LTD Justice Agcaoili Review Outline 2013

UPDATES IN PROPERTY REGISTRATION, MORTGAGES,

CONDOMINIUMS AND RELATED PROCEEDINGS (June 2013)

(Based on Agcaoili, “Property Registration Decree and Related Laws

(Land Titles and Deeds)”, 2011 ed., and “Reviewer in Property Registration

(With Sample MCQs and Suggested Answers)1

Justice Oswaldo D. Agcaoili2

REGALIAN DOCTRINE

Under the Regalian doctrine, all lands of whatever classification and other natural

resources not otherwise appearing to be clearly within private ownership are presumed to

belong to the State which is the source of any asserted right to ownership of land.3

Accordingly, public lands not shown to have been reclassified or released as alienable

agricultural land or alienated to a private person by the State remain part of the

inalienable public domain.4 Property of the public domain is beyond the commerce of

man and not susceptible of private appropriation and acquisitive prescription. Occupation

thereof in the concept of owner no matter how long cannot ripen into ownership and be

registered as a title.5

1 Published by Rex Book Store. See also: “Law on Natural Resources,” and “Reviewer in Property

Registration and Related Laws (with MCQs and Suggested Answers). 2 Justice Oswaldo D. Agcaoili finished law at the University of Sto. Tomas. He obtained a degree in

Management at the Asian Institute of Management. A former Chief of Legislative and Research Section,

Bureau of Lands, he was appointed Solicitor in the Office of the Solicitor General in 1975, and Assistant

Solicitor General in 1984. In 1995, he was appointed Associate Justice of the Court of Appeals. He was

Chairman of the 13th Division upon his retirement from the Court. Court. Justice Agcaoili is a full-time

Professor of the Philippine Judicial Academy (PHILJA) and Professorial Lecturer of the UP Institute for

the Administration of Justice (UP-IAJ) and other MCLE providers. He is a duly accredited Appellate Court

Mediator (ACM). A delegate/participant in several international conferences, he wrote a paper entitled

“Environmental Protection: The Convergence of Law and Policy” which he read during the 20th Biennial

Conference on the Law of the World held in Dublin, Ireland in October 2001. Described by Chief Justice

Reynato S. Puno as “isa sa mga eksperto sa mga karapatan sa lupa (one of our experts on land rights),”

Justice Agcaoili is the author of three books: “Property Registration Decree and Related Laws (Land

Titles and Deeds),” with a Foreword by Chief Justgice Reynato S. Puno, “Law on Natural Resources and

Environmental Law Developments,” with a Foreword by Justic Adolfo S. Azcuna, Chancellor of the

Philippine Judicial Academy, and “Reviewer in Property Registration and Related Proceedings.” (Tel.:

922-0232, 552-9636, 0920-9506384; E-mail: [email protected]) Justice Agcaoili is married to

the former Consuelo Guerrero Jose with whom he has three children, Mario, Cynthia and Wendy now all

residing with their families in the US. 3 Secretary of the DENR v. Yap, GR No. 172775, Oct. , 2008; Arbias v. Republic, GR No. 173808, Sept.

17, 2008; Alcantara v. DENR, GR No. 161881, July 31, 2008; Buenaventura v. Republic, GR No. 166865,

March 2, 2007;Republic v. Candy Maker, Inc., GR No. 163766, June 22, 2006; Pagkatipunan v. Court of

Appeals, GR No. 129862, March 21, 2002; Valiao v. Republic, GR No. 170757, Nov. 28, 2011. 4 Republic v. Tri-Plus Corporation, G.R. No. 150000, September 26, 2006, 503 SCRA 91, 101-102.

5 Republic v. Candy Maker, Inc., G.R. No. 163766, June 22, 2006, 492 SCRA 272, 291.

2

The 1987 Constitution, like the 1935 and 1973 Constitutions,6 embodies the

principle of State ownership of lands and all other natural resources as provided in

Section 2, Art. XII, to wit:

“All lands of the public domain, waters, minerals, coal, petroleum, and

other mineral oils, all forces of potential energy, fisheries, forests or timber,

wildlife, flora and fauna and other natural resources are owned by the State.

With the exception of agricultural lands, all other natural resources shall not be

alienated.”

ANCESTRAL DOMAINS AND

ANCESTRAL LANDS

In Cruz v. Secretary of Environment and Natural Resources,7  petitioners

challenged the constitutionality of RA No. 8371, otherwise known as the Indigenous

Peoples Rights Act of 1997 (IPRA), on the ground that it amounts to an unlawful

deprivation of the State’s ownership over lands of the public domain and all other natural

resources therein, by recognizing the right of ownership of Indigenous Cultural

Communities or Indigenous Peoples (ICCs/IPs) to their ancestral domains and ancestral

lands on the basis of native title. After due deliberation on the petition, the Supreme

Court voted as follows: seven (7) Justices voted to dismiss the petition while seven (7)

others voted to grant the petition. As the votes were equally divided (7 to 7) and the

necessary majority was not obtained, the case was redeliberated upon. However, after

redeliberation, the voting remained the same. Accordingly, pursuant to Section 7, Rule 56

of the Rules of Court, the petition was dismissed, and the validity of the law, deemed

upheld.

Justice Kapunan, voting to dismiss the petition, stated that the Regalian theory

does not negate native title to lands held in private ownership since time immemorial,

adverting to the landmark case of Cariño v. Insular Government,8  where the United

States Supreme Court, through Justice Holmes, declared:

“It might, perhaps, be proper and sufficient to say that when, as far back as

testimony or memory goes, the land has been held by individuals under a claim of

private ownership, it will be presumed to have been held in the same way from before

the Spanish conquest, and never to have been public land.”

The rights of ICCs/IPs may be acquired in two modes: (a) by native title over both

ancestral lands and domains; or (b) by Torrens title under the Public Land Act and

Property Registration Decree with respect to ancestral lands only.

THE TORRENS SYSTEM

OF REGISTRATION

6 Saad Agro-Industries, Inc. v. Republic, GR No. 152570, Sept. 27, 2006.

7Supra.

8212 U.S., 449; 53 Law Ed., 594.

3

The Government has adopted the Torrens system due to its being the most

effective measure to guarantee the integrity of land titles and to protect their

indefeasibility once the claim of ownership is established and recognized. If a person

purchases a piece of land on the assurance that the seller's title thereto is valid, he should

not run the risk of being told later that his acquisition was ineffectual after all, which will

not only be unfair to him as the purchaser, but will also erode public confidence in the

system and will force land transactions to be attended by complicated and not necessarily

conclusive investigations and proof of ownership. The further consequence will be that

land conflicts can be even more abrasive, if not even violent. The Government,

recognizing the worthy purposes of the Torrens system, should be the first to accept the

validity of titles issued thereunder once the conditions laid down by the law are satisfied.9

The Government is required under the Torrens system of registration to issue an

official certificate of title to attest to the fact that the person named in the certificate is the

owner of the property therein described, subject to such liens and encumbrances as

thereon noted or what the law warrants or reserves.10

The objective is to obviate possible

conflicts of title by giving the public the right to rely upon the face of the Torrens

certificate and to dispense, as a rule, with the necessity of inquiring further. The Torrens

system gives the registered owner complete peace of mind, in order that he will be

secured in his ownership as long as he has not voluntarily disposed of any right over the

covered land.11

PURPOSE OF REGISTRATION

The real purpose of the Torrens system of registration, as expressed in Legarda v.

Saleeby,12  a 1915 decision, is to quiet title to land; to put a stop forever to any question

of the legality of the title, except claims which were noted at the time of registration, in

the certificate, or which may arise subsequent thereto. The Torrens system aims to decree

land titles that shall be final, irrevocable, and indisputable,13  and to relieve the land of

the burden of known as well as unknown claims.14

However, the Torrens system does not furnish a shield for fraud,15

nor permit one

to enrich himself at the expense of others,16

otherwise its acceptability is impaired.17

9 Casimiro Development Corporation v. Mateo, GR No. 175485, July 27, 2011Tenio-Obsequio v. Court of

Appeals, G.R. No. 107967, March 1, 1997, 230 SCRA 550. 10

Republic v. Guerrero, G.R. No. 133168, March 28, 2006, 485 SCRA 424; citing Noblejas, Land Titles

and Deeds, 1986 ed., p. 32. 11

Republic v. Court of Appeals, G.R. Nos. L-46626-27, December 27, 1979, 94 SCRA 865, 874. 12

GR No. 8936, Oct. 2, 1915, 31 Phil. 590, 31 Phil. 590; see also Ching v. Court of Appeals, GR No.

59731, Jan. 11, 1990, 181 SCRA 9; National Grains Authority v. Intermediate Appellate Court, GR No. L-

68741, Jan. 28, 1988, 157 SCRA 388. 13

Government of the Philippine Islands v. Abural, GR No. 14167, Aug. 14, 1919, 39 Phil. 996. 14

SM Prime Holdings, Inc. v. Madayag, supra. 15

Rodriguez v. Lim, GR No. 135817, Nov. 30, 2006, 459 SCRA 412; Manlapat v. Court of Appeals, GR

No. 125585, June 8, 2005. 16

Ibid. 17

Ermac v. Ermac, GR No. 149679, May 30, 2003, 403 SCRA 291.

4

REGISTRATION NOT A MODE

OF ACQUIRING OWNERSHIP

Registration is not a mode of acquiring ownership but is merely a procedure to

establish evidence of title over realty.18  It is a means of confirming the fact of its

existence with notice to the world at large. A certificate of title is not a source of right. It

merely confirms or records a title already existing and vested.19 The mere possession thereof does not make one the true owner of the property.20

Mere issuance of the certificate of title in the name of any person does not

foreclose the possibility that the real property may be under co-ownership with persons

not named in the certificate or that the registrant may only be a trustee or that other

parties may have acquired interest subsequent to the issuance of the certificate of title.

Registration is not the equivalent of title, but is only the best evidence thereof.21

DISTINCTION BETWEEN “TITLE”

AND “CERTIFICATE OF TITLE”

Title may be defined briefly as that which constitutes a just cause of exclusive

possession, or which is the foundation of ownership of property. Certificate of title, on

the other hand, is a mere evidence of ownership; it is not the title to the land itself.22

CONSTRUCTIVE NOTICE UPON

REGISTRATION

Registration in a public registry works as constructive notice to the whole world.

Section 51 of Act No. 496, as amended by Section 52 of Presidential Decree No. 1529,

provides:

SECTION 52. Constructive notice upon registration. — Every conveyance,

mortgage, lease, lien, attachment, order, judgment, instrument or entry affecting

registered land shall, if registered, filed or entered in the Office of the Register of Deeds

for the province or city where the land to which it relates lies, be constructive notice to all

persons from the time of such registering, filing, or entering.

REGISTRATION OF LANDS:

GOVERNING LAW

PD No. 1529 (Property Registration Decree) issued on June 11, 1978 covers both

ordinary and cadastral registration proceedings, and supersedes Act No. 496 (Land

18

Solid State Multi-Products Corporation v. Court of Appeals, GR No. 83383, May 6, 1991, 196 SCRA

630; Vagilidad v. Vagilidad, GR No. 161136, Nov. 16, 2006, 507 SCRA 94. 19

Tiro v. Phil Estates Corporation, GR No. 170528, Aug. 26, 2008 563 SCRA 309. 20

Borromeo v. Descallar, supra. 21

Duque-Rosario v. Banco Filipino Savings and Mortgage Bank, GR No. 140528, Dec. 7, 2011. 22

Castillo v. Escutin, GR No. 171056, March 13, 2009, 581 SCRA 258.

5

Registration Act) which took effect on February 1, 1903. Act No. 2259, or the Cadastral

Act, governs cadastral proceedings.

Section 48(b), CA No. 141 (Public Land Act) governs the procedure for the

judicial confirmation of imperfect of incomplete titles over public lands.

JURISDICTION

Regional Trial Courts have plenary jurisdiction over land registration proceedings

and over all petitions filed after original registration of titles.23

The registration court

may now hear both contentious and non-contentious cases.24

But first level courts may be

delegated by the Supreme Court to hear and decide cadastral and land registration cases

(a) covering lots without controversy or opposition, or (b) contested lots where the value

does not exceed P100,000.00.25

Appeal is taken to the Court of Appeals.

All petitions or motions after original registration shall be filed and entitled in the

original case in which the decree of registration was entered.26

Section 19 of BP Blg. 129

confers jurisdiction on the RTC over “all civil actions which involve the title to or

possession of, real property or any interest therein x x x.” The Court of Appeals, or the

LRA for that matter, has no jurisdiction to cancel a certificate of title.27

REGISTRATION UNDER PD 1529

IS A PROCEEDING IN REM

A land registration is a proceeding in rem and jurisdiction in rem cannot be

acquired unless there be constructive seizure of the land through publication and service

of notice.28

CLASSIFICATION OF LANDS

Lands of the public domain are classified into (1) agricultural, (2) forest or timber,

(3) mineral lands, and (4) national parks. With the exception of agricultural lands, all

other natural resources shall not be alienated.29

Sec. 48(b) of CA 141, as amended, applies exclusively to alienable and disposable

public agricultural land. Possession of inalienable public lands, no matter how long,

cannot ripen into private ownership.

23

Sec. 2, PD No. 1529. 24

Averia v. Caguioa, GR No. L-65129, Dec. 29, 1986, 146 SCRA 459. 25

Sec. 34 BP Blg. 129, as amended by RA 7691. See also SC Circular No. 6-93, dated November 15,

1995. 26

Sec. 8, PD No. 1529; Office of the Court Administrator v. Matas, Adm. Mater RTJ-92-836, Aug. 2,

1995, 247 SCRA 9. 27

Manotok v. Barque, GR No. 162335, Dec. 18, 2008. 28

Republic v. Court of Appeals and Ribaya, GR No. 113549, July 5, 1996, 258 SCRA 223. 29

Secs. 2 and 3, Art. XII, Constitution.

6

“SEC. 9. For the purpose of their administration and disposition, the lands of the

public domain alienable or open to disposition shall be classified, according to the use

or purposes to which such lands are destined, as follows:

(a) Agricultural;

(b) Residential, commercial, industrial, or for similar productive purposes;

(c) Educational, charitable, or other similar purposes; and

(d) Reservations for town-sites and for public and quasi-public uses.” (CA No.

141 or the Public Land Act).

ILLUSTRATIVE CASE: CLASSIFICATION

OF BORACAY ISLAND

The case of Secretary of the Department of Environment and Natural Resources

v. Yap30

illustrates the classification by Presidential fiat of Boracay Island in the

Municipality of Malay, Aklan. On May 22, 2006, during the pendency of the case,

President Arroyo issued Proclamation No. 1064 classifying Boracay Island into 400

hectares of reserved forest land (protection purposes) and 628.96 hectares of agricultural

land (alienable and disposable).

Under PD No. 705, or Revised Forestry Code, all unclassified lands are

considered public forest. PD No. 705, however, respects titles already existing prior to its

effectivity.

NON-REGISTRABLE PROPERTIES

Property is either of public dominion or of private ownership.31  The following

things are property of public dominion:

(1) Those intended for public use, such as roads, canals, rivers, torrents, ports

and bridges constructed by the State, banks, shores, roadsteads and others of similar

character;

(2) Those which belong to the State, without being for public use, and are

intended for some public service or for the development of the national wealth.32 

The following properties are outside the commerce of men and may not be

disposed of or registered: lands for public use or public service, forest lands, mineral,

foreshore lands, swamplands, mangrove lands, watershed, rivers and creeks,

seashore, reclaimed and public reservation.

