NIETO V. QUINES (1961)

G.R. No. L-14634 January 28, 1961

ARTURO NIETO, plaintiff-appellant,
vs.
BARTOLOME QUINES and MIGUEL P. PIO, defendants-appellees.

Justiniano P. Cortez for plaintiff-appellant.
Miguel P. Pio for defendants-appellees.

GUTIERREZ DAVID, J.:

Sometime in 1917, Bartolome Quines filed with the Bureau of Lands a homestead application covering a tract of land situated in the municipality of Abulug, province of Cagayan. Upon the approval of his application in the following year, he began clearing and cultivating the land.

In the years 1923 to 1925, cadastral surveys were made by the Bureau of Lands in the municipality of Abulug, during which the tract of land applied for as a homestead by Bartolome Quines was designated as Lot No. 3044 of the Abulug Cadastre. After the surveys were completed, cadastral proceedings were initiated in 1927 by the Director of Lands in the Court of First Instance of Cagayan. Relying upon the assurances made by the employees of the Bureau of Lands that they would take care of his homestead in the cadastral proceedings, Bartolome Quines did not file any answer therein. However, one Maria Florentino filed an answer claiming several lots including Lot No. 3044. After hearing, the cadastral court, on August 16, 1930, rendered its decision wherein Maria Florentino was awarded the lots claimed by her. Lot No. 3044 was included in the award, apparently because neither the Director of Lands nor any of his representatives appeared during the hearing to inform the court that it was under homestead application. On August 29, 1930, pending the issuance of the final decree of registration and the original certificate of title to Maria Florentino, a homestead patent covering Lot No. 3044 was granted to Bartolome Quines, and pursuant thereto, the Register of Deeds of Cagayan, on September 15, 1930, issued Original Certificate of Title No. 623 in his name. Six months thereafter, or on March 12, 1931, the same Register of Deeds issued Original Certificate of Title No. 11982 in the name of Maria Florentino covering the lots awarded to her by the cadastral court including Lot No. 3044.

Sometime in 1952, Maria Florentino, with the consent of her husband Jose Villanueva, sold all the lots covered by Original Certificate of Title No. 11982 to Arturo Nieto, who subsequently secured the issuance of Transfer Certificate of Title No. 1402 in his name on January 21, 1953.

On other hand, Bartolome Quines executed a deed of sale on December 23, 1953 transferring Lot No. 3044 as covered by Original Certificate of Title issued in his name to Atty. Miguel P. Pio. Discovering that the land he purchased was covered by another title in the name of Arturo Nieto, Atty. Pio, on January 8, 1954, filed an action against the latter in the Court of First Instance of Cagayan for quieting of title. The lower court, however, upon defendant's motion, dismissed the action on the ground that the plaintiff had not yet acquired a legal title that could affect third persons, the sale not having approved by the Secretary of Agriculture and Natural Resources and the deed not being registered in the office of the Register of Deeds.

Prior to the dismissal of the action to quiet title above mentioned, or on January 16, 1954, Arturo Nieto, the defendant therein, filed a complaint against Bartolome Quines in, the Court of First Instance of Cagayan. The complaint alleging, among other things, that the homestead patent and Original Certificate of Title No. 623 were obtained through fraud and misrepresentations, prayed that the patent and title be cancelled and that Transfer Certificate of Title No. 1402 issued in plaintiff's name be declared as the true and valid title over the lot in dispute. It was likewise alleged that defendant Quines was not in possession of Lot No. 3044, but of certain portions of other lots belonging to plaintiff, and should, therefore, be ordered to vacate the same. Defendant Bartolome Quines, through his counsel Atty. Miguel P. Pio, answered the complaint denying its material allegations.

During the pendency of the action, the sale of Lot No. 3044 to Miguel P. Pio was approved by the Secretary of Agriculture and Natural Resources and was later registered in the office of the Register of Deeds of Cagayan who issued Transfer Certificate of Title No. 1994 in the name of Miguel P. Pio. Accordingly, Miguel P. Pio filed a motion for his inclusion as party defendant. His motion having been granted, defendant Miguel P. Pio answered the complaint denying the material allegations thereof and interposing a counterclaim for damages.

After trial, the lower court rendered judgment in defendants' favor dismissing the complaint, ordering the cancellation of Original Certificate of Title No. 11982 and Transfer Certificate of Title No. 1402 insofar as they cover Lot No. 3044, and sentencing the plaintiff to pay the defendants P6,000 representing the owner's share in the harvest from the years 1954 to 1957. His two motions for reconsideration having been denied, plaintiff Arturo Nieto appealed directly to this Court.

