINING SYNDICATE, LTD.,applicant, SOUTHWESTERN UNIVERSITY,petitioner-appellee,vs.CENON LAURENTE,oppositor-appellant.

Deen Law Offices for petitioner-appellee.Ramon Duterte for oppositor-appellant.

REYES, J.B.L., J.:

Forwarded to us for review by the Court of Appeals

1

is this appeal from two orders issued by theCourt of First Instance of Cebu in the latter's capacity as land registration court. 2The first was agrant to a buyer's ex partepetition praying, inter alia, for cancellation of annotation of incumbranceson the transfer certificate of title covering a parcel of land it purchased from the heirs of registeredowner. The second was a denial of a motion for reconsideration of the first order which was filed bya third person whose interest, purportedly, might have been prejudiced by the cancellation.

The transfer certificate of title (TCT No. 7567) in question covered a parcel of land situated inCamansi, Danao, Cebu. The same was issued in 1928 by the Register of Deeds of Cebu in favor ofH. M. H. Nemazee, the proprietor of the original applicant, Danao Coal Mining Syndicate, Ltd. On theface thereof were annotated the following incumbrances:

(a) the condition that the applicant shall be required to produce from the mining claims

referred to a minimum amount of coal equal to an average daily production of two hundredtons of twenty hundred and forty English pounds for every day exclusive of Sundays andholidays, and in the event of the failure of the said Coal Mining Syndicate to produce suchamount of coal, to pay to the Government of the Philippine Islands a royalty at the rate oftwenty centavos per ton upon each and every ton of the deficiency between the amountactually produced, and the minimum amount herein specified, (b) the use and occupancy ofthe surface of the said parcel of land in favor of Filomeno del Mar, as administrator of Roquedel Mar, deceased; Lazaro Osmea, as administrator of Tomas Osmea, deceased; H. B.Walker, as administrator of Candelario Cuizon, deceased; Juan Medio, Eleno Hungug,Bernardo Cal, Faustino Batucan, Perfecto Lavador, Agustin Tito and Salvador Gonzalez inaccordance with the agreement dated at Cebu, November 22, 1913.

In a quitclaim deed, dated 14 January 1960, the heirs of Nemazee transferred and quitclaimed infavor of Southwestern University their rights, title, interest and participation in, including their miningand leasehold rights over, said land.

Subsequently, Southwestern University petitioned the lower court to order (1) the cancellation of theaforequoted annotation of incumbrances on the ground that the condition and agreementconstituting the same were cancelled and rendered inoperative by the outbreak of World War II aswell as by the death of all the listed beneficiaries thereof; (2) the registration of the quitclaim deed;and (3) the cancellation of TCT No. 7567 itself, and issuance of a new certificate of title in its name.


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Appelant Laurente was not and can not now be considered a party in interest entitled to notice. Hewas, as he is now, a stranger representing no adverse claim as to render the petition for cancellationcontroversial and, thereby, divest the lower court of its jurisdiction. For Laurente's claim avers thatthe cancellation of the right of the persons recorded as entitled to use and occupancy of the surfaceof the land could affect him adversely because the interest acquired by him from Filomeno del Mar"might be included in that which is referred to in the aforementioned annotation." (Record on Appeal,

page 43) This is too vague and unsubstantial to give him standing to claim right to notice or tocontest the order of cancellation. Before a claimant can be considered as possessing a genuineadverse interest that would deprive the Registration Court of jurisdiction to proceed under section112 of Act 496 in the absence of notice to him, there must be a showing of the prima facie truth andvalidity of such adverse interest. Laurente has failed to make such a showing. His motion merelyspeaks of apossibility of being prejudiced. He has not produced and deed of conveyance fromFilomeno del Mar, or secondary evidence thereof. A mere verbal agreement will not do here; theremust be a public instrument in order to affect a stranger (such as the holder of the certificate of titleor his successors in interest). For Article 1280, No. 1, of the Civil Code of 1889 (in force in 1920when Laurente claims to have acquired title) prescribes:

The following must be reduced to writing in apublic instrument:

1. Acts or contracts whose object is the creation, transmission, modification or extinction ofrights which affect immovable property. (Emphasis supplied)

And to affect registered land, such as is covered by the Certificates of Title of appellee SouthwesternUniversity and its predecessor in interest (TCT No. 7567 and RT-2164), the public document abovereferred to must be recorded and annotated in the certificate, as pointed out in the appealed order;and admittedly, there is no record of any deed in favor of Laurente. It is elementary that, under theTorrens system, registration is the operative act that binds the parties thereto, without affecting therights of strangers to such contract (Act 496, section 51) unless they have actual knowledgethereof,6which is not alleged here.

What is worse is that Laurente allowed more than 20 years to elapse without asserting the alleged

conveyance in his favor, when a period of 10 years sufficed under Act 190 (then in force) to bar anyclaim to or over real property. Nor has Laurente adequately explained such laches on his part..

He avers that he could not cause the recording of the conveyance in his favor because theregistered owner resided in Hongkong. This is no excuse, for the claimant could have asked theproper court to have the owner summoned by publication. Laurente also pleads that the records ofthe Cebu Register of Deeds were destroyed in the last war. But the war only broke out in 1941, andthe enemy occupied Cebu in 1942, while Laurente's vendor, Filomeno delo Mar, ceased to beadministrator of the Estate of Roque del Mar as far back as 1920, when the proceedings wereclosed (Record on Appeal, page 61). Thus, Laurente unaccountably permitted 21 years to elapsewithout attempting to record or enforce the alleged conveyance in his favor.

All the foregoing circumstances cast a dense pall of doubt over the genuineness and validity ofLaurente's adverse claim, and fully justify its rejection by the lower court.

WHEREFORE, the orders appealed from are sustained and affirmed. Costs against appellant CenonLaurente in all instances.

Egao v CA, 174 SCRA 484 G.R. No. 79787, 29 June 1989Facts:
http://talkaboutphilippinelaw.blogspot.com/2011/12/egao-v-ca-174-scra-484-gr-no-79787-29.htmlhttp://talkaboutphilippinelaw.blogspot.com/2011/12/egao-v-ca-174-scra-484-gr-no-79787-29.html


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A deed of sale for lots E and G of Hacienda Maysilo and covered by OCT No. 983 was executed in

favor of Ismael Lapus, a bona fide occupant thereof. The deed of sale was presented for registration

and contained entries showing that it was annotated on the back of the OCT. Contrary to SOP

however, the deed of sale was not annotated on the OCT and that consequently, that title was

apparently not cancelled.

As a result of the registration of the deed of sale, TCT No. 4910 (Lapus Title) was issued to Lapus.

Upon his death, the two lots were inherited by his daughter Carolina Lapuz-Gozon, who had the land

subdivided into 55 lots and sold some to her now co-respondents. Lapus and successors-in-interest

have been in possession of the lands even before 1910 of more than 70 years.

In 1962, the Riveras, alleged heirs of the late Maria de la Concepcion Vidal filed a motion in land

registration cases, alleging that they were deprived of their participation in the Hacienda Maysilo.

Since per the OCT the land seemed unencumbered, the court adjudicated the land in their favor. The

OCT was then cancelled and TCT No. 112235 (Rivera Title) was issued to the Riveras. Lots 5 and 7

(E and G) were then assigned to Bartolome Rivera to Sergio Cruz and Pacifico Garcia, and

subsequent TCTs were issued in their behalf.

Garcia had Lot 7 (G) subdivided into lots A and B, retained lot A and assigned B to Antonio Munoz.

Munoz mortgaged lot B to Associated Banking Corp.

On the other hand, Cruz sold Lot 5 (E) to Santiago Go. Go mortgaged Lot 5 to Philippine National

Bank. Both Munoz and Go did not pay their mortgage debts, hence the two banks foreclosed the

properties. PNB bought the mortgaged Lot 5 at the auction, but notice of lis pendens was already

annotated on the title.