30

Supra. 31

Art. 419, Civil Code. 32

Art. 420, ibid.

7

Properties of public dominion are not only exempt from real estate tax, they are

exempt from sale at public auction. But portions of the properties leased to taxable

entities are not only subject to real estate tax, they can also be sold at public auction to

satisfy the tax delinquency.33

In Laurel v. Garcia,34  the executive department attempted to sell the Roppongi

property in Tokyo, Japan, which was acquired by the Philippine government for use as

the Chancery of the Philippine Embassy. Although the Chancery had transferred to

another location thirteen years earlier, the Court ruled that, under Article 422 of the Civil

Code, property of public dominion retains such character until formally declared

otherwise.

Foreshore lands, or that part of the land adjacent to the sea which is alternately

covered and left dry by the ordinary flow of the tides, belong to the State.35

They can

only be disposed of under a foreshore lease or revocable permit application filed with the

Lands Management Bureau.

In the case of Republic v. Court of Appeals and Republic Real Estate

Corporation,36  the Court held that foreshore lands are lands of public dominion intended

for public use. So too are lands reclaimed by the government by dredging, filling, or other

means. In Chavez v. Public Estates Authority,37  Justice Carpio gives an enlightening

historical background of foreshore and reclaimed lands and the development of the law

governing such lands.

In Republic v. Court of Appeals and Morato,38 the Court held that when the sea

moved towards the estate and the tide invaded it, the invaded property became foreshore

land and passed to the realm of the public domain.

Only when actually reclaimed from the sea can submerged areas be classified as

public agricultural lands, which under the Constitution are the only natural resources that

the State may alienate. Once reclaimed and transformed into public agricultural lands, the

government may then officially classify these lands as alienable or disposable lands open

to disposition. Thereafter, the government may declare these lands no longer needed for

public service. Only then can these reclaimed lands be considered alienable or disposable

lands of the public domain and within the commerce of man.39

Forest and mineral lands are public lands not subject to private ownership.

Subsequent release of forest lands as A and D lands does not validate the grant.40

33

City of Pasig v. Republic, GR No. 185023, Aug. 24, 2011 34

GR No. 92013, July 25, 1990, 17 SCRA 797. 35

Republic v. Court of Appeals, 299 SCRA 199. 36

Supra. 37

Supra. 38

GR No. 100709, Nov. 14, 1997, 281 SCRA 639. 39

Chavez v. Public Estates Authority, supra. 40

Ituralde v. Falcasantos, 301 SCRA 293; Reyes v. Court of Appeals, 295 SCRA 296.

8

“A forested area classified as forest land of the public domain does not lose such

classification simply because loggers or settlers may have stripped it of its forest cover.

Parcels of land classified as forest land may actually be covered with grass or planted to

crops by kaingin cultivators or other farmers. ‘Forest lands’ do not have to be on

mountains or in out of the way places. Swampy areas covered by mangrove trees, nipa

palms, and other trees growing in brackish or sea water may also be classified as forest

land. The classification is descriptive of its legal nature or status and does not have to be

descriptive of what the land actually looks like. Unless and until the land classified as

‘forest’ is released in an official proclamation to that effect so that it may form part of the

disposable agricultural lands of the public domain, the rules on confirmation of imperfect

title do not apply.”41

Minerals found in public or even private land belong to the State.42

In a resolution

dated December 1, 2004, the Supreme Court in La Bugal-B’laan Association v. Ramos43 

held that all mineral resources are owned by the State and their exploration, development

and utilization must always be subject to the full control and supervision of the State.

In Republic v. Court of Appeals and De la Rosa,44  Justice Cruz said that the

Regalian doctrine reserves to the State all natural wealth that may be found in the bowels

of the earth even if the land where the discovery is made be private. Thus, if a person is

the owner of agricultural land in which minerals are discovered, his ownership of such

land does not give him the right to extract or utilize the said minerals without the

permission of the State to which such minerals belong.

Land inside a military or naval reservation cannot be registered.45 the Calumpang

Point Naval Reservation, can not be subject to occupation, entry or settlement. The

government, through the Bases Conversion Development Authority (BCDA), has title

and ownership over Fort Bonifacio. To segregate portions of the public domain as a

military reservation, all that is needed is a presidential proclamation to that effect.

In Republic v. Southside Homeowners Association, Inc.,46 it was held that a

military reservation, like the FBMR, or a part thereof is not open to private appropriation

or disposition and, therefore, not registrable, unless it is in the meantime reclassified and

declared as disposable and alienable public land. And until a given parcel of land is

released from its classification as part of the military reservation zone and reclassified by

law or by presidential proclamation as disposable and alienable, its status as part of a

military reservation remains, even if incidentally it is devoted for a purpose other than as

a military camp or for defense.

41

Amunategui v. Director of Forestry, GR No. L-27873, Nov. 29, 1983, 126 SCRA 69. 42

Republic v. Court of Appeals and Dela Rosa, 160 SCRA 228. 43

GR No. 127882, Dec. 1, 2004, 445 SCRA 1. 44

GR No. L-43938, April 15, 1980, 160 SCRA 228. 45

Republic v. Southside Homeowners Association, Inc. GR No. 156951, Sept. 2, 2006. 46

GR No. 156951, Sept. 22, 2006.

9

Navigable rivers cannot be appropriated and registered,47

and so are lakes,48

watersheds49

and mangrove swamps.50

WHO MAY APPLY FOR REGISTRATION

Under Section 14, PD No. 1529, the following may apply for registration:

(1) Those who by themselves or their predecessors-in-interest have been in

open, continuous, exclusive and notorious possession and occupation of

alienable and disposable lands of the public domain under a bona fide

claim of ownership since June 12, 1945, or earlier.

(2) Those who have acquired ownership of private lands by prescription under

the provisions of existing laws.

(3) Those who have acquired ownership of private lands or abandoned river

beds by right of accession or acquired under existing laws;

(4) Those who have acquired ownership of land in any other manner provided

for by law.

Under Section 48(b) of CA No. 141 (Public Land Act), it is provided as follows:

Those who by themselves or through their predecessors-in-interest have been in

the open, continuous, exclusive and notorious possession and occupation of alienable and

disposable land of the public domain, under a bona fide claim of acquisition of

ownership, since June 12, 1945 or prior thereto may apply for the confirmation of

imperfect or incomplete title.

NO SUBSTANTIAL DIFFERENCE BETWEEN

SEC. 14(1), PD No. 1529 and SEC. 48(b), CA NO. 141

There is no substantial difference between Sec. 14(1) of PD No. 1529 and Sec.

48(b) of CA No. 141. In both, the applicant must show that (1) the land is alienable and

disposable (A and D) public agricultural land; and (2) he has been in open, continuous

exclusive and notorious possession thereof under a bona fide claim of ownership since

June 12, 1945, or prior thereto.51

Both refer to original registration proceedings, are

against the whole world, and the decree of registration for both is conclusive and final.

47

Republic v. Sioson, 9 SCRA 533. 48

Pelbel Manufacturing Corporation v. Court of Appeals, GR No. 141325, July 31, 2006; Republic v.

Court of Appeals and Del Rio, 131 SCRA 532. 49

Sta. Rosa Development Corporation v. Court of Appeals, 367 SCRA 175. 50

Sec. 4, RA No. 8550. 51

Republic v. San Lorenzo Development Corporation, GR No. 170724, Jan. 29, 2007; Reyes v. Republic,

GR No. 141924, Jan. 23, 2007; Republic v. Manna Properties, GR No. 146527, Jan. 31, 2005, 450 SCRA

247..

10

REQUIREMENTS FOR REGISTRATION

UNDER SEC. 14(1), PRD IN RELATION

TO SEC. 48(B), PLA.

Section 14 (1) of the Property Registration Decree has three requisites for

registration of title: (a) that the property in question is alienable and disposable land of

the public domain; (b) that the applicants by themselves or through their predecessors-in-

interest have been in open, continuous, exclusive and notorious possession and

occupation; and (c) that such possession is under a bona fide claim of ownership since

June 12, 1945 or earlier.52

Possession should be in the concept of an owner, public, peaceful, uninterrupted

and adverse. Possession is open when it is patent, visible, apparent, notorious and not

clandestine. It is continuous when uninterrupted, unbroken and not intermittent or

occasional; exclusive when the adverse possessor can show exclusive dominion over the

land and an appropriation of it to his own use and benefit; and notorious when it is so

conspicuous that it is generally known and talked of by the public or the people in the

neighborhood.53

In Malabanan v. Court of Appeals,54

the Court en banc reiterated the rule in

Republic v. Court of Appeals and Naguit55

that “since Section 48(b) (in relation to

Section 14[1]) merely requires possession since 12 June 1945 and does not require that

the lands should have been alienable and disposable during the entire period of

possession, the possessor is entitled to secure judicial confirmation of his title thereto as

soon as it is declared alienable and disposable, subject to the timeframe imposed by

Section 47 of the Public Land Act.”56

Originally, Section 48(b) of CA No. 141 provided for the possession and

occupation of lands of the public domain since July 26, 1984. This was superseded by

RA No. 1942 which provided for a simple 30-year prescriptive period of occupation by

an applicant for judicial confirmation of an imperfect title. The law, however, has been

amended by PD No. 1073, approved on January 25, 1977, which now requires possession

since June 12, 1945 or prior thereto.57

52

Valiao v. Republic, GR No. 170757, Nov. 28, 2011; Victoria v. Republic, GR No. 179673, June 8, 2011;

Republic of the Philippines v. Court of Appeals, 489 Phil. 405, 413 (2005). 53

Republic v. East Silverlane Realty Development Corporation, GR No. 186961, Feb. 20, 2012, citing. Heirs of Marcelina Arzadon-Crisologo v. Rañon, G.R. No. 171068, Sept. 5, 2007, 532 SCRA 391. 54

GR No. 179987, April 29, 2009. 55

448 SCRA 442. 56

Emphasis supplied. 57

Tan v. Republic, GR No. 177797, Dec. 4, 2008; Secretary of the Department of Environment and

Natural Resources v. Yap, GR No. 173775, Oct. 8, 2008; Republic v. Sarmiento, GR No. 169397, March

13, 2007; Republic v. Herbieto, GR No. 156117, 26 May 26, 2005, 459 SCRA 183; Republic v. Doldol,

295 SCRA 359. See also RA No. 6940, dated March 28, 1990.

11

ONLY FILIPINO CITIZENS MAY ACQUIRE

LANDS OF THE PUBLIC DOMAIN

On the basis of their capacity “to acquire or hold lands of the public domain,” the

following may acquire private lands:

(1) Filipino citizens;

(2) Filipino corporations and association as defined in Section 2, Article XII of

the Constitution; and, by exception,

(3) Aliens but only be hereditary succession; and

(4) A natural-born citizen of the Philippines who has lost his citizenship can both

“acquire” or “hold” lands of the public domain, the limitation being up to a

maximum of 5,000 square meters if urban land, or 3 hectares if rural land.58

Private land may be transferred only to individuals or entities “qualified to acquire

or hold lands of the public domain.” Only Filipino citizens or corporations at least 60%

of the capital of which is owned by Filipinos are qualified to acquire or hold lands of the

public domain. The fundamental law explicitly prohibits non-Filipinos from acquiring or

holding title to private lands, except only by way of legal succession or if the acquisition

was made by a former natural-born citizen.59

Aliens, however, may lease private lands.60

The constitutional ban against foreigners applies only to ownership of Philippine

land and not to the improvements built thereon. Land cannot sold to an alien and is

allowed to recover the money spent for the purchase thereof. The provision on unjust

enrichment does not apply if the action is proscribed by the Constitution.61

CAPACITY TO ACQUIRE LAND IS

DETERMINED AT THE TIME OF ITS

ACQUISITION, NOT REGISTRATION

The time to determine whether a person acquiring land is qualified is the time the

right to own it is acquired. Thus, a naturalized Canadian citizen who, while still a

natural-born Filipino, acquired land from a vendor who had already complied with the

requirements of registration prior to the purchase, can validly register his title to the land

even if at the time of the filing of his application he was already an alien.62

He already

had a vested right to the land.

58

Bernas, The 1987 Constitution, A Reviewer Primer, 2000 ed., 515; Sec. 8, Art. XII, Constitution; RA

No. 7042, as amended by RA No. 8179. 59

Borromeo v. Descallar, GR No. 159310, Feb. 24, 2009. 60

Ong Ching Po v. Court of Appeals, 239 SCRA 341; Krivenko v. Register of Deeds, 79 Phil. 461;

Philippine Bank of Commerce v. Lui She, 21 SCRA 52. 61

Beumer v. Amores, GR No. 195670, Dec. 3, 2012, citing cases. 62

Republic v. Court of Appeals and Lapiña, 235 SCRA 567.

12

ACQUISITION OF PRIVATE LAND

BY PRESCRIPTION

In Republic v. East Silverlane Realty Development Corporation,63

Section 14(2)

must be considered in relation to the rule on prescription under the Civil Code as a mode

of acquiring ownership of patrimonial property. Possession and occupation of an

alienable and disposable public land for the periods provided under the Civil Code do not

automatically convert said property into private property or release it from the public

domain. There must be an express declaration that the property is no longer intended for

public service or development of national wealth. Without such express declaration, the

property, even if classified as alienable or disposable, remains property of the State, and

thus, may not be acquired by prescription. And only when the property has become

patrimonial can the prescriptive period for the acquisition of property of the public

dominion begin to run.64

Such declaration shall be in the form of a law duly enacted by

Congress or a Presidential Proclamation in cases where the President is duly authorized

by law.65

The period of possession preceding the classification of the property as

patrimonial cannot be considered in determining the completion of the prescriptive

period.66

Under ordinary acquisitive prescription, a person acquires ownership of a

patrimonial property through possession for at least ten (10) years, in good faith and with

just title. Under extraordinary acquisitive prescription, a person’s uninterrupted adverse

possession of patrimonial property for at least thirty (30) years, regardless of good faith

or just title, ripens into ownership.67

Open, continuous and exclusive possession of land classified as A and D land for

at least thirty years segregates the land from the public domain and ipso jure converts the

same to private property.68

The conversion works to summon in operation Sec. 14(2) of

the Property Registration Decree which authorizes the acquisition of private lands

through ordinary prescription of ten years or extraordinary prescription of thirty years.69

(Note: In the case of Heirs of Marcelina Azardon-Crisologo v. Rañon, 70

the

Court ruled that a mere Notice of Adverse Claim did not constitute an effective

interruption of possession. In the case of Heirs of Bienvenido and Araceli Tanyag v.

Gabriel, 71

which also cited the Rañon Case, the Court stated that the acts of declaring

again the property for tax purposes and obtaining a Torrens certificate of title in one's

63

GR No. 186961, Feb. 20, 2012. 64

Malabanan v. Court of Appeals, GR No. 179987, April 29, 2009. 65

Republic v. Espinosa, GR No. 171514, July 18, 2012 66

Republic v. East Silverlane Realty Development Corporation, supra. 67

Id. 68

Buenaventura v. Republic, GR No. 166865, March 2, 2007; Republic v. Court of Appeals, 235 SCRA

56; See Arts. 1127 and 1134, Civil Code. 69

Lincoma Multi-Purpose Cooperative v. Republic, GR No. 167652, July 10, 2007. 70

G.R. No. 171068, September 5, 2007, 532 SCRA 391. 71

Heirs of Bienvenido and Araceli Tanyag v. Gabriel, G.R. No. 175763, April 11, 2012. citing Heirs of

Marcelina Azardon-Crisologo v. Rañon, G.R. No. 171068, September 5, 2007, 532 SCRA 391, 406-407.