The appeal is without merit.

As established during the trial and found by the trial court, Bartolome Quines had been in the continuous and peaceful possession of Lot No. 3044 from the time his homestead application was approved in 1918 up to 1953 when he was forcibly ejected therefrom by Arturo Nieto. As a homestead applicant, he religiously complied with all the requirements of the Public Land Act and, on August 29, 1930, a homestead patent was issued in his favor. Considering the requirement that the final proof must be presented within 5 years from the approval of the homestead application (sec. 14, Public Land Act), it is safe to assume that Bartolome Quines submitted his final proof way back yet in 1923 and that the Director of Lands approved the same not long thereafter or before the land became the subject of the cadastral proceedings in 1927. Unfortunately, there was some delay in the ministerial act of issuing the patent and the same was actually issued only after the cadastral court had adjudicated the land to Maria Florentino. Nevertheless, having complied with all the terms and conditions which would entitle him to a patent, Bartolome Quines, even without a patent actually issued, has unquestionably acquired a vested right on the land and is to be regarded as the equitable owner thereof. (Balboa vs. Farrales, 51 Phil. 498). Under these circumstances and applying by analogy the principles governing sales of immovable property to two different persons by the same vendor, Bartolome Quines' title must prevail over that of Maria Florentino not only because he had always been in possession of the land but also because he obtained title to the land prior to that of Maria Florentino.

Having arrived at the above conclusions, we deem it idle to consider the other points raised in this appeal.

IN VIEW OF THE FOREGOING, the decision appealed from is hereby affirmed. With costs against appellant.

Bengzon, Padilla, Bautista Angelo, Labrador and Paredes JJ., concur.
Reyes, J.B.L., J., concurs in the result.
Concepcion and Barrera, JJ., reserve their votes.

SAPTO V. FABIANA (1958)

EN BANC

G.R. No. L-11285 May 16, 1958

VICENTE SAPTO, LAUREANA SAPTO and DORA (BAGONA), plaintiffs-appellants,
vs.
APOLONIO FABIANA, defendant-appellee.

Rodolfo A. Ta-Asan for appellants.
Napoleon B. Nidea for appellee.

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

Sapto (Moro), now deceased was the registered owner of a parcel of land located in Alambre, Toril, Davao City, under Transfer Certificate of Title No. T-5701 (0-28) of the Register of Deeds of Davao City. When Sapto died, he left his children Samuel, Constancio, and Ramon as heirs of the property in question. Ramon pre-deceased his two brothers, leaving no, other heirs. On June 6, 1931, Samuel and Constancio Sapto executed a deed of sale of a portion of four hectares of the land aforementioned if favor of defendant Apolonio Fabiana, in consideration of the amount of P245.00. The sale was duly approved by the Provincial Governor of Davao, but was never registered. Possession of the land conveyed was, however, transferred to Fabiana and the latter has been in the possession thereof 1931 up to the present.

Thereafter, Constancio Sapto died without any issue, Samuel Sapto married one Dora (Bagoba) and upon his death was survived by his widow and two children, Laureana and Vicente Sapto. On October 19, 1954, the widow and children of Samuel Sapto filed this action in the Court of First Instance of Davao for the recovery of the parcel of land sold by their predecessors to defendant Apolonio Fabiana in 1931. After trial, the lower court held that although the sale between Samuel and Constancio Sapto and defendant in 1931 was never registered, it was valid and binding upon the parties and the vendors heirs, and ordered the plaintiffs to execute the necessary deed of conveyance in defendant's favor and its annotation in the certificate of title. From this judgment, plaintiffs appealed to this Court.

The issue is whether the deed of sale executed by appellants' predecessors in favor of the appellee over the land in question, although never registered, is valid and binding on appellants and operated to convey title and ownership to the appellee.