Riveras and their successors-in-interest have never set foot on the disputed lots.

Gozon finally learned about the Riveras and others acquiring the land, had her adverse claims

registered on the titles of lots 5 and 7 and filed an action to quiet title and damages.

The trial court ruled in favor of Gozon and co-plaintiffs and voided the TCTs issued to the Riveras,

others. CA affirmed the decision. Garcia and PNB appealed.

Issue:

W/N the 1920 Lapus title prevails over the 1963 Rivera title and subsequent titles derived from it?

Held:

Yes, Lapus title prevails. Lapus was an innocent purchaser for value who validly transmitted to

his successors-in-interest his indefeasible title or ownership over the disputed lots. That title could

not be nullified or defeated by the issuance 43 years later to other persons of another title over the


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same lots due to the failure of the register of deeds to cancel the title preceding the title issued to

Lapus. This must be so considering that Lapus and his successors-in-interest remained in possession

of the disputed lots and the rival claimants never possessed the same.

The general rule is that in the case of two certificates of title, purporting to include the

same land, the earlier in date prevails. It is settled that in this jurisdiction the

maximprior est in tempore, potior est in jure (he who is first in time is preferred in

right) is followed in land resgistration matters.

The contention of PNB that it was a buyer in good faith has no merit because the deed of sale in favor

of Lapus and the titles issued to him and his successors-in-interest are all a matter of public record in

the registry of deeds. When a conveyance has been properly recorded, such record is a constructive

notice of its contents and all interests, legal and equitable, included therein. Under the rule of notice,

it is presumed that the purchaser has examined every instrument of record affecting the title. This

presumption cannot be overcome by proof of innocence and good faith otherwise the very purpose of

the law requiring a record would be destroyed. The bank should have made an on-the-spot

investigation of the lot mortgaged.

Decision affirmed.

G.R. Nos. 74226-27 July 27, 1989

PEOPLE OF THE PHILIPPINES, petitioner,vs.MIZPAH R. REYES, respondent.

Pacianito B. Cabaron for respondent.

Celso C. Dimayuga co-counsel for respondent.

CORTES,J .:

The crime of falsification of a public document carries with it an imposable penalty of prisioncorreccionalin its medium and maximum periods and a fine of not more than P5,000.00 [Art. 172,Revised Penal Code (RPC)]. Being punishable by a correctional penalty, this crime prescribes in ten(10) years [Art. 90, par. 3 (RPC)]. The ten (10) year prescriptive period commences to run "from theday on which the crime is discovered by the offended party, the authorities, or their agents . . ." [Art.

91, (RCP)]. In the instant case, the public document allegedly falsified was a notarized deed of saleregistered on May 26, 1961 with the Register of Deeds in the name of the accused, privaterespondent herein, Mizpah R. Reyes. The two informations for falsification of a public documentsubject matter of the controversy were, however, filed only on October 18, 1984. The complainantsclaim that they discovered the falsified notarized deed of sale in June 1983. The Court is tasked withdetermining whether the crime has prescribed which hinges on whether or not its discovery may bedeemed to have taken place from the time the document was registered with the Register of Deeds,consistent with the rule on constructive notice.


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The antecedent facts are as follows:

The spouses Julio Rizare and Patricia Pampo owned a parcel of land located in Lipa City registeredin their names under TCT No. T-7471. Both are now deceased, the husband having died onSeptember 6, 1970 and his wife on August 7, 1977. They were survived by the following children:the accused Mizpah R. Reyes and the complainants Cristina R. Masikat, Julieta R. Vergara and

Aurora Rizare Vda. de Ebueza.