13

name cannot defeat another's right of ownership acquired through acquisitive

prescription. In the same vein, a protest filed before an administrative agency and even

the decision resulting from it cannot effectively toll the running of the period of

acquisitive prescription. Only in cases filed before the courts may judicial summons be

issued and, thus, interrupt possession.72

)

ACQUISITION OF PRIVATE LAND

BY RIGHT OF ACCESSION OR

ACCRETION

Under Article 420, paragraph 173 and Article 502, paragraph 174 of the Civil Code,

rivers and their natural beds are property of public dominion.

River beds which are abandoned through the natural change in the course of the

waters ipso facto belong to the owners whose lands are occupied by the new course in

proportion to the area lost.75 However, the owners of the lands adjoining the old bed shall

have the right to acquire the same by paying the value thereof, which value shall not

exceed the value of the area occupied by the new bed.

By law, accretion — the gradual and imperceptible deposit made through the

effects of the current of the water — belongs to the owner of the land adjacent to the

banks of rivers where it forms.76

The drying up of the river is not accretion. Hence, the

dried-up river bed belongs to the State as property of public dominion, not to the riparian

owner, unless a law vests the ownership in some other person.77

In Celestial v.

Cachopero,78

it was held that a dried-up creek bed is property of public dominion.79

Article 457 of the Civil Code requires that the deposit be gradual and

imperceptible; that it be made through the effects of the current of the water; and that the

land where accretion takes place is adjacent to the banks of rivers.80

However, the

accretion does not automatically become registered land just because the lot which

receives such accretion is covered by a Torrens title. There must be a separate action for

the registration thereof.81

72

Virtucio v. Alegarbes, GR No. 187451, Aug. 29, 2012. 73

Art. 420. The following things are property of public dominion:

1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges

constructed by the State, banks, shores, roadsteads, and others of similar character; . . . . 74

Art. 502. The following are of public dominion:

1) Rivers and their natural beds; . . . . 75

Art. 461, Civil Code. 76

Art. 457, id. 77

Republic v. Santos, GR No. 160453, Nov. 12, 2012. 78

459 Phil. 903 (2003). 79

See also Fernando v. Acuna, GR No. 161030, Sept. 14, 2011. 80

Fernando v. Acuna, GR No. 161030, Sept. 14, 2011. 81

Grande v. Court of Appeals, 5 SCRA 524.

14

Alluvial formation along the seashore is part of the public domain and is not open

to acquisition by adverse possession, unless subsequently declared as no longer needed

for coast guard service, for public use or for special industries.82

PRIVATE CORPORATIONS DISQUALIFIED

FROM ACQUIRING PUBLIC LANDS

A private corporation may not hold alienable lands of the public domain except

by lease not to exceed 1,000 hectares.83

The rule does not apply where at the time the

corporation acquired the land, the same was already private land as when it was

possessed by its predecessor in the manner and for such length of time as to entitle the

latter to registration.84

If the predecessors-in-interest of the corporation have been in possession of the

land in question since June 12, 1945, or earlier, then it may rightfully apply for

confirmation of title to the land.85 In Director of Lands v. Intermediate Appellate Court

and Acme,86  it was held that a private corporation may apply for judicial confirmation of

the land without need of a separate confirmation proceeding for its predecessors-in-

interest first.87

PUBLICATION, MAILING AND POSTING

Within five days from the filing of the application for registration, the court shall

issue an order setting the date and hour of initial hearing which shall not be earlier than

45 days nor later than 90 days from date of the order.88

The public is given notice of the

initial hearing by (a) publication once in the Official Gazette and once in a newspaper of

general circulation; (b) mailing of the notice to persons named in the application for

registration and also to relevant government officials, and (c) posting of the notice on a

conspicuous place on the land itself and on the bulletin board of the city or municipality

where the land is situated.89

Publication in the OG shall be sufficient to confer

jurisdiction.90

However, publication of the notice in a newspaper of general circulation

remains an indispensable requirement consistent with procedural due process.91

82 Ignacio v. Director of Lands, 108 Phil. 335. 83

Sec. 3, Art. XII, Constitution. 84

Republic v. Intermediate Appellate Court and ACME, 146 SCRA 509. 85

Republic v. Iglesia ni Cristo, GR No. 180067, June 30, 2009, 591 SCRA 438. 86

GR No. 73002, Dec. 29, 1986, 230 Phil. 590. 87

Republic v. Manna Properties, Inc., supra. 88

Sec. 23, PD No. 1529. 89

Id. 90

Sec. 24, PD No. 1529. 91

Roxas v. Court of Appeals, 63 SCRA 302; Director of Lands v. Court of Appeals and Abistado, 27

SCRA 276.

15

If amendment of the application is made to include additional area, a new

publication of the amended application must be made, but not when the amendment

consists in the exclusion of a portion form the area originally applied for.92

OPPOSITION

Any person, whether named in the notice or not, may appear and file and

opposition, based on right of dominion or some other real right, to the application for

registration.93

The absence of opposition does not justify outright registration. Since the

presumption is that all lands belong to the State, the applicant has the burden of proving

his imperfect right or fee simple title to the land applied for.94

The failure of the

government to file an opposition, despite receipt of notice, does not deprive it of its right

to appeal a decision adjudicating the land as private property.95

PROOF AS TO THE

IDENTITY OF THE LAND

As required by Section 17 of PD No. 1529, the application for registration must

be accompanied by a survey plan of the land duly approved by the Director of Lands

(now Regional Technical Director, Lands Management Bureau), together with the

applicant’s muniments of title. No plan or survey may be admitted in land registration

proceedings until approved by the Director of Lands.

In Director of Lands v. Reyes,96  the Supreme Court declared that the submission

of the tracing cloth plan is a statutory requirement of mandatory character. But in

Director of Lands v. Court of Appeals and Iglesia ni Cristo,97  the Court considered the

submission of a white print copy of the plan as sufficient to identify the land. The Court

was more categorical in Director of Lands v. Intermediate Appellate Court and

Espartinez98  when it stated that “the presentation of the tracing cloth plan required x x x

may now be dispensed with where there is a survey plan the correctness of which had not

been overcome by clear, strong and convincing evidence.”

PROOF OF CLASSIFICATION

OF LAND AS “A AND D”

The following may be considered sufficient to establish the classification of land

as alienable and disposable land for purposes of original registration:

1. Certification of the Bureau of Forest Development that the land has been

92

Benin v. Tuason, 57 SCRA 531. 93

Sec. 27 PD No. 1529. 94

Director of Lands v. Agustin, 42 Phil. 227. 95

Regalado v. Republic, GR No. 168155, Feb. 15, 2007. 96

GR No.L-27594, Nov. 28, 1975, 68 SCRA 177. 97

GR No. L-56613, March 14, 1988, 158 SCRA 586. 98

GR No. 70825, March 11, 1991, 195 SCRA 98.

16

released as alienable and disposable land.

2. Land Classification Map showing that the land lies within the alienable

and disposable portion of the public domain.

3. Executive proclamation withdrawing from a reservation a specific area

and declaring the same open for entry, sale or other mode of disposition.

4. Legislative act or executive proclamation reserving a portion of the public

domain for public or quasi-public use, which amounts to a transfer of ownership to the

grantee.

5. The report of a land inspector of the Bureau of Lands that the subject land

was found inside an “agricultural zone” and is suitable for rice cultivation “is binding on

the courts inasmuch as it is the exclusive prerogative of the Executive Department of the

Government to classify public lands. The classification is descriptive of its legal nature or

status and does not have to be descriptive of what the land actually looks like.”99

6. A certification by the CENRO of the DENR stating that the land subject of an

application is found to be within the alienable and disposable site per a land classification

project map is sufficient evidence to show the real character of the land subject of the

application.100

7. The Certification by DENR Regional Technical Director that “Lot 249 had

been verified as belonging to the alienable and disposable area as early as July 18, 1925,”

as annotated on the subdivision plan, constitutes substantial compliance with the legal

requirement.101

In Republic v. T.A.N. Properties, Inc.,102 the Court held that the applicant shall

submit a (a) CENRO or PENRO certification that the land is A and D, and (b) copy of

the original classification approved by the DENR Secretary and certified as true by the

legal custodian thereof.

But in DENR Memorandum No. 564, dated Nov. 15, 2012, it was clarified that

the issuance of the certification and the certified copy of the approved LC Map to prove

that the area applied for is indeed classified as A and D is “within the competence and

jurisdiction” of the CENRO where the area is below 0.50 has., or the PENRO where it is

99

Republic v. De Porkan, GR No. L-66866, June 18, 1987, it is not enough for the Provincial Environment

and Natural Resources Officer (PENRO) or Community Environment and Natural Resources Officer

(CENRO) to certify that a land is alienable and disposable. The applicant for land registration must prove

th 151 SCRA 88. 100

Llanes v. Republic, GR No. 177947, Nov. 27, 2008, 572 SCRA 258, citing Republic v. Candy Maker,

Inc., GR No. 163766, June 22, 2006, 492 SCRA 272. 101

Republic v. Serrano, GR No. 183063, Feb. 24, 2010. 102

GR No. 154953, June 26, 2008, 613 SCRA 537. See also Republic v. Bantigue, GR No. 162322, March

14, 2012; Republic v. Dela Paz, GR No. 171631, Nov. 5, 2010; Mercado v. Valley Mountain Mines

Exploration, Inc., GR No. 141019, Nov. 23, 2011; Victoria v. Republic, GR No. 179673, June 8, 2011.

17

more than 0.50 has.

In Llanes v. Republic,103

the Court allowed consideration of a CENRO

Certification though it was only presented during appeal to the CA to avoid a patent

unfairness. In Victoria v. Republic,104

the subject property was covered by a cadastral

survey of Taguig conducted by the government. The Court held: “Such surveys are

carried out precisely to encourage landowners and help them get titles to the lands

covered by such survey. It does not make sense to raise an objection after such a survey

that the lands covered by it are inalienable land of the public domain, like a public forest.

This is the City of Taguig in the middle of the metropolis.”

That there are building structures, residential houses and even government

buildings existing and standing on the area does not prove that the land is no longer

considered and classified as forest land.105

EVIDENCE OF POSSESSION

Under Section 48(b) of CA No. 141 and Section 14(1) of PD No. 1529, the

reckoning point of possession is June 12, 1945.106

It is only necessary that the land is

already classified as A and D land at the time of the filing of the application for

registration.107

Possession must be open, continuous, exclusive and notorious under a bona fide

claim of ownership since June 12, 1945 or earlier.108

Acts of a possessory character by

virtue of a license or mere tolerance on the part of the real owner are not sufficient.109

Mere casual cultivation of land, the raising of cattle or grazing of livestock without

substantial enclosures or other permanent improvements do not constitute exclusive and

notorious possession under claim of ownership110

TAX DECLARATIONS AND

TAX RECEIPTS

Tax declarations and payment of taxes are not conclusive proof of ownership but

have strong probative value when accompanied by proof of actual possession or

supported by other effective proof.111

Declaring land for taxation purposes and visiting it

every once in a while do not constitutes acts of possession.112

Tax declarations are not

103

G.R. No. 177947, November 27, 2008, 572 SCRA 258, 268-269. 104 GR No. 179673, June 8, 2011. 105

Chang v. Republic, GR No. 171726, Feb. 23, 2011. 106

Del Rosario-Igtiben v. Republic, GR No. 158449, Oct. 22, 2004, 441 SCRA 188.. 107

Malabanan v. Republic, GR No. 179987, April 29, 2009, 587 SCRA 172. 108

Sec. 14(1), PD No. 1529; Sec. 48(b), CA No. 141, as amended; Tan v. Republic, GR No. 177797, Dec.

4, 2008; Republic v. Herbieto, GR No. 156117, 26 May 2005, 459 SCRA 183 109

Seminary of San Carlos v. Municipality of Cebu, GR No. L-4641, March 13, 1911, 19 Phil.32. 110

Municipality of Santiago v. Court of Appeals, 120 SCRA 734; Director of lands v. Reyes, 68 SCRA 177. 111

Tan v. Republic, GR No. 177797, Dec. 4, 2008; Municipality of Santiago v. Court of Appeals, id. 112

Director of Lands v. Intermediate Appellate Court, 209 SCRA 214.

18

evidence of the right of possession unless supported by the other effective proof. But

they constitute proof that the holder has claim of the title over the property.113

Payment of taxes is on an annual basis. Delayed declaration of property for tax

purposes negates a claim of continuous, exclusive, and uninterrupted possession in the

concept of owner.114

Hence, payment in one a lump sum to cover all past taxes is

“irregular” and affects the validity of the applicant’s claim of ownership.115

But mere

failure of the owner to pay taxes does not warrant a conclusion that there was

abandonment of the property.116

SPANISH TITLES NO LONGER

VALID PROOF OF OWNERSHIP

Spanish titles are no longer admissible as proof of ownership. The so-called

Titulo de Propriedad No. 4136 is inexistent.117

In a case, TCT No. 451423-A was traced

back to Titulo de Propriedad No. 4136, which, in the Intestate Estate of the late Don

Mariano San Pedro y Esteban v. Court of Appeals, was already declared null and void,

and from which no rights could therefore be derived.118

JUDGMENT; DECREE OF REGISTRATION

Within 15 days from entry of judgment, the court shall issue an order directing the

Land Registration Authority (LRA) to issue a decree of registration and certificate of

title.119

There is no period within which to issue the decree.120

While the judgment becomes final 15 days from receipt of notice of the judgment

(as to the government, period of appeal shall be reckoned from receipt of the decision by

the Solicitor General who represents the government in all registration proceedings),121

the court nevertheless retains jurisdiction over the case until after the expiration of one

year from the issuance of the decree of registration;122

hence, the case may still be

reopened and the decision set aside when granted.123

Execution pending appeal is not applicable in a land registration proceeding and

the certificate of title thereby issued is null and void. A Torrens title issued on the basis of

113

Municipality of Antipolo v. Zapanta, 133 SCRA 820; Masagana v. Argamora, 109 SCRA 53; Director

of lands v. Reyes, 68 SCRA 177. 114

Regalado v. Republic, GR No. 168155, Feb. 15, 2007. 115

Republic v. Tayag, 131 SCRA 140. 116

Reyes v. Sierra, 93 SCRA 472. 117

PD No. 892, dated Aug. 16, 1976; Santiago v. SBMA, GR No. 156888, Nov. 20, 2006; Quezon

Province v. Marte, GR No. 139274, Oct. 23, 2001; Intestate Estate of Don Mariano San Pedro v. Court of

Appeals, 265 SCRA 733; Director of Land v. Rivas, 141 SCRA 329. 118

De la Rosa v. Valdez, GR No. 159101, July 27, 2011. 119

Sec. 30, PD No. 1529) 120

Del Rosario v. Limcaoco, GR No. 177392, Nov. 26, 2012. 121

Sec. 1 (e), PD No. 478; Republic v. Sayo, 191 SCRA 71. 122

Gomez v. Court of Appeals, 168 SCRA 503. 123

Cayanan v. De los Santos, 21CRA 1348.