The question is not new. In a long line of cases already decided by this Court, we have consistently interpreted sec. 50 of the Land Registration Act providing that "no deed . . . 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 clerk or register of deeds to make registration" in the sense that as between the parties to a sale registration is not necessary to make it valid and effective, for actual notice is equivalent to registration (Obras Pias vs. Devera Ignacio, 17 Phil., 45; Gustilo vs. Maravilla, 48 Phil., 442; Quimson vs. Suarez, 45 Phil., 901; Winkleman vs. Veluz, 43 Phil., 609; Galasinao vs. Austria, 51 Off. Gaz. No. 6, 2874; Carillo vs. Salak, 91 Phil., 265). "The peculiar force of a title under Act No. 492", we said in Medina vs. Imaz and Warner Barnes and Co., 27 Phil., 314 (syllabus), "is exhibited only when the purchaser has sold to innocent third parties the land described in the conveyance. Generally speaking, as between vendor and vendee, the same rights and remedies exist in relation to land not so registered". In Galanza vs. Nuesa, 95 Phil., 713, we held that "registration is intended to protect the buyer against claims of third persons arising from subsequent alienations by the vendor, and is certainly not necessary to give effect as between the parties to their deed of sale". And in the recent case of Casica vs. Villaseca, G.R. No. L-9590, April 30, 1957, we reiterated that "the purpose of registration is merely to notify and protect the interests of strangers to a given transaction, who may be ignorant thereof, and the non-registration of the deed evidencing said transaction does not relieve the parties thereto of their obligations thereunder".

No right of innocent third persons or subsequent transferees of the property in question is involved herein. The property has remained and still is in the possession of the vendee of appellants' predecessors, herein appellee. It is, therefore, clear that the conveyance between appellee and his vendors and valid and binding upon the latter, and is equally binding and effective against the heirs of the vendors, herein appellants. To hold otherwise would make of the Torrens system a shield for the commission of fraud by the vendors or his heirs (Gustilo vs. Maravilla, 48 Phil., 442), who would then be able to reconvey the same property to other persons.

Appellants cite several cases wherein we have held that under the Torrens system, registration is the operative act that gives validity to the transfer or creates a lien upon the land. The authorities cited refer, however, to cases involving conflicting rights over registered property and those of innocent transferees who relied on the clean titles of the properties in question. These cases have, therefore, no bearing on the instant case, where the appellee has always, remained in the possession of the land in question and no subsequent transfer thereof to other persons has been made either by appellants or their prodecessors-in-interest.

The appellants aver that it was error to require them to execute a deed of conveyance in favor of the plaintiff, appellee, and argue that the latter's action to obtain it had long prescribed, twenty years having elapsed since the original sale. This contention must be overruled, being predicated on the assumption that the reconveyance is sought by way of performance of the contract of sale entered into in 1931. No enforcement of the contract is in fact needed, since the delivery of possession of the land sold had consummated the sale and transferred title to the purchaser, registration of the contract not being indispensable as between the parties. Actually the action for conveyance was one to quiet title, i.e., to remove the cloud cast upon appellee's ownership by the refusal of the appellants to recognize the sale made by their predecessors. This action accrued only when appellant, initiated their suit to recover the land in 1954. Furthermore, it is an established rule of American jurisprudence (made applicable in this jurisdiction by Art. 480 of the New Civil Code) that actions to quiet title to property in the possession of the plaintiff are imprescriptible (44 Am. Jur. p. 47; Cooper vs. Rhea, 39 L. R. A. 930; Inland Empire Land Co. vs. Grant County, 138 Wash. 439, 245 Pac. 14).

The prevailing rule is that the right of a plaintiff to have his title to land quieted, as against one who is asserting some adverse claim or lien thereon, is not barred while the plaintiff or his grantors remain in actual possession of the land, claiming to be owners thereof, the reason for this rule being that while the owner in fee continues liable to an action, proceeding, or suit upon the adverse claim, he has a continuing right to the aid of a court of equity to ascertain and determine the nature of such claim and its effect on his title, or to assert any superior equity in his favor. He may wait until his possession is disturbed or his title is attacked before taking steps to vindicate his right. But the rule that the statute of limitations is not available as a defense to an action to remove a cloud from title can only be invoked by a complaint when he is in possession. One who claims property which is in the possession of another must, it seems, invoke his remedy within the statutory period. (44 Am. Jur., p. 47)

Wherefore, the judgment appealed from is affirmed. Costs against appellants. So ordered.

Paras, C.J., Bengzon, Montemayor, Reyes, A., Bautista Angelo, Labrador, Concepcion, Endencia, and Felix, JJ., concur.

LEGARDA V. SALEEBY (1915)

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

CONSUELO LEGARDA, with her husband MAURO PRIETO, plaintiffs-appellants,
vs.
N.M. SALEEBY, defendant-appellee.

Singson, Ledesma and Lim for appellants.
D.R. Williams for appellee.

JOHNSON, J.:

From the record the following facts appear:

First. That the plaintiffs and the defendant occupy, as owners, adjoining lots in the district of Ermita in the city of Manila.