In June 1983, the complainants allegedly discovered from the records of the Register of Deeds ofLipa City that the abovementioned property had already been transferred in the name of MizpahReyes, single, of legal age, Filipino and resident of the City of Lipa, Philippines" under TCT No. T-9885. They further allegedly discovered that the conveyance was effected through a notarized deedof sale executed and signed on May 19, 1961 by their parents Julio Rizare and Patricia Pampo. Thedeed of sale was registered with the Register of Deeds of Lipa City on May 26, 1961. Uponexamination of the document, they found that the signature of their parents were allegedly falsifiedand that accused also made an untruthful statement that she was single although she was marriedto one Benjamin Reyes on May 2, 1950. The document was referred by the complainants to theNational Bureau of Investigation (N.B.I.) for examination of the signatures of their parents and areport was returned with the finding that the signature of Julio Rizare was genuine but that of PatriciaPampo was forged. Upon complaint by the sisters of the accused and after conducting aninvestigation, the fiscal filed with the Regional Trial Court of Batangas, Branch XIII, Lipa City onOctober 18, 1984 two (2) informations both for falsification of public document, the first in CriminalCase No. V-1163, for allegedly making it appear in the notarized deed of sale that Patricia Pampo,the mother of the accused, participated in the sale of a parcel of land by falsifying Pampo'ssignature, and the second in Criminal Case No. V-1164, for allegedly making an untruthful statementof fact in the deed of sale, more specifically, by stating that accused was single.

Before arraignment, accused filed a motion to quash both informations on grounds that: (1) "Thecriminal action or liability has been extinguished by prescription of the crime in the light of Cabral v.Puno, 70 SCRA 606;" and (2) "The trial court had no jurisdiction over the offense charged and theperson of accused because of non-compliance with the pre-conciliation requirement of P.D. No.

1508." [Rollo, p. 33].

The trial court granted the motion and quashed the informations in the two (2) cases stating that:

x x x

...The title, once registered, is a notice to the world. All Persons must take notice. Noone can plead ignorance of registration.

The essence, therefore, of registration is to serve notice to the whole world of thelegal status and the dealing therewith.

If registration is a notice to the whole world, then registration is in itself a notice andtherefore, the prescriptive period of registered document must start to run from thedate the same was annotated in the Register of Deeds.

In these two cases in question, prescriptive period of ten (10) years should havestarted from May 26, 1960 (sic).


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Considering the lapse of more than twenty (20) years before the two informationswere filed, the crimes for which the accused, Mizpah Reyes, are charged havealready prescribed.

WHEREFORE, and as prayed for, Criminal Cases Nos. V-1163 and V-1164 arequashed. [Rollo, pp. 33-34].

From the trial court's order quashing the two (2) informations, the People, petitioner herein, filed anappeal with the Court of Appeals (then designated as the Intermediate Appellate Court). In adecision **promulgated on April 3, 1986, the Court of Appeals affirmed the trial court's order. TheCourt of Appeals rejected the theory of petitioner that the prescriptive period should commence onJune 1983, when the complainants actually discovered the fraudulent deed of sale. The appellatecourt sustained the trial court's ruling that the prescriptive period started on May 26, 1961, when thedeed of sale was registered with the Register of Deeds of Lipa City. Hence, this petition for reviewon certiorariof the decision of the Court of Appeals, filed by the People, through the Solicitor-General.

Among the authorities relied upon by the Court of Appeals in dismissing petitioner's appeal is the

case of Cabral v. Puno,G.R. No. L-41692, April 30, 1976, 70 SCRA 606, where the Supreme Courtmade a statement to the effect that in the crime of falsification of a public document, the prescriptiveperiod commences from the time the offended party had constructive notice of the alleged forgeryafter the document was registered with the Register of Deeds. However, petitioner contends that thisparticular statement is not doctrine but merely anobiter dictum.

The Cabral case stemmed from the filing on September 24, 1974 of an information accusingEugenio Cabral of the crime of falsification of public document for allegedly falsifying on August 14,1948 the signature of the complainant Silvino San Andres in a deed of sale of a parcel of land.Before arraignment, petitioner moved to quash the information on the ground of prescription of thecrime, as the notarized deed of sale was registered with the Register of Deeds on August 26, 1948.