19

a judgment that is not final is a nullity, as it is violative of the explicit provisions of the

Property Registration Decree which requires that a decree shall be issued only after the

decision adjudicating the title becomes final and executory, and it is on the basis of said

decree that the Register of Deeds concerned issues the corresponding certificate of

title.124

A land registration court has no jurisdiction to order the registration of land

already decreed in the name of another in an earlier land registration case. A second

decree for the same land would be null and void.125

In Director of Lands v. Court of Appeals,126

the Court held that a judicial

declaration that a parcel of land is public, does not preclude even the same applicant from

subsequently seeking a judicial confirmation of his title to the same land, provided he

thereafter complies with the provisions of Section 48127

of Commonwealth Act No. 141,

as amended, and as long as said public lands remain alienable and disposable.128

WRIT OF POSSESSION

The writ may be issued not only against the person defeated in the registration

case but also against any one adversely occupying the land during the proceedings up to

the issuance of the decree.129

The writ does not lie against a person who entered the land

after the issuance of the decree and who was not a party in the case. He can only be

proceeded against in a separate action for ejectment or reivindicatory action.130

The writ

is imprescriptible. A writ of demolition is but a compliment of the writ of possession131

and may be issued by a special order of the court. Mandamus is a proper remedy to

compel the issuance of a writ of possession.132

124

Top Management Programs Corp. v. Fajardo, GR No.150462, June 15, 2011, citing cases. 125

Mercado v. Valley Mountain Mines Exploration, Inc., GR No. 141019, Nov. 23, 2011, citing Laburada

v. Land Registration Authority, G.R. No. 101387, March 11, 1998, 287 SCRA 333, 343-344, citing

Metropolitan Waterworks and Sewerage Systems v. Court of Appeals, G.R. No. 103558, November 17,

1992, 215 SCRA 783, 788. 126

G.R. No. 45828, June 1, 1992, 209 SCRA 457, 463, citing Director of Lands v. Court of Appeals, No.

L-47847, July 31, 1981, 106 SCRA 426, 433. 127

Sec. 48. The following described citizens of the Philippines, occupying lands of the public domain or

claiming to own any such land or an interest therein, but whose titles have not been perfected or completed,

may apply to the Court of First Instance of the province where the land is located for confirmation of their

claims and the issuance of a certificate of title therefor, under the Land Registration Act, to wit:

xxx xxx xxx

(b) Those who by themselves or through their predecessors-in-interest have been in open,

continuous, exclusive, and notorious possession and occupation of agricultural lands of the public domain,

under a bona fide claim of acquisition of ownership, since June 12, 1945, or earlier, immediately preceding

the filing of the application for confirmation of title, except when prevented by war or force majeure. These

shall be conclusively presumed to have performed all the conditions essential to a Government grant and

shall be entitled to a certificate of title under the provisions of this chapter. (Emphasis supplied). 128

Valiao v. Republic, GR No. 170757, Nov. 28, 2011 129

Vencilao v. Vano, 182 SCRA 491. 130

Bernas v. Nuevo, 127 SCRA 399. 131

Gawaran v. Intermediate Appellate Court, 162 SCRA 154; Lucero v. Leot, 25 SCRA 687. 132

Edralin v. Philippine Veterans Bank, GR No. 168523, March 9, 2011.

20

JURISDICTION: REAL ACTIONS

Section 1, 14 Rule 14 of the 1997 Rules of Civil Procedure provides that actions

affecting title to or possession of real property or an interest therein (real actions) shall be

commenced and tried in the proper court that has territorial jurisdiction over the area

where the real property or any part thereof is situated.

An action for reconveyance or to remove a cloud on one's title involves the title

to, or possession of, real property, or any interest therein, hence, exclusive original

jurisdiction over such action pertains to the RTC, unless the assessed value of the

property does not exceed P20,000.00 (or P50,000.00 in Metro Manila), in which instance

the MTC having territorial jurisdiction would have exclusive original jurisdiction.

Determinative of which regular court had jurisdiction would be the allegations of the

complaint (on the assessed value of the property) and the principal relief thereby

sought.133

Actions for cancellation of title and reversion belong to the class of cases that

"involve the title to, or possession of, real property, or any interest therein" and where the

assessed value of the property exceeds P20,000.00, fall under the jurisdiction of the

RTC.134

When the dispossession or unlawful deprivation has lasted more than one year,

one may avail himself of accion publiciana to determine the better right of possession, or

possession de jure, of realty independently of title. On the other hand, accion

reivindicatoria is an action to recover ownership which necessarily includes recovery of

possession. While an accion reivindicatoria is not barred by a judgment in an ejectment

case, such judgment constitutes a bar to the institution of the accion publiciana. 135

REMEDIES CONSEQUENT TO

FRAUDULENT OR IRREGULAR

REGISTRATION

The aggrieved party has a number of remedies to question the validity of the

decision. These include the remedies of new trial or reconsideration under Rule 37 of the

Rules of Court, relief from judgment under Rule 38, or appeal to the Court of Appeals or

Supreme Court pursuant to Section 33, PD No. 1529.

Under the property Registration Decree, the remedies consequent to fraudulent or

irregular registration are: review of decree under Section 32; reconveyance under Secs.

53 and 96; damages under Sec. 32; claim against the Assurance Fund under Sec. 95;

reversion under Sec. 101, CA No. 141; cancellation of title; quieting of title; annulment

133

Reterta v. Mores, GR No. 159941, Aug. 17, 2011, citing Heirs of Generoso Sebe v. Heirs of Veronico

Sevilla, G.R. No. 174497, October 12, 2009, 603 SCRA 395, 400. 134

Republic v. Roman Catholic Archbishop, GR No. 192975, Nov. 12, 2012; Santos v. CA, 214 SCRA

162. 135

Viray v. Usi, GR No. 192486, Nov. 21, 2012, citing cases.

21

of judgment under Rule 47; and criminal prosecution under the Revised Penal Code and

other special laws.

Petition for review of decree. (Sec. 32, PD No. 1529)

In Eland Philippines, Inc. v. Garcia,136 the Supreme Court, citing Agcaoili,

“Property Registration Decree and Related Laws (Land Titles and Deeds)”, stressed that

courts may reopen proceedings already closed by final decision or decree when an

application for review is filed by the party aggrieved within one year from the issuance of

the decree of registration. However, the basis of the aggrieved party must be anchored

solely on actual fraud.

It has been ruled that the petition may be filed at any time after the rendition of

the court’s decision and before the expiration of one year from the entry of the final

decree of registration for, as noted in Rivera v. Moran,137  there can be no possible reason

for requiring the complaining party to wait until the final decree is entered before urging

his claim of fraud.

The rule on the incontrovertibility and indefeasibility of a Torrens title after one

year from entry of the decree of registration is equally applicable to titles acquired

through homestead or free patents.138 It has been held that the date of issuance of the

patent corresponds to the date of the issuance of the decree in ordinary registration cases.

Under the Torrens system of registration, the Torrens becomes indefeasible and

incontrovertible one year from the issuance of the final decree and is generally conclusive

evidence of the ownership.139

The rule on the inconvertibility and indefeasibility of a

Torrens title after one year from entry of the decree of registration is equally applicable to

title acquired through homestead or free patents.140

Only extrinsic or collateral, as

distinguished form intrinsic, fraud is a ground for annulling a judgment.

To avail of a petition for review, the following requisites must be satisfied: (a) the

petitioner must have an estate or interest in the land; (b) he must show actual fraud in the

procurement of the decree of registration; (c) the petition must be filed within one (1)

year from the issuance of the decree by the Land Registration Authority; and (d) the

property has not yet passed to an innocent purchaser for value.141

Extrinsic fraud refers to any fraudulent act of the successful party in a litigation

which is committed outside the trial of a case against the defeated party, or his agents,

attorneys or witnesses, whereby said defeated party is prevented from presenting fully

and fairly his side of the case. On the other hand, intrinsic fraud refers to acts of a party

136

GR No. 173289, Feb. 17, 2010, per Justice Peralta. 137

GR No. 24568, March 2, 1926, 48 Phil. 836. 138

Iglesia ni Cristo v. CFI of Nueva Ecija, GR No. L-35273, July 25, 1983, 208 Phil. 441. 139

Calalang v. Register of Deeds, 231 SCRA 88 (1992) 140

Iglesia ni Cristo v. CFI of Nueva Ecija, GR No. L-35273, July 25, 1983, 208 Phil. 441. 141

Walstrom v. Mapa, GR No. 38387, Jan. 29, 1990, 181 SCRA 431.

22

in a litigation during the trial, such as the use of forged instruments or perjured testimony,

which did not affect the presentation of the case, but did prevent a fair and just

determination of the case.

Relief is granted to a party deprived of his interest in land where the fraud consists

in the following acts:

(a) Deliberate misrepresentation that the lots are not contested when in fact they

are;

(b) Applying for and obtaining adjudication and registration in the name of a co-

owner of land which he knows had not been alloted to him in the partition;

(c) Intentionally concealing facts, and conniving with the land inspector to

include in the survey plan the bed of a navigable stream;

(d) Willfully misrepresenting that there are no other claims;

(e) Deliberately failing to notify the party entitled to notice;

(f) Inducing a claimant not to oppose the application for registration;

(g) Misrepresentation by the applicant about the identity of the lot to the true

owner causing the latter to withdraw his opposition.142 

(h) Failure of the applicant to disclose in her application for registration the vital

facts that her husband’s previous application for a revocable permit and to

purchase the lands in question from the Bureau of Lands had been rejected,

because the lands were already reserved as a site for school purposes;

(i) Deliberate falsehood that the lands were allegedly inherited by the applicant

from her parents, which misled the Bureau of Lands into not filling the

opposition and thus effectively depriving the Republic of its day in court.143

In all these examples, the overriding consideration is that the fraudulent scheme of

the prevailing litigant prevented a party from having his day in court or from presenting

his case. The fraud, therefore, is one that affects and goes into the jurisdiction of the

court.

In Cruz v. Navarro,144  it was held that the intentional omission by the respondent

to properly inform the court a quo that there were persons (the petitioners) in actual

possession and cultivation of the parcels in question, with the result that the court as well

as the Land Registration Authority were denied of their authority to require the sending

142

Libudan v. Palma Gil, GR No. L-21164, May 17, 1972, 45 SCRA 17. 143

Republic v. Lozada, GR No. L-43852, May 31, 1979, 90 SCRA 502. 144

GR No. L-27644, Nov. 29, 1973, 54 SCRA 109.

23

of specific individual notices of the pendency of the application in accordance with

Sections 23 and 24 of the Property Registration Decree, constitutes actual fraud.

Reconveyance. (Sec. 96 PD No. 1529)

An action for reconveyance is a legal and equitable remedy granted to the rightful

landowner, whose land was wrongfully or erroneously registered in the name of another,

to compel the registered owner to transfer or reconvey the land to him.145

An action for reconveyance is an action in personam available to a person whose

property has been wrongfully registered under the Torrens system in another's name. It is

filed as an ordinary action in the ordinary courts of justice and not with the land

registration court. A notice of lis pendens may be annotated on the certificate of title

immediately upon the institution of the action in court.146

As held in Medizabel v. Apao,147

the essence of an action for reconveyance is that

the certificate of title is respected as incontrovertible. What is sought is the transfer of the

property, in this case its title, which has been wrongfully or erroneously registered in

another person's name, to its rightful owner or to one with a better right. The mere

issuance of the certificate of title in the name of any person does not foreclose the

possibility that the real property may be under co-ownership with persons not named in

the certificate or that the registrant may only be a trustee or that other parties may have

acquired interest subsequent to the issuance of the certificate of title.148

Reconveyance does not aim to reopen proceedings but only to transfer or

reconvey the land from registered owner to the rightful owner.149

Reconveyance is

available in case of registration of property procured by fraud thereby creating a

constructive trust between the parties.150

To warrant a reconveyance of the land, the following requisites must concur:

(a) the action must be brought in the name of a person claiming ownership or

dominical right over the land registered in the name of the defendant;

(b) the registration of the land in the name of the defendant was procured

through fraud or other illegal means;

(c) the property has not yet passed to an innocent purchaser for value; and

145

Leoveras v. Valdez, GR No. 169985, June 15, 2011. 146

Muñoz v. Yabut, GR No. 142676, June 6, 2011, citing cases. 147

G.R. No. 143185, February 20, 2006, 482 SCRA 587, 608. See also Fernando v. Acuna, GR No.

161030, Sept. 14, 2011 148

Pineda v. Court of Appeals. 456 Phil. 732, 748 (2003), citing Lee Tek Sheng v. Court of Appeals, 354

Phil. 556, 561-562 (1998). 149

Bautista-Borja v. Bautista, GR No. 136197, Dec. 10, 2008; Daclag v. Macahilig, GR No. 159578, July

28, 2008; Esconde v. Barlongay, 152 SCRA 603; Rodriguez v. Toreno, 79 SCRA 356. 150

Huang v. Court of Appeals, GR No. 198525, September 13, 1994.

24

(d) the action is filed after the certificate of title had already become final and

incontrovertible but within four years from the discovery of the fraud,151 or

not later than 10 years in the case of an implied trust.152

A petition for review and action for reconveyance are no longer available if the

property has already been transferred to an innocent purchaser for value.

Article 434 of the Civil Code provides that to successfully maintain an action to

recover the ownership of a real property, the person who claims a better right to it must

prove two (2) things: first, the identity of the land claimed; and second, his title thereto.153

There is no special ground for an action for reconveyance, for it is enough that the

aggrieved party asserts a legal claim in the property superior to the claim of the registered

owner, and that the property has not yet passed to the hands of an innocent purchaser for

value.154

ACTION FOR RECONVEYANCE MAY

BE BARRED BY PRESCRIPTION

(1) Action based on fraud - four years

(2) Action based on implied trust - ten years

(3) Action based on a void contract – imprescriptible

(4) Action to quiet title where plaintiff is in possession – imprescriptible

An action for reconveyance based on implied or constructive trust prescribes in

ten (10) years from the issuance of the Torrens title over the property, or the instrument

affecting the same is inscribed in accordance with law, inasmuch as it is what binds the

land and operates constructive notice to the world. Repudiation of said trust is not a

condition precedent to the running of the prescriptive period. 155

The 10-year prescriptive period applies only when the reconveyance is based on

fraud which makes a contract voidable (and that the aggrieved party is not in possession

of the land whose title is to be actually reconveyed). It does not apply to an action to

nullify a contract which is void ab initio. Article 1410 of the Civil Code categorically

151

Balbin v. Medalla, GR No. L-46410, Oct. 30, 1981, 108 SCRA 666, which held that: “An action for

reconveyance of real property resulting from fraud may be barred by the statute of limitations, which

requires that the action shall be filed within four (4) years from the discovery of the fraud.” 152

New Regent Sources, Inc. v. Tanjuatco, GR No. 168800, April 16, 2009, 585 SCRA 329, citing

Walstrom v. Mapa, GR No. 38387, Jan. 29, 1990, 181 SCRA 431; Kionisala v. Dacut, GR No. 147379,

Feb. 27, 2002, 378 SCRA 206. 153

Fierro v. Seguiran, GR No. 152141, Aug. 8, 2011, citing Hutchinson v. Buscas, 498 Phil. 257, 262

(2005). 154

Reterta v. Mores, GR No. 159941, Aug. 17, 2011; Heirs of Valeriano S. Concha, Sr. v. Lumocso, G.R.