Second. That there exists and has existed a number of years a stone wall between the said lots. Said wall is located on the lot of the plaintiffs.

Third. That the plaintiffs, on the 2d day of March, 1906, presented a petition in the Court of Land Registration for the registration of their lot. After a consideration of said petition the court, on the 25th day of October, 1906, decreed that the title of the plaintiffs should be registered and issued to them the original certificate provided for under the torrens system. Said registration and certificate included the wall.

Fourth. Later the predecessor of the defendant presented a petition in the Court of Land Registration for the registration of the lot now occupied by him. On the 25th day of March, 1912, the court decreed the registration of said title and issued the original certificate provided for under the torrens system. The description of the lot given in the petition of the defendant also included said wall.

Fifth. Several months later (the 13th day of December, 1912) the plaintiffs discovered that the wall which had been included in the certificate granted to them had also been included in the certificate granted to the defendant .They immediately presented a petition in the Court of Land Registration for an adjustment and correction of the error committed by including said wall in the registered title of each of said parties. The lower court however, without notice to the defendant, denied said petition upon the theory that, during the pendency of the petition for the registration of the defendant's land, they failed to make any objection to the registration of said lot, including the wall, in the name of the defendant.

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

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

The decision of the lower court is based upon the theory that the action for the registration of the lot of the defendant was a judicial proceeding and that the judgment or decree was binding upon all parties who did not appear and oppose it. In other words, by reason of the fact that the plaintiffs had not opposed the registration of that part of the lot on which the wall was situate they had lost it, even though it had been theretofore registered in their name. Granting that theory to be correct one, and granting even that the wall and the land occupied by it, in fact, belonged to the defendant and his predecessors, then the same theory should be applied to the defendant himself. Applying that theory to him, he had already lost whatever right he had therein, by permitting the plaintiffs to have the same registered in their name, more than six years before. Having thus lost hid right, may he be permitted to regain it by simply including it in a petition for registration? The plaintiffs having secured the registration of their lot, including the wall, were they obliged to constantly be on the alert and to watch all the proceedings in the land court to see that some one else was not having all, or a portion of the same, registered? If that question is to be answered in the affirmative, then the whole scheme and purpose of the torrens system of land registration must fail. The real purpose of that system is to quiet title to land; to put a stop forever to any question of the legality of the title, except claims which were noted at the time of registration, in the certificate, or which may arise subsequent thereto. That being the purpose of the law, it would seem that once a title is registered the owner may rest secure, without the necessity of waiting in the portals of the court, or sitting in the "mirador de su casa," to avoid the possibility of losing his land. Of course, it can not be denied that the proceeding for the registration of land under the torrens system is judicial (Escueta vs. .Director of Lands, 16 Phil. Rep., 482). It is clothed with all the forms of an action and the result is final and binding upon all the world. It is an action in rem. (Escueta vs. Director of Lands (supra); Grey Alba vs. De la Cruz, 17 Phil. rep., 49 Roxas vs. Enriquez, 29 Phil. Rep., 31; Tyler vs. Judges, 175 Mass., 51 American Land Co. vs. Zeiss, 219 U.S., 47.)

While the proceeding is judicial, it involves more in its consequences than does an ordinary action. All the world are parties, including the government. After the registration is complete and final and there exists no fraud, there are no innocent third parties who may claim an interest. The rights of all the world are foreclosed by the decree of registration. The government itself assumes the burden of giving notice to all parties. To permit persons who are parties in the registration proceeding (and they are all the world) to again litigate the same questions, and to again cast doubt upon the validity of the registered title, would destroy the very purpose and intent of the law. The registration, under the torrens system, does not give the owner any better title than he had. If he does not already have a perfect title, he can not have it registered. Fee simple titles only may be registered. The certificate of registration accumulates in open document a precise and correct statement of the exact status of the fee held by its owner. The certificate, in the absence of fraud, is the evidence of title and shows exactly the real interest of its owner. The title once registered, with very few exceptions, should not thereafter be impugned, altered, changed, modified, enlarged, or diminished, except in some direct proceeding permitted by law. Otherwise all security in registered titles would be lost. A registered title can not be altered, modified, enlarged, or diminished in a collateral proceeding and not even by a direct proceeding, after the lapse of the period prescribed by law.

For the difficulty involved in the present case the Act (No. 496) providing for the registration of titles under the torrens system affords us no remedy. There is no provision in said Act giving the parties relief under conditions like the present. There is nothing in the Act which indicates who should be the owner of land which has been registered in the name of two different persons.