After hearing the motion, the judge issued a resolution granting the motion to quash and dismissingthe information on the ground of prescription. Private prosecutor filed a motion for the

reconsideration of the resolution. Acting on said motion, the trial court ordered the fiscal to makeknown his position. The fiscal filed a comment stating that the crime has not prescribed as thecomplainant San Diego claimed that he only discovered the crime in October 1970. Thereafter, thetrial court set aside its resolution granting the accused's motion to quash and reinstated theinformation. The accused brought the case to the Supreme Court questioning the trial court'sauthority to set aside its resolution granting his motion to quash. The Supreme Court ruled in favor ofthe accused by holding that the aforementioned resolution has already become final and executoryfor failure of the fiscal to file a motion for reconsideration within the reglementary period. The motionfor reconsideration filed by the private prosecutor was disregarded because of the latter's lack oflegal standing. Another reason given by the Court for its decision is the following:

. . .The Rules of Court is explicit that an order sustaining a motion to quash based on

prescription is a bar to another prosecution for the same offense [Secs. 2(f) and 8,Rule 117, Revised Rules of Court]. Article 89 of the Revised Penal Code alsoprovides that "prescription of the crime is one of the grounds for "total extinction ofcriminal liability." Petitioner was charged with the crime of falsification under Article172, sub-paragraphs (1) and (2) of the Revised Penal Code, which carries animposable penalty ofprision correccionalin its medium and maximum periods and afine of not more than P5,000.00. This crime prescribes in ten (10) years [Article 90,Revised Penal Code]. Here, San Diego had actual if not constructive notice of the


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alleged forgery after the document was registered in the Register of Deeds onAugust 26, 1948.

x x x

[Cabral v. Puno, supraat p. 609].

Although the prescription of the crime was not squarely in issue in Cabral, it is apparent that thestatement of the Court on prescription and constructive notice was not totally irrelevant to thedisposition of the case. Moreover, it is not without any legal basis.

The rule is well-established that registration in a public registry is a notice to the whole world. Therecord is constructive notice of its contents as well as all interests, legal and equitable, includedtherein. All persons are charged with knowledge of what it contains [Legarda and Prieto v. Saleeby,31 Phil. 590 (1915); Garcia v. Court of Appeals, G.R. Nos. L-48971 and 49011, January 22, 1980,95 SCRA 380; Hongkong and Shanghai Banking Corporation v. Pauli, et al., G.R. No. L-38303, May30, 1988,161 SCRA 634; See alsoSec. 52, Pres. Decree No. 1529 (1978)].

Pursuant to this rule, it has been held that a purchaser of registered land is presumed to be chargedwith notice of every fact shown by the record. The Court, in explaining the nature of the rule onconstructive notice and the presumption arising therefrom stated inGatioan v. Gaffud, G.R. No. L-21953, March 28 1969, 27 SCRA 706, 712-713, that:

x x x

When a conveyance has been properly recorded such record is constructive noticeof its contents and all interests, legal and equitable, included therein ...

Under the rule of notice, it is presumed that the purchaser has examined everyinstrument of record affecting the title. Such presumption is irrebutable. He is

charged with notice of every fact shown by the record and is presumed to knowevery fact which an examination of the record would have disclosed. Thispresumption cannot be overcome by proof of innocence or good faith. Otherwise thevery purpose and object of the law requiring a record would be destroyed. Suchpresumption cannot be defeated by proof of want of knowledge of what the recordcontains 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 thepublic record contains is a rule of law. The rule must be absolute. Any variationwould lead to endless confusion and useless litigation.

x x x

It has also been ruled that when an extrajudicial partition of the property of the deceased wasexecuted by some of his heirs, the registration of the instrument of partition with the Register ofDeeds is constructive notice that said heirs have repudiated the fiduciary relationship between themand the other heirs vis-a-vis the property in question. The heirs who were not included in the deed ofpartition are deemed to have notice of its existence from the time it was registered with the Registerof Deeds [De la Cerna v. De la Cerna, G.R. No. L-28838, August 31, 1976, 72 SCRA 514]. Likewise,the rule on constructive notice has been applied in the interpretation of a provision in the Civil Codeon the prescription of actions for annulment of contracts which is parallel to Art. 91 of the RevisedPenal Code. The Civil Code provision states:


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Art. 391. The action for annulment shall be brought within four years.