No. 158121, December 12, 2007, 540 SCRA 1, 13-14. 155

Cabacungan v. Laigo, GR No. 175073, Aug. 15, 2011Spouses Abrigo v. De Vera, 476 Phil. 641, 653

(2004).

25

states that an action for the declaration of the inexistence of a contract does not

prescribe.156

But prescription does not run against the plaintiff in actual possession of the

disputed land because such plaintiff has a right to wait until his possession is disturbed or

his title is questioned before initiating an action to vindicate his right.157

LACHES MAY BAR RECOVERY

Where a court of equity finds that the position of the parties has to change that

equitable relief cannot be afforded without doing injustice, or that the intervening rights

of third persons may be destroyed or seriously impaired, it will not exert its equitable

powers in order to save one from the consequences of his own neglect.158  This is the

basic principle of laches which may bar recovery for one’s neglect or inaction.

Cancellation of title

Fraud and misrepresentation, as grounds for cancellation of patent and annulment

of title, should never be presumed, but must be proved by clear and convincing evidence,

mere preponderance of evidence not being adequate. Fraud is a question of fact which

must be proved.159

Action for damages. (Sec. 32, PD No. 1529)

This action may be filed against applicant or person responsible for the fraud

where reconveyance is no longer possible as when the land has been transferred to an

innocent purchaser for value.160

Action for compensation from the Assurance Fund. (Sec. 95, PD No.

1529)

The requisites for recovery are: (a) a person sustains loss or damage, or is

deprived by any estate or interest in land; (b) on account of the bringing of land under the

Torrens system; (c) through fraud, error, omission, mistake or misdescription in the

certificate of entry in the registration book; (d) without negligence on his part, and (e) is

barred from bringing an action for recovery of the land.161

Reversion. (Sec. 101, CA No. 141)

156

Abalols v.Dimakuta, GR No. 164693, March 23, 2011. 157

Yared v. Tiongco, GR No. 161360, Oct. 19, 2011. 158

Lucas v. Gamponia, GR No. L-9335, Oct. 31, 1956, 100 Phil. 277. 159

Sampaco v. Lantud, GR No. 163551, July 18, 2011 160

Ching v. Court of Appeals, 181 SCRA 9) 161

Sec. 95, PD No. 1529.

26

The action is instituted by the government, through the Solicitor General, in all

cases where lands of public domain are held in violation of the Constitution162

or were

fraudulently obtained.163

Annulment of Judgment. (Rule 47, Rules of Court)

A petition for annulment by the Court of Appeals of judgments or final orders of

Regional Trial Court for which the ordinary remedies of new trial, appeal, etc. are no

longer available must be based on (a) extrinsic fraud, (b) lack of jurisdiction164

and (c)

lack of due process.165

A petition for annulment of judgment based on extrinsic fraud

must be filed within four (4) years from its discovery; and if based on lack of jurisdiction,

before it is barred by laches or estoppel.166

Lack of jurisdiction as a ground for annulment of judgment refers to either lack of

jurisdiction over the person of the defending party or over the subject matter of the

claim.167

Where the questioned judgment is annulled, either on the ground of extrinsic

fraud or lack of jurisdiction, the same shall be set aside and considered void.168

Annulment of judgment is a remedy in law independent of the case where the judgment

sought to be annulled was rendered. Consequently, an action for annulment of judgment

may be availed of even if the judgment to be annulled had already been fully executed or

implemented.169

In Yujuico v. Republic,170

the Court ruled that the action of the government for

reversion on the ground that the land was part of the Manila Bay was improperly filed

with the RTC as the action should have been filed with the Court of Appeals pursuant to

Rule 47 of the Rules of Court governing annulment of judgments of RTCs.

Final judgments of quasi-judicial tribunals or administrative bodies are not

susceptible to petitions for annulment under Rule 47.171

PURCHASER IN GOOD FAITH

Section 32 of PD No. 1529 provides that “in no case shall such (petition for

review) be entertained by the court where an innocent purchaser for value has acquired

the land or an interest therein, whose rights may be prejudiced.”

162

Sec. 35, Chapter XII, Title III, EO No. 292. 163

Hermosilla v. Remoquillo, GR No. 167320, Jan. 30, 2007. 164

Rule 47. Rules of Court. 165

Diona v. Balangue, GR No. 173559, Jan. 7, 2013. 166

Section 3, id.; Galicia v. Manliquez, GR No. 155785, April 13, 2007. 167

Alcazar v. Arante, GR No. 177042, Dec. 10, 2012. 168

RULES OF COURT, Rule 47, Sec. 7; Bulawan v. Aquende, GR No. 182819, June 22, 2011. 169

Bulawan v. Aquende, supra. 170

GR No. 168861, Oct. 26, 2007, citing Agcaoili, “Property Registration Decree and Related Laws.” 171

Fraginal v. Parañal, GR No. 150207, Feb. 23, 2007, 516 SCVRA 530.

27

An innocent purchaser for value is one who buys the property of another without

notice that some other person has a right to or interest in it, and who pays a full and fair

price at the time of the purchase or before receiving any notice of another person’s

claim.172

A person dealing with registered property need not go beyond, but only has to

rely on, the title. He is charged with notice only of such burdens and claims which are

annotated on the title, for registration is the operative act that binds the property.173  But a

purchaser can not close his eyes to facts which should put a reasonable man on his guard

and still claim that he acted in good faith.174

The rule of caveat emptor requires the purchaser to be aware of the supposed title

of the vendor and one who buys without checking the vendor’s title takes all the risks and

losses consequent to such failure.

Article 1544 of the Civil Code provides that, as regards immovable property,

ownership shall belong to the person acquiring it who in good faith first recorded the sale

in the Registry of Property.

In Cruz v. Bancom Finance Corporation, the adverse claim and the notice of lis

pendens were annotated on the title on October 30, 1979 and December 10, 1979,

respectively; the real estate mortgage over the subject property was registered by

respondent only on March 14, 1980. The Court stated that the prior registration of a lien

created a preference. Even a subsequent registration of the prior mortgage will not diminish this preference, which retroacts to the date of the annotation of the notice of lis

pendens and the adverse claim.

The maxim prior est in tempore, potior est in jure (he who is first in time is

preferred in right) is followed in land registration.175

Thus, it has been held in a case that

Mahinay’s notice of lis pendens having been registered ahead of Sorensen's real estate

mortgage, the notice of lis pendens takes precedence over the real estate mortgage. The

claim of Sorensen that the owner's copy of TCT No. 117531 does not contain any adverse

annotation at the time the owners transacted with her is of no moment. Being in the

nature of involuntary registration, the annotation of the notice of lis pendens on the

original copy of TCT No. 117531 on file with the Registry of Deeds is sufficient to bind

third parties. It affects the whole world even if the owner's copy does not contain the

same annotation.176

The phrase “innocent purchaser for value” in Section 32 of the Property

172

Rosales v. Burgos, GR No. 143573, Jan. 30, 2009, 577 SCRA 264. 173

Unchuan v. Court of Appeals, GR No. 78775, May 31, 1988, 161 SCRA 710. 174

Yared v. Tiongco, supra. 175

Garcia v. Court of Appeals, 184 Phil. 358, 365 (1980) citing Bass v. De la Rama, 73 Phil. 682, 685

(1942). 176

Mahinay v. Gako, GR No. 15338, Nov. 28, 2011, citing Yu v. Court of Appeals, 321 Phil. 897, 901-903

(1995).

28

Registration Decree includes an innocent lessee, mortgagee, or other encumbrancer for

value.177 But unlike private individuals, banks are expected to exercise greater care and

prudence in their dealings, including those involving registered lands. A banking

institution is expected to exercise due diligence before entering into a mortgage

contract.178

In St. Dominic Corporation v. Intermediate Appellate Court,179 the Court, held

that where a Torrens title was issued as a result of regular land registration proceedings

and was in the name of the mortgagor when given as a security for a bank loan, the

subsequent declaration of said title as null and void is not a ground for nullifying the

mortgage rights of the bank which had acted in good faith.

In Mahinay v. Gako,180 the Court ruled that when a mortgagee relies upon what

appears on the face of a Torrens title and lends money in all good faith on the basis of the

title in the name of the mortgagor, only thereafter to learn that the latter's title was

defective, being thus an innocent mortgagee for value, his or her right or lien upon the

land mortgaged must be respected and protected.181

In Blanco v. Esquierdo,182 it was held that the right or lien of an innocent

mortgagee for value upon the land mortgaged must be respected and protected, even if

the mortgagor obtained his title thereto thru fraud. In this case, upon a complaint filed by

the legal heirs of Maximiano, the trial court ordered the cancellation of TCT No. T-6582

for having been secured through fraud, and also the cancellation of DBP’s mortgage. The

only question is whether the bank is an innocent purchaser for value. The Court answered

in the affirmative. The bank was not a party to the fraud. The certificate of title was in the

name of Fructuosa at the time of the mortgage. Hence, the bank had the right to rely on

what appeared in the certificate and was under no obligation to look beyond the

certificate and investigate. The remedy of the persons prejudiced is to bring an action for

damages against those who caused the fraud, and if the latter are insolvent, an action may

be filed for recovery of damages against the Assurance Fund.

RULE ON DOUBLE SALE OF

IMMOVABLE PROPERTY

Article 1544 of the Civil Code reads:

“ART. 1544. If the same thing should have been sold to different vendees,

the ownership shall be transferred to the person who may have first taken

possession thereof in good faith, if it should be movable property.

177

Crisostomo v. Court of Appeals, supra. 178

PNB v. Jumanoy, GR No. 169901, Aug. 3, 2011. 179

GR No. 70623, June 30, 1987, 151 SCRA 577. 180

Supra. 181

Id., citing Penullar v. Philippine National Bank, 205 Phil. 127, 135-136 (1983), citing Director of Lands

v. Abache, 73 Phil. 606 (1942) and Blanco v. Esquierdo, 110 Phil. 494 (1960). 182

GR No. L-15182,Dec. 29, 1960, 110 Phil. 494.

29

Should it be immovable property, the ownership shall belong to the person

acquiring it who in good faith first recorded it in the Registry of Property.

Should there be no inscription, the ownership shall pertain to the person

who in good faith was first in possession; and, in the absence thereof, to the

person who presents the oldest title, provided there is good faith.’’

Between two buyers of the same immovable property registered under the Torrens

system, the law gives ownership priority to: (a) the first registrant in good faith; (b) then,

the first possessor in good faith; and (c) finally, the buyer who in good faith presents the

oldest title. This provision, however, does not apply if the property is not registered under

the Torrens system.183

Based on this provision, the overriding consideration to determine

ownership of an immovable property is the good or bad faith not of the seller, but of the

buyer; specifically, to determine who first registered the sale with the Registry of

Property (Registry of Deeds) in good faith.184

As against the registered owners and the

holder of an unregistered deed of sale, it is the former who has a better right to possess.185

In Remalante v. Tibe,186 the Court ruled that the civil law provision on double sale

is not applicable where there is only one valid sale, the previous sale having been found

to be fraudulent.

Likewise, in Espiritu and Espiritu v. Valerio,187 where the same parcel of land

was purportedly sold to two different parties, the Court held that despite the fact that one

deed of sale was registered ahead of the other, Art. 1544 of the Civil Code will not apply

where said deed is found to be a forgery, the result of this being that the right of the other

vendee should prevail.188 The rule that where two certificates purport to include the same

land, the earlier in date prevails, is valid only absent any anomaly or irregularity tainting

the process of registration.189 On the other hand, while the execution of a public

instrument shall be equivalent to the delivery of the object of the contract, it only gives

rise to a prima facie presumption of delivery. It is deemed negated by the failure of the

vendee to take actual possession of the land sold.190

Moreover, it is an established principle that no one can give what one does not

have — nemo dat quod non habet. Accordingly, one can sell only what one owns or is

authorized to sell, and the buyer can acquire no more than what the seller can transfer

legally. In a number of cases, an action for reconveyance has been treated as an action to

quiet title.191

183

Abrigo v. De Vera, GR No. 154409, June 21, 2004, 432 SCRA 544. 184

Cabigas v. Limbaco, GR No. 175291, July 27, 2011 185

Catindig v. De Meneses, GR No. 165851, Feb.2, 2011. 186

GR No. L-59514, February 25, 1988, 158 SCRA 138. 187

GR No. L-18018, Dec 26, 1963, 119 Phil. 69. 188

Fudot v. Cattleya Land, Inc., GR No. 171008, Sept. 13, 2007, 533 SCRA 350. 189

Mathay v. Court of Appeals, GR No. 15788, Sept. 17, 1988, 295 SCRA 556. 190

Beatingo v. Gasis, GR No. 179641, Feb. 9, 2011. 191

Ney v. Quijano, GR No. 178609, Aug. 4, 2010, and cases cited therein.

30

PRESUMPTION OF CONJUGAL

OWNERSHIP

In Dewara v. Lamela,192 the subject property was acquired by spouses Elenita and

Eduardo during their marriage, before the enactment of the Family Code. The issue is

whether the property is the paraphernal/exclusive property of Elenita or the conjugal

property of spouses Elenita and Eduardo, and whether the same may be subject to levy

and execution sale to answer for the civil liability adjudged against Eduardo in a criminal

case for serious physical injuries. Held:

All property of the marriage is presumed to belong to the conjugal partnership,

unless it be proved that it pertains exclusively to the husband or to the wife.193

Registration in the name of the husband or the wife alone does not destroy this

presumption.194

The separation-in-fact between the husband and the wife without judicial

approval shall not affect the conjugal partnership. The lot retains its conjugal nature.195

23

Moreover, the presumption of conjugal ownership applies even when the manner in

which the property was acquired does not appear. The use of the conjugal funds is not an

essential requirement for the presumption to arise. However, it does not necessarily

follow that it may automatically be levied upon in an execution to answer for debts,

obligations, fines, or indemnities of one of the spouses. Before debts and obligations may

be charged against the conjugal partnership, it must be shown that the same were

contracted for, or the debts and obligations should have redounded to, the benefit of the

conjugal partnership. Fines and pecuniary indemnities imposed upon the husband or the

wife, as a rule, may not be charged to the partnership. However, if the spouse who is

bound should have no exclusive property or if the property should be insufficient, the

fines and indemnities may be enforced upon the partnership assets only after the

responsibilities enumerated in Article 161 of the Civil Code have been covered.

In Ros v. PNB,196 the subject property was acquired in 1968 during Ros and

Aguete's marriage. Ros mortgaged the property in 1974. Is the debt chargeable to the

conjugal partnership? Held:

The husband cannot alienate or encumber any conjugal real property without the

consent, express or implied, of the wife. Should the husband do so, then the contract is

voidable.197

Article 173 of the Civil Code allows Aguete to question Ros' encumbrance of

the subject property. However, the same article does not guarantee that the courts will

declare the annulment of the contract. Annulment will be declared only upon a finding

that the wife did not give her consent. In the present case, we follow the conclusion of the

appellate court and rule that Aguete gave her consent to Ros' encumbrance of the subject

property. Debts contracted by the husband for and in the exercise of the industry or

profession by which he contributes to the support of the family cannot be deemed to be

his exclusive and private debts. For this reason, we rule that Ros' loan from PNB

192

GR No. 179010, April 11, 2011. 193

CIVIL CODE, Art. 160; Villanueva v. Chiong, G.R. No. 159889, June 5, 2008, 554 SCRA 197, 203. 194

Bucoy v. Paulino, et al., 131 Phil. 790, 800 (1968). 195

CIVIL CODE, Art. 178; Villanueva v. Chiong, supra, at 202. 196

GR No. 170166, April 6, 2011. 197

Vera-Cruz v. Calderon, G.R. No. 160748, 14 July 2004, 434 SCRA 534 citing Heirs of Ignacia Aguilar-

Reyes v. Spouses Mijares, G.R. No. 143826, 28 August 2000, 410 SCRA 97.