The rule, we think, is well settled that the decree ordering the registration of a particular parcel of land is a bar to future litigation over the same between the same parties .In view of the fact that all the world are parties, it must follow that future litigation over the title is forever barred; there can be no persons who are not parties to the action. This, we think, is the rule, except as to rights which are noted in the certificate or which arise subsequently, and with certain other exceptions which need not be dismissed at present. A title once registered can not be defeated, even by an adverse, open, and notorious possession. Registered title under the torrens system can not be defeated by prescription (section 46, Act No. 496). The title, once registered, is notice to the world. All persons must take notice. No one can plead ignorance of the registration.

The question, who is the owner of land registered in the name of two different persons, has been presented to the courts in other jurisdictions. In some jurisdictions, where the "torrens" system has been adopted, the difficulty has been settled by express statutory provision. In others it has been settled by the courts. Hogg, in his excellent discussion of the "Australian Torrens System," at page 823, says: "The general rule is that in the case of two certificates of title, purporting to include the same land, the earlier in date prevails, whether the land comprised in the latter certificate be wholly, or only in part, comprised in the earlier certificate. (Oelkers vs. Merry, 2 Q.S.C.R., 193; Miller vs. Davy, 7 N.Z.R., 155; Lloyd vs. Myfield, 7 A.L.T. (V.) 48; Stevens vs. Williams, 12 V.L. R., 152; Register of Titles, vs. Esperance Land Co., 1 W.A.R., 118.)" Hogg adds however that, "if it can be very clearly ascertained by the ordinary rules of construction relating to written documents, that the inclusion of the land in the certificate of title of prior date is a mistake, the mistake may be rectified by holding the latter of the two certificates of title to be conclusive." (See Hogg on the "Australian torrens System," supra, and cases cited. See also the excellent work of Niblack in his "Analysis of the Torrens System," page 99.) Niblack, in discussing the general question, said: "Where two certificates purport to include the same land the earlier in date prevails. ... In successive registrations, where more than one certificate is issued in respect of a particular estate or interest in land, the person claiming under the prior certificates is entitled to the estate or interest; and that person is deemed to hold under the prior certificate who is the holder of, or whose claim is derived directly or indirectly from the person who was the holder of the earliest certificate issued in respect thereof. While the acts in this country do not expressly cover the case of the issue of two certificates for the same land, they provide that a registered owner shall hold the title, and the effect of this undoubtedly is that where two certificates purport to include the same registered land, the holder of the earlier one continues to hold the title" (p. 237).

Section 38 of Act No. 496, provides that; "It (the decree of registration) shall be conclusive upon and against all persons, including the Insular Government and all the branches thereof, whether mentioned by name in the application, notice, or citation, or included in the general description "To all whom it may concern." Such decree shall not be opened by reason of the absence, infancy, or other disability of any person affected thereby, nor by any proceeding in any court for reversing judgments or decrees; subject, however, to the right of any person deprived of land or of any estate or interest therein by decree of registration obtained by fraud to file in the Court of Land Registration a petition for review within one year after entry of the decree (of registration), provided no innocent purchaser for value has acquired an interest.

It will be noted, from said section, that the "decree of registration" shall not be opened, for any reason, in any court, except for fraud, and not even for fraud, after the lapse of one year. If then the decree of registration can not be opened for any reason, except for fraud, in a direct proceeding for that purpose, may such decree be opened or set aside in a collateral proceeding by including a portion of the land in a subsequent certificate or decree of registration? We do not believe the law contemplated that a person could be deprived of his registered title in that way.

We have in this jurisdiction a general statutory provision which governs the right of the ownership of land when the same is registered in the ordinary registry in the name of two persons. Article 1473 of the Civil Code provides, among other things, that when one piece of real property had been sold to two different persons it shall belong to the person acquiring it, who first inscribes it in the registry. This rule, of course, presupposes that each of the vendees or purchasers has acquired title to the land. The real ownership in such a case depends upon priority of registration. While we do not now decide that the general provisions of the Civil Code are applicable to the Land Registration Act, even though we see no objection thereto, yet we think, in the absence of other express provisions, they should have a persuasive influence in adopting a rule for governing the effect of a double registration under said Act. Adopting the rule which we believe to be more in consonance with the purposes and the real intent of the torrens system, we are of the opinion and so decree that in case land has been registered under the Land Registration Act in the name of two different persons, the earlier in date shall prevail.