This period shall begin:

x x x

In case of mistake or fraud,from the time of the discovery of the same[Emphasissupplied].

InArmentia v. Patriarca, G.R. No. L-18210, December 29, 1966,18 SCRA 1253, where a notarialdocument recorded with the Registry of Deeds was sought to be annulled, the Court, interpreting thephrase "from the time of the discovery" found in the aforequoted provision of the Civil Code, ruledthat "in legal contemplation, discovery must be reckoned to have taken place from the time thedocument was registered in the Register of Deeds, for the familiar rule is that registration is a noticeto the whole world . . ." [See alsoAvecilla v. Yatco, 103 Phil. 666 (1958); Gerona v. De Guzman,G.R. No. L-19060, May 29, 1964, 11 SCRA 153; Carantes v. Court of Appeals, G.R. No. L-33360,

April 25, 1977, 76 SCRA 514; Cultura v. Tupacar, G.R. No. L-48430, December 3, 1985,140 SCRA311; Cimafranco v. IAC, G.R. No. L-68687, January 31, 1987, 147 SCRA 611; Hongkong and

Shanghai Banking Corporation v. Pauli, et al., supra.] However, petitioner contends that Art. 91 ofthe Revised Penal Code which states that "the period of prescription shall commence to run from theday the crime is discoveredby the offended party,the authorities, or their agents. . cannot beconstrued in the same manner because the rule on constructive notice is limited in application toland registration cases. It is argued that haste should be avoided in applying civil law presumptionsto criminal suits.

Although caution should be observed in applying the rules of construction in civil cases in theinterpretation of criminal statutes, the Court will not hesitate to do so if the factual and legalcircumstances so warrant. Hence, inMercado v. Santos, 66 Phil. 215 (1938), the Court applied thepresumption arising from the allowance of a will to bar a criminal action. In theft particular case, thepetitioner filed a petition for the probate of the will of his deceased wife. The will was duly probated.Sixteen (16) months thereafter, a criminal complaint was filed against petitioner for falsification or

forgery of the will. Petitioner filed a motion to dismiss the case claiming that the order probating thewill is conclusive as to its authenticity and due execution. The motion having been denied, thepetitioner filed a petition for certiorari with the Court of Appeals (CA) which ruled that "the judgmentadmitting the will to probate is binding upon the whole world as to the due execution andgenuineness of the will insofar as civil rights and liabilities are concerned, but not for the purpose ofpunishment of a crime." But the Supreme Court reversed the CA decision by ruling that, inaccordance with See. 625 of the then Code of Civil Procedure which provides that "the allowance bythe court of a will of real and personal estate shall be conclusive as to its due execution," *** acriminal action will not lie in this jurisdiction against the forger of a will which had been duly admittedto probate by a court of competent jurisdiction.

It is, however, insisted in this case that the rule on constructive notice applies only in civil cases. It is

argued that the law on prescription of crimes is founded on a principle different from that of the lawon prescription in civil actions. The difference, it is claimed, precludes the application of the rule onconstructive notice in criminal actions.

The statute of limitations of civil actions was explained in Penales v. Intermediate Appellate Court,G.R. No. 73611, October 27, 1986, 115 SCRA 223, 228 in the following manner:

Prescription is rightly regarded as a statute of repose whose object is to suppressfraudulent and stale claims from springing up at great distances of time and


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surprising the parties or their representatives when the facts have become obscurefrom the lapse of time or death or removal of witnesses . . .