31

redounded to the benefit of the conjugal partnership. Hence, the debt is chargeable to the

conjugal partnership.

FORGED DEED MAY BE THE ROOT

OF A VALID TITLE

Generally, a forged or fraudulent deed is a nullity and conveys no title.198

But a

fraudulent or forged document of sale may become the root of a valid title if the

certificate of title has already been transferred from the name of the true owner to the

name of the forger or the name indicated by the forger, and while it remained that way,

the land was subsequently sold to an innocent purchaser.199

CERTIFICATE OF TITLE

A certificate of title is conclusive of ownership. It enjoys the presumption of

validity. Registration does not vest title: It is not a mode of acquiring ownership.200

It

does not give any person any better title than what he lawfully has.201

Registration is

merely a system of registration of titles to lands.202

A certificate of title is an indefeasible

title and is conclusive as to the ownership of the registrant,203

the identity of the land,204

and its location.205

As against the registered owners and the holder of an unregistered deed

of sale, it is the former who has a better right to possess.206

While certificates of title are indefeasible, unassailable and binding against the

whole world, including the government itself, they do not create or vest title. They

merely confirm or record title already existing and vested. They cannot be used to protect

a usurper from the true owner, nor can they be used as a shield for the commission of

fraud; neither do they permit one to enrich himself at the expense of other.207

If two certificates of title purport to include the same land, whether wholly or

partly, the better approach is to trace the original certificates from which the certificates

of title were derived. Should there be only one common original certificate of title, the

198

Sec. 53, PD No. 1529. 199

Muñoz v. Yabut, GR No. 142676, June 6, 2011; Solivel v. Francisco, GR No. 51450, Feb. 10, 1989, 170

SCRA 218; Duran v. Intermediate Appellate Court, GR No. L-64159, Sept. 10, 1985, 138 SCRA 489;

Director of Lands v. Addison, GR No. 23148, March 25, 1926, 49 Phil. 19. 200

Dela Cruz v. Court of Appeals, 298 SCRA 172; Cabrera v. Court of Appeals, 267 SCRA 339; Avila v.

Tapucar, 201 SCRA 148. 201

Legarda v. Saleeby, 31 Phil. 590. Duque-Rosario v. Banco Filipino Savings and Mortgage Bank, GR

No. 140528, Dec. 7, 2011. 202

Garcia v. Court of Appeals, 312 SCRA 180; Republic v. Court of Appeals, 301 SCRA 366. 203

Tan v. Bantegui, GR No. 154027, Oct. 24, 2005. 204

Demasiado v. Velasco, 71 SCRA 105. 205

Odsigue v. Court of Appeals, 233 SCRA 626. 206

Catindig v. De Meneses, GR No. 165851, Feb.2, 2011. 207

Sta. Lucia Realty v. City of Pasig, GR No. 166838, June 15, 2011, citing De Pedro v. Romasan

Development Corporation, 492 Phil. 643 (2005).

32

transfer certificate issued on an earlier date along the line must prevail, absent any

anomaly or irregularity tainting the process of registration.208

An original certificate of title issued by virtue of administrative proceeding is as

indefeasible as a certificate of title issued under judicial proceedings. However, the

indefeasibility of title does not attach to titles secured by fraud and misrepresentation.209

One who deals with property registered under the Torrens system need not go

beyond the certificate of title, but only has to rely on the certificate of title.210

He is

charged with notice only of such burdens and claims as are annotated on the title.211

CONVEYANCE AND OTHER DEALINGS

BY REGISTERED OWNER

The general rule in dealing with registered land is set forth in Section 51 of P.D.

No. 1529:

Section 51. Conveyance and other dealings by registered owner. — An

owner of registered land may convey, mortgage, lease, charge or otherwise deal with the

same in accordance with existing laws. He may use such forms of deeds, mortgages,

leases or other voluntary instruments as are sufficient in law. But no deed, mortgage,

lease, or other voluntary instrument, except a will purporting to convey or affect

registered land shall take effect as a conveyance or bind the land, but shall operate only

as a contract between the parties and as evidence of authority to the Register of Deeds to

make registration.

The act of registration shall be the operative act to convey or affect the land

insofar as third persons are concerned, and in all cases under this Decree, the registration

shall be made in the office of the Register of Deeds for the province or city where the

land lies.

No voluntary instrument shall be registered by the Register of Deeds, unless the

owner's duplicate certificate is presented with such instrument, except in cases expressly

provided for in the law (PD 1529) or upon order of the court, for cause shown.212

208

Top Management Programs Corp. v. Fajardo, GR No.150462, June 15, 2011, citing Degollacion v.

Register of Deeds of Cavite, G.R. No. 161433, August 29, 2006, 500 SCRA 108, 115 and Mathay v. Court of

Appeals, G.R. No. 115788, September 17, 1998, 295 SCRA 556. 209

Sampaco v. Lantud, GR No. 163551, July 18, 2011. 210

Sec. 44, PD 1529; Casimiro Development Corporation v. Mateo, GR No. 175485, July 27, 2011;

Sandoval v. Court of Appeals, G.R. No. 106657, August 1, 1996, 260 SCRA 283; Santos v. Court of

Appeals, G.R. No. 90380, September 13, 1990, 189 SCRA 550; Unchuan v. Court of Appeals, G.R. No. L-

78775, May 31, 1988, 161 SCRA 710; Bailon-Casilao v. Court of Appeals, G.R. No. L-78178, April 15,

1988, 160 SCRA 738; Director of Lands v. Abad, 61 Phil. 479, 487 (1935); Quimson v. Suarez, 45 Phil.

901, 906 (1924). 211

Agricultural and Home Extension Development Group v. Court of Appeals, G.R. No. 92310, September

3, 1992, 213 SCRA 563; Unchuan v. Court of Appeals, supra. 212

Sec. 53, PD 1529.

33

From the standpoint of third parties, a property registered under the Torrens

system remains, for all legal purposes, the property of the person in whose name it is

registered, notwithstanding the execution of any deed of conveyance, unless the

corresponding deed is registered.213

Simply put, if a sale is not registered, it is binding

only between the seller and the buyer, but it does not affect innocent third persons.214

DISTINCTION BETWEEN VOLUNTARY

AND INVOLUNTARY REGISTRATION

As a rule, the order of entries in the Primary Entry Book determines the priority in

registration.215

In voluntary registration, such as a sale, mortgage, lease and the like, if the

owner's duplicate certificate be not surrendered and presented or if no payment of

registration fees be made within fifteen (15) days, entry in the day book of the deed of

sale does not operate to convey and affect the land sold. In involuntary registration, such

as an attachment, levy upon execution, lis pendens and the like, entry thereof in the day

book is a sufficient notice to all persons of such adverse claim.216

AMENDMENT OR ALTERATION

OF CERTIFICATES

The proceeding for the amendment and alteration of a certificate of title under

Section 108 of P.D. No. 1529 is applicable in seven instances or situations, namely: (a)

when registered interests of any description, whether vested, contingent, expectant, or

inchoate, have terminated and ceased; (b) when new interests have arisen or been created

which do not appear upon the certificate; (c) when any error, omission or mistake was

made in entering a certificate or any memorandum thereon or on any duplicate certificate;

(d) when the name of any person on the certificate has been changed; (e) when the

registered owner has been married, or, registered as married, the marriage has been

terminated and no right or interest of heirs or creditors will thereby be affected; (f) when

a corporation, which owned registered land and has been dissolved, has not conveyed the

same within three years after its dissolution; and (g) when there is reasonable ground for

the amendment or alteration of title.217

While Section 108, among other things, authorizes a person in interest to ask the

court for any erasure, alteration, or amendment of a certificate of title or of any

memorandum appearing therein, the prevailing rule is that proceedings thereunder are

summary in nature, contemplating corrections or insertions of mistakes which are only

clerical but certainly not controversial issues.218

Relief under the said legal provision can

213

Narciso Peña, supra note 38, at 189. 214

Bulaong v. Gonzales, GR No. 156318, Sept. 5, 2011. 215

Id. 216

Bulaong v Gonzales, supra. 217

Paz v. Republic, GR No. 157367, Nov. 23, 2011. 218

Heirs of Miguel Franco v. CA, 463 Phil. 417, 431-432 (2003).

34

only be granted if there is unanimity among the parties, or that there is no adverse claim

or serious objection on the part of any party in interest.219

The court has no authority to reopen the judgment or decree of registration, and

that nothing shall be done or ordered by the court which shall impair the title or other

interest of a purchaser holding a certificate for value in good faith, or his heirs and

assigns without his or their written consent.220

REGISTERED LAND NOT SUBJECT

TO PRESCRIPTION

No title to registered land in derogation of the title of the registered owner shall be

acquired by prescription or adverse possession.221

Thus, the right to recover possession of

registered land is imprescriptible because possession is a mere consequence of

ownership.222

Prescription is unavailing not only against the titled owner but also against

his heirs.223

But ownership may be lost through laches224

which is failure or neglect to

assert a right for an unreasonable length of time.225

CERTIFICATE NOT SUBJECT

TO COLLATERAL ATTACK

A certificate of title is not subject to collateral attack. It cannot be altered,

modified, or cancelled except in a direct proceeding.226

Thus, in a complaint for recovery

of possession, defendant cannot raise in the action the validity of plaintiff’s title.227

There

must be a direct attack on the title via a separate action; but a direct attack may be made

in a counterclaim or third-party complaint.228

What cannot be collaterally attacked is the certificate of title and not the title

itself.229

The certificate referred to is that document issued by the Register of Deeds

known as the TCT. In contrast, the title referred to by law means ownership which is,

more often than not, represented by that document.230

The prohibition against collateral

219

Philippine Veterans Bank v. Valenzuela, GR No. 163530, March 9, 2011;Tagaytay-Taal Tourist

Development Corporation v. CA, 339 Phil. 377, 389 (1997). 220

Id. 221

Sec. 47, PD No. 1529. 222

Fernando v. Acuna, GR No. 161030, Sept. 14, 2011, citing Umbay v. Alecha, 220 Phil. 103, 107 (1985). 223

Barcelona v. Barcelona, 100 Phil. 251; Guinoo v. Court of Appeals, 97 Phil. 235. 224

Fernando v. Acuna, supra, citing cases. See also Lucas v. Gamponia, 100 Phil. 277. 225

Cabrera v. Court of Appeals, 267 SCRA 339. 226

Sec. 48, PD No. 1529; Tapuroc v. Loquellano, GR No. 152007, Jan. 22, 2007. 227

Gaiterio v. Almeria, GR No. 181812, June 8, 2011; Ybañez v. Intermediate Appellate Court, 194 SCRA

743. 228

Leyson v. Bontuyan, GR No. 156357, Feb. 18, 2005; Sampaco v. Lantud, GR No. 163551, July 18,

2011. 229

Lee Tek Sheng v. Court of Appeals, G.R. No. 115402, July 15, 1998, 292 SCRA 544, 547. 230

Lacbayan v. Samoy, GR No. 165427, March 21, 2011.

35

attack does not apply to spurious or non-existent titles, since such titles do not enjoy

indefeasibility.231

REPLACEMENT OF LOST OR

DESTROYED CERTIFICATE

Section 109, PD No. 1529, governs the procedure for the replacement of a lost or

destroyed owner’s duplicate certificate of title. Where the owner’s duplicate copy is not

in fact lost or destroyed, a petition for the purpose is unwarranted as the court has no

jurisdiction over the petition.232

RECONSTITUTION OF LOST OR

DESTROYED CERTIFICATE

The reconstitution of a certificate of title denotes restoration in the original form

and condition of a lost or destroyed instrument attesting the title of a person to a piece of

land. The purpose of the reconstitution of title is to have, after observing the procedures

prescribed by law, the title reproduced in exactly the same way it has been when the loss

or destruction occurred.233

The lost or destroyed document referred to is the one that is in

the custody of the Register of Deeds. When reconstitution is ordered, this document is

replaced with a new one — the reconstituted title — that basically reproduces the

original. After the reconstitution, the owner is issued a duplicate copy of the reconstituted

title.234

Reconstitution denotes restoration of the certificate of title allegedly lost or

destroyed in its original form and conditions: it does not pass upon the question of

ownership.235

For an order of reconstitution to issue, the following elements must be

present:

(1) the certificate of title has been lost or destroyed;

(2) the petitioner is the registered owner or has an interest therein; and

(3) the certificate of title is in force at the time it was lost or destroyed.236

Reconstitution is governed by RA No. 26 in relation to Section 110 of PD No.

1529. Administrative reconstitution is also governed by RA No, 26, as amended by RA

No. 6732, dated July 17, 1989. Section 12 of R.A. No. 26 describes the requirements for

a petition for reconstitution while Section 13 prescribes the requirements for a notice of

231

(Oliveros v. San Miguel Corporation, GR No. 173531, Feb. 1, 2012.

232

Camitan vs. Court of Appeals, GR No. 128099, Dec. 20, 2006. 233

Republic v. Tuastumban, G.R. No. 173210, April 24, 2009, 586 SCRA 600, 614. 234

Republic v. Vergel de Dios, GR No. 170459, Feb. 9, 2011. 235

Republic v. Santua, GR No. 155703, Sept. 8, 2008; Layos v. Fil-Estate Golf and Development

Corporation, GR No. 150470, Aug. 6, 2008; Pinote vs. Dulay, 187 SCRA 12. 236

Layos v. Fil-Estate Golf and Development Corporation, GR No. 150470, Aug. 6, 2008.

36

hearing of the petition. Non-compliance with the requirements deprives the court of

jurisdiction over the petition for reconstitution.237

The requirements of Sections 2 and 3, RA No. 26 are almost identical. The

enumerated requirements are documents from official sources which recognize the

ownership of the owner and his predecessors-in-interest. The phrase “any other

document” in paragraph (f) of Sections 2 and 3 refers to documents similar to those

enumerated.238

As held in Castillo v. Republic,239

liberal construction of the Rules of Court does

not apply to land registration cases.240

Indeed, to further underscore the mandatory

character of these jurisdictional requirements, the Rules of Court do not apply to land

registration cases.241

In all cases where the authority of the courts to proceed is conferred

by a statute, and when the manner of obtaining jurisdiction is prescribed by a statute, the

mode of proceeding is mandatory, and must be strictly complied with, or the proceeding

will be utterly void.242

Courts have no jurisdiction over petitions for reconstitution of allegedly lost or

destroyed titles over lands that are already covered by duly issued subsisting titles in

the names of their duly registered owners.243

The absence of opposition from government agencies is of no controlling

significance because the State cannot be estopped by the omission, mistake or error of its

officials or agents, hence, the Republic is not barred from assailing the decision granting

the petition for reconstitution if the same has no merit.244

ADVERSE CLAIM

An adverse claim is registered by filing with the Register of Deeds a sworn

petition starting the basis of the right claimed.245

The duty of the Register of Deeds to

record the same on the title of ministerial.246

The notice of adverse claim is to apprise

third person that there is controversy over the ownership of the land, such that any

transaction regarding the land is subject to the outcome of the dispute.247

The annotation

of an adverse claim over registered land under Section 70 of Presidential Decree 1529248

237

Castillo v. Republic, GR No. 182980, June 22, 2011. 238

Republic v. Lagramada, GR No. 150741, June 12, 2008; Republic v. Santua, supra.; 239

Supra. 240

Section 6, Rule 1 of the 1997 Rules of Civil Procedure. 241

Section 4, Rule 1 of the 1997 Rules of Civil Procedure. 242

Caltex Filipino Managers & Supervisors Ass'n. v. CIR, 131 Phil. 1022, 1030 (1968). 243

Manotok v. Barque, GR No. 162335, Dec. 18, 2008. 244

Republic v. Lorenzo, GR No. 172338, Dec. 10, 2012. 245

Sec. 70, PD No. 1529. 246

Sajonas v. Court of Appeals, 258 SCRA 79. 247

Ching v. Enrile, GR No. 156076, Sept. 17, 2008; Arrazola v. Bernas, 86 SCRA 279; Duque-Rosario v.