In reaching the above conclusion, we have not overlooked the forceful argument of the appellee. He says, among other things; "When Prieto et al. were served with notice of the application of Teus (the predecessor of the defendant) they became defendants in a proceeding wherein he, Teus, was seeking to foreclose their right, and that of orders, to the parcel of land described in his application. Through their failure to appear and contest his right thereto, and the subsequent entry of a default judgment against them, they became irrevocably bound by the decree adjudicating such land to Teus. They had their day in court and can not set up their own omission as ground for impugning the validity of a judgment duly entered by a court of competent jurisdiction. To decide otherwise would be to hold that lands with torrens titles are above the law and beyond the jurisdiction of the courts".

As was said above, the primary and fundamental purpose of the torrens system is to quiet title. If the holder of a certificate cannot rest secure in this registered title then the purpose of the law is defeated. If those dealing with registered land cannot rely upon the certificate, then nothing has been gained by the registration and the expense incurred thereby has been in vain. If the holder may lose a strip of his registered land by the method adopted in the present case, he may lose it all. Suppose within the six years which elapsed after the plaintiff had secured their title, they had mortgaged or sold their right, what would be the position or right of the mortgagee or vendee? That mistakes are bound to occur cannot be denied, and sometimes the damage done thereby is irreparable. It is the duty of the courts to adjust the rights of the parties under such circumstances so as to minimize such damages, taking into consideration al of the conditions and the diligence of the respective parties to avoid them. In the present case, the appellee was the first negligent (granting that he was the real owner, and if he was not the real owner he can not complain) in not opposing the registration in the name of the appellants. He was a party-defendant in an action for the registration of the lot in question, in the name of the appellants, in 1906. "Through his failure to appear and to oppose such registration, and the subsequent entry of a default judgment against him, he became irrevocably bound by the decree adjudicating such land to the appellants. He had his day in court and should not be permitted to set up his own omissions as the ground for impugning the validity of a judgment duly entered by a court of competent jurisdiction." Granting that he was the owner of the land upon which the wall is located, his failure to oppose the registration of the same in the name of the appellants, in the absence of fraud, forever closes his mouth against impugning the validity of that judgment. There is no more reason why the doctrine invoked by the appellee should be applied to the appellants than to him.

We have decided, in case of double registration under the Land Registration Act, that the owner of the earliest certificate is the owner of the land. That is the rule between original parties. May this rule be applied to successive vendees of the owners of such certificates? Suppose that one or the other of the parties, before the error is discovered, transfers his original certificate to an "innocent purchaser." The general rule is that the vendee of land has no greater right, title, or interest than his vendor; that he acquires the right which his vendor had, only. Under that rule the vendee of the earlier certificate would be the owner as against the vendee of the owner of the later certificate.

We find statutory provisions which, upon first reading, seem to cast some doubt upon the rule that the vendee acquires the interest of the vendor only. Sections 38, 55, and 112 of Act No. 496 indicate that the vendee may acquire rights and be protected against defenses which the vendor would not. Said sections speak of available rights in favor of third parties which are cut off by virtue of the sale of the land to an "innocent purchaser." That is to say, persons who had had a right or interest in land wrongfully included in an original certificate would be unable to enforce such rights against an "innocent purchaser," by virtue of the provisions of said sections. In the present case Teus had his land, including the wall, registered in his name. He subsequently sold the same to the appellee. Is the appellee an "innocent purchaser," as that phrase is used in said sections? May those who have been deprived of their land by reason of a mistake in the original certificate in favor of Teus be deprived of their right to the same, by virtue of the sale by him to the appellee? Suppose the appellants had sold their lot, including the wall, to an "innocent purchaser," would such purchaser be included in the phrase "innocent purchaser," as the same is used in said sections? Under these examples there would be two innocent purchasers of the same land, is said sections are to be applied .Which of the two innocent purchasers, if they are both to be regarded as innocent purchasers, should be protected under the provisions of said sections? These questions indicate the difficulty with which we are met in giving meaning and effect to the phrase "innocent purchaser," in said sections.

May the purchaser of land which has been included in a "second original certificate" ever be regarded as an "innocent purchaser," as against the rights or interest of the owner of the first original certificate, his heirs, assigns, or vendee? The first original certificate is recorded in the public registry. It is never issued until it is recorded. The record notice to all the world. All persons are charged with the knowledge of what it contains. All persons dealing with the land so recorded, or any portion of it, must be charged with notice of whatever it contains. The purchaser is charged with notice of every fact shown by the record and is presumed to know every fact which the record discloses .This rule is so well established that it is scarcely necessary to cite authorities in its support (Northwestern National Bank vs. Freeman, 171 U.S., 620, 629; Delvin on Real Estate, sections 710, 710 [a]).