On the other hand, the Court in People v. Moran, 44 Phil. 389, 405-406 (1923), discussed the natureof the statute of limitations in criminal cases as follows:

x x x

. . . The statute is not a statute of process, to be scantily and grudgingly applied, butan amnesty, declaring that after a certain time oblivion shall be cast over the offense;that the offender shall be at liberty to return to his country; and resume hisimmunities as a citizen; and that from henceforth he may cease to preserve theproofs of his innocence, for the proofs of his guilt are blotted out. Hence it is thatstatutes of limitation are to be liberally construed in favor of the defendant, not onlybecause such liberality of construction belongs to all acts of amnesty and grace, butbecause the very existence of the statute is a recognition and notification by thelegislature of the fact that time, while it gradually wears out proofs of innocence, hasassigned to it fixed and positive periods in which it destroys proofs of guilt.

Independently of these views, it must be remembered that delay in institutingprosecutions is not only productive of expense to the State, but of peril to publicjustice in the attenuation and distortion, even by mere natural lapse of memory, oftestimony. It is the policy of the law that prosecutions should be prompt, and thatstatutes enforcing such promptitude should be vigorously maintained. They are notmerely acts of grace, but checks imposed by the State upon itself, to exact vigilantactivity from its subalterns, and to secure for criminal trials the best evidence that canbe obtained.

x x x

It is evident that there is merit in petitioner's claim that the law on prescription of civil suits is foundedon different policy considerations from that of the law on prescription of criminal actions. However,

the Court does not subscribe to the conclusion that the presumptions and rules of interpretation usedin the law on prescription of civil suits, including the rule on constructive notice, can not be applied incriminal actions.

The considerations in providing for prescription of civil suits are based mainly on practical andequitable grounds. The lapse of a considerably long period of time obscures the surroundingcircumstances of a particular claim or right and erodes the integrity of whatever evidence may bepresented in support of an action to enforce or contest such claim or right. Moreover, where aparticular right has accrued in favor of a party, the enjoyment of such right cannot forever be left on aprecarious balance, always susceptible to possible challenge by an adverse party. After a certainperiod of time fixed by law, the right enjoyed by a party must be accorded respect by prohibitingadverse claims the factual basis of which can no longer be verified with certainty. Hence, the law on

prescription of civil suits is properly called a statute of repose.

The practical factor of securing for civil suits the best evidence that can be obtained is also a majorconsideration in criminal trials. However, the law on prescription of crimes rests on a morefundamental principle. Being more than a statute of repose, it is an act of grace whereby the state,after the lapse of a certain period of time, surrenders its sovereign power to prosecute the criminalact. While the law on prescription of civil suits is interposed by the legislature as an impartial arbiterbetween two contending parties, the law on prescription of crimes is an act of amnesty and liberalityon the part of the state in favor of the offender [People v. Moran, supra, at p. 405]. Hence, in the


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interpretation of the law on prescription of crimes, that which is most favorable to the accused is tobe adopted [People v. Moran, supra; People v. Parel, 44 Phil. 437 (1923); People v. Yu Hai, 99 Phil.725 (1956)]. The application of the rule on constructive notice in the construction of Art. 91 of theRevised Penal Code would most certainly be favorable to the accused since the prescriptive periodof the crime shall have to be reckoned with earlier, i.e., from the time the notarized deed of sale wasrecorded in the Registry of Deeds. In the instant case, the notarized deed of sale was registered on

May 26, 1961. The criminal informations for falsification of a public document having been filed onlyon October 18, 1984, or more than ten (10) years from May 26, 1961, the crime for which theaccused was charged has prescribed. The Court of Appeals, therefore, committed no reversibleerror in affirming the trial court's order quashing the two informations on the ground of prescription.

WHEREFORE, in view of the foregoing, the petition is hereby DENIED and the decision of the Courtof Appeals is AFFIRMED.

SO ORDERED.

G.R. No. L-42278 January 20, 1989

GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS), petitioner,vs.HON. COURT OF APPEALS and RENE KNECHT, respondents.

Cesar R. Vidal for peti t ion er.