Banco Filipino Savings and Mortgage Bank, GR No. 140528, Dec. 7, 2011. 248

Section 70 of Presidential Decree 1529 provides:

Section 70. Adverse claim. — Whoever claims any part or interest in registered land adverse to the

registered owner, arising subsequent to the date of the original registration, may, if no other provision is

37

requires a claim on the title of the disputed land. The existence of an easement of

subjacent and lateral support need not be annotated at the back of the title of the servient

estate.249

An adverse claim is not ipso facto cancelled upon the lapse of the thirty days from

its registration. There must be a petition for the purpose to afford the adverse claimant an

opportunity to be heard.250

Parties with liens annotated on the certificate of title are entitled to notice in an

action for cancellation of their liens.251

NOTICE OF LIS PENDENS

A notice of lis pendens is an announcement to the whole world that a particular

real property is in litigation, serving as a warning that one who acquires an interest over

said property does so at his own risk, or that he gambles on the result of the litigation

over the said property.252

The title obtained by the transferee pendente lite affords him no

special protection; he cannot invoke the rights of a purchaser in good faith and cannot

acquire better rights than those of his predecessor-in-interest.253

Thus, one who buys land

where there is a pending notice of lis pendens cannot invoke the right of a purchaser in

good faith; neither can he have acquired better rights than those of his predecessor in

interest.254

made in this Decree for registering the same, make a statement in writing setting forth fully his alleged

right or interest, and how or under whom acquired, a reference to the number of the certificate of title of the

registered owner, the name of the registered owner, and a description of the land in which the right or

interest is claimed.

The statement shall be signed and sworn to, and shall state the adverse claimant's residence, and a

place at which all notices may be served upon him. This statement shall be entitled to registration as an

adverse claim on the certificate of title. The adverse claim shall be effective for a period of thirty days from

the date of registration. After the lapse of said period, the annotation of adverse claim may be canceled

upon filing of a verified petition therefor by the party in interest: Provided, however, that after cancellation,

no second adverse claim based on the same ground shall be registered by the same claimant.

Before the lapse of thirty days aforesaid, any party in interest may file a petition in the Court of

First Instance where the land is situated for the cancellation of the adverse claim, and the court shall grant a

speedy hearing upon the question of the validity of such adverse claim, and shall render judgment as may

be just and equitable. If the adverse claim is adjudged to be invalid, the registration thereof shall be ordered

canceled. If, in any case, the court, after notice and hearing, shall find that the adverse claim thus registered

was frivolous, it may fine the claimant in an amount not less than one thousand pesos nor more than five

thousand pesos, in its discretion. Before the lapse of thirty days, the claimant may withdraw his adverse

claim by filing with the Register of Deeds a sworn petition to that effect. 249

Castro v. Monsod, GR No. 183719, Feb. 2, 2011. 250

Sajonas vs. Court of Appeals, supra; see also Duque-Rosario v. Banco Filipino Savings and Mortgage

Bank, GR No. 140528, Dec. 7, 2011 251

Crisologo v. Omelio, GR No. A.M. No. RTJ-12-2321, Oct. 3, 2012. 252

Dela Merced v. GSIS, GR No. 167140, Nov. 23, 2011. 253

Yu v. Court of Appeals, 321 Phil. 897, 901-902 (1995). 254

Yu v. Court of Appeals, G.R. No. 109078, December 25, 1995, 251 SCRA 509, 513-514, citing

Constantino v. Espiritu, No. L-23268, June 30, 1972, 45 SCRA 557, 563 and Tanchoco v. Aquino, No. L-

30670, September 15, 1987, 154 SCRA 1, 15; see Philippine National Bank v. Court of Appeals, No. L-

34404, June 25, 1980, 98 SCRA 207, 232.

38

A notice of lis pendens should contain (1) a statement of the institution of the

action or proceeding; (2) the court where the same is pending; (3) the date of its

institution; (4) a reference to the number of the certificate of title; and (5) an adequate

description of the land affected and its registered owner.255

The notice is not a lien or

encumbrance on the property, but simply a notice to prospective buyers or to those

dealing with the property that it is under litigation.256

The litigation must involve the title

to, or the use or occupation of, a specific property. It does not apply where the object of

the suit is money judgment, or proceedings for the probate of will or administration of the

estate of a deceased person, levy on execution or preliminary attachments.257

A notice of

lis pendens subjects the interest of the transferee to the results of the pending suit.

CONSULTA

It is the ministerial duty of the Register of Deeds to register documents presented

to him for registration. (Sec. 10, PD No. 1529). If the Register of Deeds is in doubt as to

the registrability of the document, the remedy is to elevate the matter to the LRA via en

consulta. The same procedure may be availed of by the interested party.258

Appeal from

the LRA decision may be taken to the Court of Appeals.259

MORTGAGES AND LEASES

The requisites of a mortgage are: (a) it is constituted to secure the fulfillment of a

principal obligation; (b) the mortgagor is the absolute owner of the property, and (c) the

mortgagor has the free disposal thereof.

Under Article 2085 of the Civil Code, one of the essential requisites of the

contract of mortgage is that the mortgagor should be the absolute owner of the property

to be mortgaged; otherwise, the mortgage is considered null and void. However, an

exception to this rule is the doctrine of "mortgagee in good faith." Under this doctrine,

even if the mortgagor is not the owner of the mortgaged property, the mortgage contract

and any foreclosure sale arising therefrom are given effect by reason of public policy.

This principle is based on the rule that all persons dealing with property covered by a

Torrens certificate of title, as buyers or mortgagees, are not required to go beyond what

appears on the face of the title. This is the same rule that underlies the principle of

"innocent purchasers for value." Hence, even if the mortgagor is not the rightful owner

of, or does not have a valid title to, the mortgaged property, the mortgagee in good faith

is, nonetheless, entitled to protection.260

255

Sec. 76, PD No. 1529. 256

Republic v. Ravelo, GR No. 165114, Aug. 6, 2008. 257

Biglang-awa vs. Constantino, 109 Phil. 168. 258

Almirol vs. Register of Deeds of Agusan, 22 SCRA 1152. 259 Calalang vs. Register of Deeds of Quezon City, 231 SCRA 88. 260

Duque-Rosario v. Banco Filipino Savings and Mortgage Bank, GR No. 140528, Dec. 7, 2011.

39

A mortgage lien is a right in rem which follows the property – whoever its owner

may be. If the mortgagor sells the property, the buyer must respect the mortgage, if

registered, or if he knows of its existence.261

The phrase “innocent purchaser for value”

includes an innocent lessee, mortgagee or other encumbrancer for value.262

The

subsequent nullification of the mortgagor’s title will not nullify the mortgage.263

HIGHER STANDARD OF CARE REQUIRED

OF BANKING OR FINANCIAL INSTITUTIONS

The general rule that a mortgagee need not look beyond the title does not apply to

banks and other financial institutions as greater care and due diligence is required of

them.264

Imbued with public interest, they "are expected to be more cautious than

ordinary individuals."265

In a case,266

the Court adjudged that unlike private individuals, a bank is expected

to exercise greater care and prudence in its dealings, including those involving registered

lands. A banking institution is expected to exercise due diligence before entering into a

mortgage contract. The ascertainment of the status or condition of a property offered to it

as security for a loan must be a standard and indispensable part of its operations.267

FORECLOSURE OF MORTAGE

When the principal obligation becomes due and the debtor fails to perform his

obligation, the creditor may foreclose on the mortgage for the purpose of alienating the

(mortgaged) property to satisfy his credit.268

The procedure for extrajudicial foreclosure of real estate mortgage is governed by

Act No. 3135, as amended by Act No. 4118. The purchaser at the public auction sale of

an extrajudicially foreclosed real property may seek possession thereof in accordance

with Section 7 of said Act.269

Unlike in an ordinary sale, inadequacy of the price at a forced sale is immaterial

and does not nullify the sale. It is also not required that the bid should at least be equal to

the market value of the foreclosed property or the outstanding obligation of the mortgage

debtor.270

If "the proceeds of the sale are insufficient to cover the debt in an extrajudicial

261

Ligon v. Court of Appeals, 244 SCRA 693. 262

Unchuan v. Court of Appeals, 161 SCRA 710. 263

Gonzales v. Intermediate Appellate Court, 157 SCRA 587; Blanco v. Esquierdo, 110 Phil. 494; Penullar

v. Philippine National Bank, 120 SCRA 171. 264

Metropolitan Bank and Trust Co., v. Pascual, G.R. No. 163744, February 29, 2008, 547 SCRA 246, 261. 265

Alano v. Planter’s Development Bank, GR No. 171628, June 13, 2011. Philippine National Bank v.

Corpuz, G.R. No. 180945, February 12, 2010, 612 SCRA 493, 496; Gonzales v. Intermediate Appellate

Court, 157 SCRA 187. 266

Cruz v. Bancom Finance Corporation, 429 Phil. 225, 239 (2002). 267

Duque-Rosario v. Banco Filipino Savings and Mortgage Bank, supra. 268

Development Bank of the Philippines v. Doyon, GR No. 167238, March 25, 2009. 269

China Banking Corporation v. Lozada, GR No. 164919, July 4, 2008. 270

BPI Family Savings Bank, Inc. v. Avenido, GR No. 175816, Dec. 7, 2011.

40

foreclosure of mortgage, the mortgagee is entitled to claim the deficiency from the

debtor.271

Where the mortgagee is a banking institution, the determination of the

redemption price for the foreclosed property is governed by Section 78 of the General

Banking Act. There must be an unequivocal tender of payment for the full amount of the

repurchase price.272

The only instance when this rule may be construed liberally, i.e.,

allow the non-simultaneous tender of payment, is if a judicial action is instituted by the

redemptioner.273

GUIDELINES ON FORECLOSURE

A.M. No. 99-10-05-0, February 20, 2007

The resolution embodies the additional guidelines intended to aid courts in

foreclosure proceedings, specifically limiting the instances, and citing the conditions,

when a writ against foreclosure of a mortgage may be issued, to wit:

(1) No temporary restraining order or writ of preliminary injunction against

the extrajudicial foreclosure of real estate mortgage shall be issued on the allegation that

the loan secured by the mortgage has been paid or is not delinquent unless the application

is verified and supported by evidence of payment.

(2) No temporary restraining order or writ of preliminary injunction against

the extrajudicial foreclosure of real estate mortgage shall be issued on the allegation that

the interest on the loan is unconscionable, unless the debtor pays the mortgagee at least

twelve percent per annum interest on the principal obligation as stated in the application

for foreclosure sale, which shall be updated monthly while the case is pending.

(3) Where a writ of preliminary injunction has been issued against a

foreclosure of mortgage, the disposition of the case shall be speedily resolved. To this

end, the court concerned shall submit to the Supreme Court, through the Office of the

Court Administrator, quarterly reports on the progress of the cases involving ten million

pesos and above.

(4) All requirements and restrictions prescribed for the issuance of a

temporary restraining order/writ of preliminary injunction, such as the posting of a bond,

which shall be equal to the amount of the outstanding debt, and the time limitation for its

effectivity, shall apply as well to a status quo order.

REDEMPTION AND CONSOLIDATION

OF OWNERSHIP

271

Id. 272

Allied Banking Corporation v. Mateo, GR No. 167420, June 5, 2009; Quisumbing v. PNB, GR No.

178242, Jan. 20, 2009. 273

Quisumbing v. PNB, supra.

41

If the foreclosed property is registered, the mortgagor has one year within which

to redeem the property from and after registration of sale with the Register of Deeds.274

After the expiration of the period of redemption, the purchaser at the foreclosure sale or

anyone claiming under him may petition the court for the entry of a new certificate to

him. But before the entry of a new certificate of title, the registered owner may pursue all

legal and equitable remedies to impeach or annul such proceedings.275

The rule on redemption is liberally construed in favor of the original owner of the

property. The policy of the law is to aid rather than to defeat him in the exercise of his

right of redemption. The general rule in redemption is that it is not sufficient that a person

offering to redeem manifests his desire to do so. The statement of intention must be

accompanied by an actual and simultaneous tender of payment. The redemption price

should either be fully offered in legal tender or else validly consigned in court.276

Upon the expiration of the redemption period of one year from the registration of

the sale, the right of the purchaser to the possession of the foreclosed property becomes

absolute.277

He is entitled to possession following the consolidation of ownership in his

name.278

The writ of possession becomes a matter of right and its issuance to a purchaser

in an extrajudicial foreclosure is merely a ministerial function.279

The trial court has no

discretion on this matter."280

May persons to whom several mortgaged lands were transferred without the

knowledge and consent of the creditor redeem only several parcels if all the lands were

sold together for a single price at the foreclosure sale? In several early cases decided by

the Court, the right of the mortgagor or redemptioner to redeem one or some of the

foreclosed properties was recognized.281

ISSUANCE OF WRIT OF POSSESSION

MINISTERIAL

Under Sec. 7 of Act No. 3135, a writ of possession may be issued either (a) within

the one-year period, upon the filing of a bond, or (b) after the lapse of the redemption

period, without need of a bond.282

The proceeding for the issuance of the writ is ex parte and is ministerial duty of

274

Union Bank of the Philippines v. Court of Appeals, 370 Phil. 837, 847 (1999); BPI Family Savings

Bank, Inc. v. Avenido, GR No. 175816, Dec. 7, 2011. 275

Sec. 75, PD 1529; Reyes v. Tang Soat Ing, GR No. 185620, Dec. 14, 2011 276

Duque-Rosario v. Banco Filipino Savings and Mortgage Bank, GR No. 140528, Dec. 7, 2011. 277

Philippine National Bank v. Gotesco, GR No. 183211, June 5, 2009. 278

Edralin v. Philippine Veterans Bank, GR No. 168523, March 9, 2011; Bank of the Philippine Islands v.

Tarampi, GR No. 174988, Dec. 10, 2008. 279

Duque-Rosario v. Banco Filipino Savings and Mortgage Bank, supra. 280

Metropolitan Bank and Trust Co. v. Bance, G.R. No. 167280, April 30, 2008, 553 SCRA 507, 515-516.