When a conveyance has been properly recorded such record is constructive notice of its contents and all interests, legal and equitable, included therein. (Grandin vs. Anderson, 15 Ohio State, 286, 289; Orvis vs. Newell, 17 Conn., 97; Buchanan vs. Intentional Bank, 78 Ill., 500; Youngs vs. Wilson, 27 N.Y., 351; McCabe vs. Grey, 20 Cal., 509; Montefiore vs. Browne, 7 House of Lords Cases, 341.)

Under the rule of notice, it is presumed that the purchaser has examined every instrument of record affecting the title. Such presumption is irrebutable. He is charged with notice of every fact shown by the record and is presumed to know every fact which an examination of the record would have disclosed. This presumption cannot be overcome by proof of innocence or good faith. Otherwise the very purpose and object of the law requiring a record would be destroyed. Such presumption cannot be defeated by proof of want of knowledge of what the record contains any more than one may be permitted to show that he was ignorant of the provisions of the law. The rule that all persons must take notice of the facts which the public record contains is a rule of law. The rule must be absolute. Any variation would lead to endless confusion and useless litigation.

While there is no statutory provision in force here requiring that original deeds of conveyance of real property be recorded, yet there is a rule requiring mortgages to be recorded. (Arts. 1875 and 606 of the Civil Code.) The record of a mortgage is indispensable to its validity. (Art .1875.) In the face of that statute would the courts allow a mortgage to be valid which had not been recorded, upon the plea of ignorance of the statutory provision, when third parties were interested? May a purchaser of land, subsequent to the recorded mortgage, plead ignorance of its existence, and by reason of such ignorance have the land released from such lien? Could a purchaser of land, after the recorded mortgage, be relieved from the mortgage lien by the plea that he was a bona fide purchaser? May there be a bona fide purchaser of said land, bona fide in the sense that he had no knowledge of the existence of the mortgage? We believe the rule that all persons must take notice of what the public record contains in just as obligatory upon all persons as the rule that all men must know the law; that no one can plead ignorance of the law. The fact that all men know the law is contrary to the presumption. The conduct of men, at times, shows clearly that they do not know the law. The rule, however, is mandatory and obligatory, notwithstanding. It would be just as logical to allow the defense of ignorance of the existence and contents of a public record.

In view, therefore, of the foregoing rules of law, may the purchaser of land from the owner of the second original certificate be an "innocent purchaser," when a part or all of such land had theretofore been registered in the name of another, not the vendor? We are of the opinion that said sections 38, 55, and 112 should not be applied to such purchasers. We do not believe that the phrase "innocent purchaser should be applied to such a purchaser. He cannot be regarded as an "innocent purchaser" because of the facts contained in the record of the first original certificate. The rule should not be applied to the purchaser of a parcel of land the vendor of which is not the owner of the original certificate, or his successors. He, in nonsense, can be an "innocent purchaser" of the portion of the land included in another earlier original certificate. The rule of notice of what the record contains precludes the idea of innocence. By reason of the prior registry there cannot be an innocent purchaser of land included in a prior original certificate and in a name other than that of the vendor, or his successors. In order to minimize the difficulties we think this is the safe rule to establish. We believe the phrase "innocent purchaser," used in said sections, should be limited only to cases where unregistered land has been wrongfully included in a certificate under the torrens system. When land is once brought under the torrens system, the record of the original certificate and all subsequent transfers thereof is notice to all the world. That being the rule, could Teus even regarded as the holder in good fifth of that part of the land included in his certificate of the appellants? We think not. Suppose, for example, that Teus had never had his lot registered under the torrens system. Suppose he had sold his lot to the appellee and had included in his deed of transfer the very strip of land now in question. Could his vendee be regarded as an "innocent purchaser" of said strip? Would his vendee be an "innocent purchaser" of said strip? Certainly not. The record of the original certificate of the appellants precludes the possibility. Has the appellee gained any right by reason of the registration of the strip of land in the name of his vendor? Applying the rule of notice resulting from the record of the title of the appellants, the question must be answered in the negative. We are of the opinion that these rules are more in harmony with the purpose of Act No. 496 than the rule contended for by the appellee. We believe that the purchaser from the owner of the later certificate, and his successors, should be required to resort to his vendor for damages, in case of a mistake like the present, rather than to molest the holder of the first certificate who has been guilty of no negligence. The holder of the first original certificate and his successors should be permitted to rest secure in their title, against one who had acquired rights in conflict therewith and who had full and complete knowledge of their rights. The purchaser of land included in the second original certificate, by reason of the facts contained in the public record and the knowledge with which he is charged and by reason of his negligence, should suffer the loss, if any, resulting from such purchase, rather than he who has obtained the first certificate and who was innocent of any act of negligence.