Norberto J. Quisumbing fo r private respondent.

MEDIALDEA,J.:

This is a petition for review on certiorarifiled by the Government Service Insurance System(GSIS) seeking the reversal of the decision of the respondent Court of Appeals dated October13, 1975, in the special civil action for cert iorar idocketed as CA-G.R. No. SP-04300,entitled " Rene Knecht vs. Hon. Pedro J L. Bautista, etc., et. al.," and its resolution datedDecember 18, 1975, denying petitioner's motion for reconsideration. Per Resolution datedMay 4, 1976, however, We treated this case as a special civil action (p. 217, Rollo).

The assailed decision set aside, "as having been issued in grave abuse of discretion," theOrders of the Court of First Instance (now Regional Trial Court) of Rizal, Branch III, PasayCity, dated May 26, 1975 and May 27, 1976, which respectively denied private respondentKnecht's "Urgent Motion for Intervention" and granted GSIS' "Ex-parte Motion for Issuance ofWrit of Possession" in GLRO Record No. 317 and 1356, or CFI Case No. 1104.

The antecedent facts in the instant case are as follows:

Mariano R. Dulay Enterprises (hereinafter referred to as Dulay) obtained on variousoccassions, real estate loans from the Government Service Insurance System (GSIS forshort) all amounting to P9,535,000.00 (p. 3, Rollo). These loans were secured by a real estatemortgage of a certain parcel of land (which included Hotel Frederick), then covered byTransfer Certificate of Title No. 17638 of the Registry of Deeds of Pasay City, under Act No.3135, as amended by Act No. 4118.


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As of September 10, 1974, DULAY had incurred arrearages in the payment of its loans allamounting to P3,335,878.81. In view thereof, the GSIS instituted extrajudicial foreclosureproceedings on the mortgaged property and on November 5, 1974, the said property was soldat public auction by the Sheriff of Pasay City to the GSIS as the highest bidder forP13,426,382.00. A Certificate of Sale was subsequently issued on November 22, 1974, and thesame was duly registered on December 13, 1974 (p. 4, Rollo).

On January 7, 1975, the GSIS filed with the Court of First Instance (now Regional Trial Court)of Rizal, with station at Pasay City, an "Ex-PartePetition for Issuance of a Writ ofPossession" in the original registration proceedings (therein docketed as GLRO Record No.317 and 1356, or CPI Case No. 1104), conformably with Section 4 of P.D. 385 (p. 355, Rollo).

On January 16, 1975, private respondent Rene C. Knecht (Knecht for short), filed with theaforesaid court, an "Urgent Motion for Intervention" claiming that DULAY had sold theproperty to him on May 4, 1974 and assigned to him on November 5, 1974, the right to redeemthe same. The GSIS opposed the motion alleging that "intervention will not lie when there isno pending litigation; when it impairs substantial rights of the adverse party; when theintervenor is guilty of laches; and that the intervenor has no legal interest in the propertysubject of a writ of possession" (p. 5, Rollo).

On May 26, 1975, the Court of First Instance of Rizal, with Judge Pedro JL. Bautista presiding,denied Knecht's motion for intervention citing Section 7 of Act No. 3135 and Section 4 of PDNo. 385, and, on May 27, 1975, directed the issuance of a writ of possession in favor of theGSIS upon the latter's posting a bond in the amount of P2,000,000.00 (p. 6, Rollo).

On June 11, 1975, Knecht filed a special civil action for cert iorar iwith the Court of Appealswherein he assailed the said Orders of the Court of First Instance of Rizal as having beenissued in grave abuse of discretion amounting to lack of jurisdiction (p. 4, Rollo). The Courtof Appeals immediately, and without any prior hearing, issued a writ of preliminaryinjunction, upon Knecht's filing of a bond in the sum of Pl,000.00, enjoying the Court of FirstInstance of Rizal from issuing the writ of possession and the Sheriff of Pasay City from

executing the same, if already issued (p. 642, Rol

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