Emphasis supplied. 281

Yap v. Dy, GR No. 171868, July 27, 2011. 282

Philippine National Bank v. Sanao Marketing Corporation, 465 SCRA 287.

42

the court,283

unless a third party is actually holding the property adversely to the

judgment debtor,284

or where the bid price is unjustifiably higher than the real amount of

the obligation.285

The issuance of the writ may not be stayed by a pending action for

annulment of the mortgage or the foreclosure itself, without prejudice, of course, to the

eventual outcome of the pending annulment case.286

The order of the RTC granting the petition for a writ of possession is final which

can only be questioned on appeal.287

PUBLIC LAND ACT;

GENERAL PRINCIPLES

Regalian doctrine – all lands and all other natural resources are owned by the State

No public land can be acquired by private persons without any grant, express or

implied from the government. It is indispensable that there be a showing of a title

from the State.

Only those lands shall be declared open to disposition or concession which have been officially delimited and classified and, when practicable, surveyed, and

which have not been reserved for public or quasi-public uses, nor appropriated by

the government, nor in any manner become private property.

Land remains unclassified land until it is released therefrom and rendered open to disposition.

The classification of public lands is a function of the executive branch of government.

For purposes of their administration and disposition, lands of the public domain

which are alienable or open to disposition may be further classified as: (a)

agricultural, (b) residential, commercial, industrial, or for similar productive

purposes, (c) educational, charitable, or other similar purposes, and (d)

reservations for townsites and for public and quasi-public uses.

MODES OF DISPOSITION

1. For homestead settlement;

283

Sueno v. Land Bank of the Philippines, GR No. 174711, Sept. 17, 2008. 284

Glapuno v. Gapultos, 132 SCRA 429; China Banking Corporation v. Lozada, supra. 285

Sulit v. Court of Appeals, 268 SCRA 441. 286

.Bank of the Philippine Islands v. Tarampi, GR No. 174988, Dec. 10, 2008. 287

San Fernando Rural Bank, Inc. v. Pampanga Omnibus Development Corporation, GR No. 168088, April

4, 2007.

43

2. By sale;

3. By lease

4. By confirmation of imperfect or incomplete title

(a) By judicial legalization

(b) By administrative legalization (free patent)

Homestead - any citizen of the Philippines over the age of eighteen years, or the

head of a family, may enter a homestead of not exceeding twelve hectares of

agricultural land of the public domain. The applicant must have cultivated and

improved at least one-fifth of the land continuously since the approval of the

application and resided for at least one year in the municipality in which the land

is located.

When a homesteader has complied with all the terms and conditions which entitle him to a patent for a tract of public land, he acquires a vested interest

therein, and is to be regarded as the equitable owner thereof.

The execution and delivery of the patent, after the right to a particular parcel

of land has become complete, are the mere ministerial acts of the officer charged with that duty.

Free patent - Any natural-born citizen of the Philippines who is not the owner of

more than 12 hectares and who, for at least 30 years, has continuously occupied

and cultivated, by himself or through his predecessors-in-interest a tract of

agricultural public land, and who shall have paid the real estate tax thereon shall

be entitled to have a free patent issued to him for such tract of land not to exceed

twelve 12 hectares.

RA No. 10023, dated March 9, 2010, authorizes issuance of free patent titles

to zoned residential lands. Residence requirement: 10 years.

Requirements:

Survey plan and technical description

Affidavit of two 2 persons who are residents of the barangay that the applicant has actually resided on, and actually possessed and occupied, the land applied

for, under a bona fide claim of ownership, for at least 10 years, and has

complied with the other requirements prescribed by the Act.

Sales patent - Any citizen of the Philippines of lawful age or the head of a family

may purchase any tract of public agricultural land not to exceed twelve hectares

which shall be sold thru sealed bidding. The land shall be awarded to the highest

bidder, but the applicant may equal the highest bid.

44

The purchaser shall have not less than one-fifth of the land cultivated within five years from the date of the award, and pays the full purchase price.

Direct sale - RA No. 730 permits the direct sale of public lands for residential

purposes to qualified applicants.

The applicant must: (a) be a Filipino citizen of legal age; (b) not the owner of a

home lot in the municipality or city in which he resides; (c) have established in

good faith his residence on a parcel of public land which is not needed for public

service; and (d) have constructed his house and actually resided therein.

TITLE INDEFEASIBLE

A certificate of title issued pursuant to a public land patent partakes of the nature of a certificate of title issued through judicial proceeding. It becomes

incontrovertible upon the expiration of one year from the date of the order for

issuance of the patent, hence, prescription cannot operate against the registered

owner.

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

issued pursuant thereto are a nullity.288

The aggrieved party may initiate an action

for cancellation of such title.289

CONTINUING AUTHORITY

TO INVESTIGATE

But the Regional Director has continuing authority to conduct an investigation to determine whether or not fraud attended the issuance of the patent.

The Solicitor General may bring an action for cancellation of title obtained

through fraud and for the reversion of the land to the State.

Action is not barred by prescription.

PROHIBITED ALIENATIONS

Homestead - may not be sold or encumbered within 5 years from the issuance of the patent, and for a term of 20 years thereafter without the consent of the DENR

Secretary.

Land covered by a Free paent – may not be sold within 5 years from the issuance

of the patent.

288

Agne v. Director of Lands, G.R. Nos. 40399 & 72255, February 6, 1990, 181 SCRA 793, 803. 289

Pabaus v. Yutiamco, GR No. 164356, July 27, 2011

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Prohibition against alienation is mandatory.

Policy of the law:

To conserve the land which a grantee has acquired under the Public Land Act for

him and his heirs as a reward for his labor in cleaning and cultivating it

To give the patentee a place where to live with his family so he may become a happy citizen and useful member of society

EFFECT OF A VOID CONVEYANCE

It shall produce the effect of annulling and cancelling the title and cause the reversion of the property and improvements to the State.

REPURCHASE

Every conveyance of land acquired under the free patent or homestead provisions, when proper, shall be subject to repurchase by the applicant, his widow, or legal

heirs, within a period of five years from the date of the conveyance.

The five-year period of redemption of homestead sold at extrajudicial foreclosure

runs after the expiration of the one-year period of repurchase allowed in an

extrajudicial foreclosure.

Query: Where the patentee sold the land during the prohibited period, may he recover the property from the vendee? Yes, consistent the with the fundamental

policy to afford the patentee a piece of land for his home and cultivation.

(Binayug v. Ugaddan, GR No. 181623, Dec. 5, 2012)

SUBDIVISION AND CONDOMINIUM

BUYER’S DECREE (PD 957)

Subdivision project - a registered parcel of land registered partitioned for residential purposes into individual lots and offered to the public for sale, in cash

or in installment terms. It shall include all residential, commercial, industrial and

recreational areas as well as open spaces and other community and public areas in

the project.

Condominium unit - a part of the condominium project intended for any type of

independent use or ownership, including one or more rooms or spaces located in

one or more floors (or part of parts of floors) in a building or buildings and such

accessories as may be appended thereto.

Developer - the person who develops or improves the subdivision project or condominium project for and in behalf of the owner thereof.

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JURISDICTION OF THE HLURB

Unsound real estate business practices;

Claims involving refund and any other claims filed by subdivision lot

condominium unit buyer against the project owner, developer, dealer, broker

or salesman; and

Cases involving specific performance of contractual and statutory obligations filed by buyers of subdivision lot or condominium unit against the owner,

developer, dealer, broker or salesman.

HLURB has jurisdiction over cases for collection of unpaid installments and claims for damages.

No jurisdiction over cases filed by subdivision owners or developers against lot or unit buyers

Court, not HLURB, has jurisdiction over issues involving ownership or

possession of property.

SUMMARY OF CASES WHERE

HLURB HAS JURISDICTION

For a determination of the rights of the parties under a contract to sell a subdivision lot;

For the delivery of title against the subdivision owner;

For the refund of reservation fees for the purchase of a subdivision lot;

For specific performance filed by a lot buyer against the seller of a subdivision lot;

For the annulment of the mortgage constituted by the project owner without the buyer’s consent, the mortgage foreclosure sale, and the condominium certificate

of title issued to the highest bidder at the said foreclosure sale;

For the collection of the balance of the unpaid purchase price of a subdivision lot filed by the developer of a subdivision against the lot buyer; and

For incidental claims for damages.

LICENSE TO SELL

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The owner or dealer must have a license to sell the project within two weeks from the registration of such project.

However, the absence of a license to sell the subdivision lots does not render the

sale thereof void. The absence of the license to sell only subjects the

condominium developer and its officers civilly and criminally liable.

EXEMPT TRANSACTIONS

Sale of a subdivision lot resulting from the partition of land among co-owners and co-heirs.

Sale or transfer of a subdivision lot by the original purchaser and any subsequent sale of the same lot.

Sale of a subdivision lot or a condominium unit by or for the account of a mortgagee in the ordinary course of business when necessary to liquidate a bona

fide debt.

FOREIGNERS MAY PURCHASE

Under RA No. 4726, foreign nationals can own Philippine real estate through the

purchase of condominium units or townhouses up to not more than 40% of the

total and outstanding capital stock of a Filipino-owned or controlled corporation.

The land is owned by the condominium corporation and the unit owner is simply a member in this condominium corporation.

DEALERS AND BROKERS

No real estate dealer, broker or salesman shall engage in the business of selling subdivision lots or condominium units unless he has registered himself with the

Board.

Applicant must be of good repute and has complied with the applicable rules of

the Authority

REGISTRATION

All contracts to sell, deeds of sale and other similar instruments relative to the sale or conveyance of the subdivision lots and condominium units, whether or not the

purchase price is paid in full, shall be registered in the Office of the Register of

Deeds of the province or city where the property is situated.

MORTGAGES

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No mortgage on any unit or lot shall be made by the owner or developer without prior written approval of the Board. Such approval shall not be granted unless it is

shown that the proceeds of the mortgage loan shall be used for the development of

the condominium or subdivision project and effective measures have been

provided to ensure such utilization.

The mortgage of a subdivision lot or a condominium unit is void if executed by a

property developer without the prior written approval of the HLURB. That an

encumbrance has been constituted over an entire property, of which the subject lot

or unit is merely a part, does not affect the invalidity of the lien over the specific

portion at issue. The fact that the lot had no separate TCT did not make it less of a

"subdivision lot" entitled to the protection of PD 957.290

“The circumstance that DBP and ADC executed the mortgage contract prior to the selling of the subdivided portions of the property to Capulong is immaterial

considering that when DBP granted the loan to ADC, it already knew that the loan

was to be used for realty development. DBP should have considered that it was

dealing with a property subject of a real estate development project. x x x DBP

cannot be deemed to be an innocent mortgagee.”291

The essence of the government's socialized housing program is to preserve the beneficiary's ownerships for a reasonable length of time, at least within five years

from the time he acquired it free from any encumbrance.292

ADVERTISEMENTS

Advertisements by the owner or developer must not mislead or deceive the public.

A subdivision owner was held in breach when it failed to deliver a “closed-circuit

TV monitor through which residents from their apartments can see their guests”

as advertised. (BPI v. ALS Management, GR No. 151821, April 14, 2004)

TIME OF COMPLETION

Petitioner may be held liable in damages for any delay in the construction.

A request for extension of time to complete development of a subdivision or condominium project may be granted only where non-completion of the project is

caused by fortuitous events or legal ordersand with written notice to lot or unit

buyers.

DESISTANCE OR NON-PAYMENT OF AMORTIZATIONS

290

Far East Bank and Trust Co, v, Marquez, GR No. 147964, April 14, 2004. 291

DBP v. Capulong, GR No. 181790, Jan. 30, 2009. 292

Lalicon v. NHA, GR No. 185440, July 13, 2011.

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Buyer need not give prior notice before desisting from further paying amortizations.

Buyer may not be ousted for non-payment due to the failure of the subdivision

owner to put up the required improvements.

Failure to develop a subdivision may justify non-payment of amortizations by a lot buyer.

Failure of seller to deliver the condominium unit entitles buyer to cancel contract.

THE MACEDA LAW

Buyer is entitled to the following rights in case he defaults in the payment of succeeding installments:

Grace Period –– to pay, without additional interest, the unpaid installments

due within the total grace period earned by him which is fixed at the rate

of one month grace period for every year of installment payments made:

Provided, That this right shall be exercised by the buyer only once in

every five years of the life of the contract and its extensions, if any; and

Refund of “Cash Surrender Value” — if the contract is cancelled, the seller shall refund to the buyer the cash surrender value of the payments

on the property equivalent to fifty percent of the total payments made and,

after five years of installments, an additional five percent every year but

not to exceed ninety per cent of the total payments made; Provided, That

the actual cancellation of the contract shall take place after thirty days

from receipt by the buyer of the notice of cancellation or the demand for

rescission of the contract by a notarial act and upon full payment of the

cash surrender value to the buyer.

ISSUANCE OF TITLE

The owner or developer shall deliver the title of the lot or unit to the buyer upon full payment of the lot or unit.

Even with a valid mortgage over the lot, the seller is still bound to redeem said

mortgage without any cost to the buyer apart from the balance of the purchase

price and registration fees.

ROADS, ALLEYS, OPEN SPACES

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The owner as developer of a subdivision shall provide adequate roads, alleys and sidewalks, and for subdivision projects one hectare or more, reserve 30% of the

gross area for open space exclusively for parks, playgrounds and recreational use.

These areas shall be non-alienable public lands, and non-buildable.

The roads, alleys, sidewalks and playgrounds shall be donated by the owner or developer to the city or municipality and it shall be mandatory for the local

government to accept; provided, however, that the parks and playgrounds may be

donated to the Homeowners Association of the project with the consent of the city

or municipality concerned.

VISITORIAL POWERS

The Board, through its duly authorized representative may, at any time, make an examination into the business affairs, administration, and condition of any person,

corporation, partnership, cooperative, or association engaged in the business of

selling subdivision lots and condominium units.

It may deputize the Philippine Constabulary or any law enforcement agency in the execution of its final orders, rulings or decisions.

TAKEOVER DEVELOPMENT

The Board may take over or cause the development and completion of the

subdivision or condominium project at the expenses of the owner or developer

who has refused or failed to develop or complete the development of the project.

It may demand, collect and receive from the buyers the installment payments due on the lots for the development of the subdivision.

ADMINISTRATIVE FINES

The Board may prescribe and impose fines not exceeding ten thousand pesos for violations of the provisions of the Decree or of any rule or regulation thereunder.

Fines shall be payable to the Board and enforceable through writs of execution in

accordance with the provisions of the Rules of Court.

HLURB is without jurisdiction to determine criminal liability.

JUSTICE OSWALDO D. AGCAOILI

Philippine Judicial Academy

Supreme Court 552-9636, 922-0232, 0920-9506384

Email: [email protected]

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Reference:

AGCAOILI, “Property Registration Decree and Related Laws (Land Titles and

Deeds)” 2011 ed., (with a foreword by Chief justice Reynato S. Puno), cited by the

Supreme Court as “one of the recognized textbooks on property registration” in Eland

Philippines Inc. v. Garcia, GR No. 173289, Feb. 17, 2010. See also: Agcaoili, “Law on

Natural Resources and Environmental Law Developments” (with a Foreword by

Juastice Adolfo S. Azcuna, Chancellor, Philippine Judicial Academy, Supreme

Court), and “Reviewer in Property Registration and Related Laws (With Sample

MCQs and Suggested Answers) – Published by REX Book Store, Inc.