The foregoing decision does not solve, nor pretend to solve, all the difficulties resulting from double registration under the torrens system and the subsequent transfer of the land. Neither do we now attempt to decide the effect of the former registration in the ordinary registry upon the registration under the torrens system. We are inclined to the view, without deciding it, that the record under the torrens system, supersede all other registries. If that view is correct then it will be sufficient, in dealing with land registered and recorded alone. Once land is registered and recorded under the torrens system, that record alone can be examined for the purpose of ascertaining the real status of the title to the land.

It would be seen to a just and equitable rule, when two persons have acquired equal rights in the same thing, to hold that the one who acquired it first and who has complied with all the requirements of the law should be protected.

In view of our conclusions, above stated, the judgment of the lower court should be and is hereby revoked. The record is hereby returned to the court now having and exercising the jurisdiction heretofore exercised by the land court, with direction to make such orders and decrees in the premises as may correct the error heretofore made in including the land in the second original certificate issued in favor of the predecessor of the appellee, as well as in all other duplicate certificates issued.

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

Arellano, C.J., Torrens, and Araullo, JJ., concur.

Separate Opinions

TRENT, J., dissenting:

I dissent.

In cases of double or overlapping registration, I am inclined to agree with the reasoning and authority on which it is held in the majority opinion (first) that the original holder of the prior certificate is entitled to the land as against the original holder of the later certificate, where there has been no transfer of title by either party to an innocent purchaser; both, as is shown in the majority opinion, being at fault in permitting the double registration to take place; (second) that an innocent purchaser claiming under the prior certificate is entitled to the land as against the original holder of the later certificate, and also as against innocent purchasers from the holder of the later certificate; the innocent purchaser being in no wise at fault in connection with the issuance of the later certificate.

But I am of opinion that neither the authorities cited, nor the reasoning of the majority opinion sustains the proposition that the original holder of the prior certificate is entitled to the land as against an innocent purchaser from the holder of the later certificate.

As to the text-book authorities cited in the majority opinion, it is sufficient to say that the rules laid down by both Hogg and Niblack are mere general rules, admittedly subject to exception, and of course of no binding force or authority where the reasoning upon which these rules are based is applicable to the facts developed in a particular case.

In its last analysis the general rule laid down in the majority opinion rests upon the proposition set forth in the last page of the opinion wherein it is said that "it would seem to be a just and equitable rule, when two persons have acquired equal rights in the same thing, to hold that the one who acquired it first and who has complied with all the requirements of the law should be protected." The rule, as applied to the matter in hand, may be stated as follows: It would seem to be a just and equitable rule when two persons have acquired separate and independent registered titles to the same land, under the Land Registration Act, to hold that the one who first acquired registered title and who has complied with all the requirements of the law in that regard should be protected, in the absence of any express statutory provision to the contrary.

Thus stated I have no quarrel with the doctrine as a statement of the general rule to be applied in cases of double or overlapping registration under the Land Registration Act; for it is true as stated in the majority opinion that in the adjudication and registration of titles by the Courts of Land Registration "mistakes are bound to occur, and sometimes the damage done thereby is irreparable;" and that in the absence of statutory provisions covering such cases, "it is the duty of the courts to adjust the rights of the parties, under such circumstances, so as to minimize such damages, taking into consideration all of the conditions, and the diligence of the respective parties to avoid them."

But like most such general rules, it has its exceptions and should not be applied in a case wherein the reasons on which it is based do not exist, or in cases wherein still more forceful reasons demand the application of a contrary rule.

The general rule relied upon in the majority opinion is a mere application of a well settled equity rule that: "Where conflicting equities are otherwise equal in merit, that which first occurred will be given the preference." But it is universally laid down by all the courts which have had occasion to apply this equity rule that "it should be the last test resorted to," and that "it never prevails when any other equitable ground for preference exists." (See 19 Cent. Dig., tit. Equity, par. 181; and may cases cited in 16 Cyc., 139, note 57.) It follows that the general rules, that in cases of double or overlapping registration the earlier certificate should be protected, ought not to prevail so as to deprive an innocent purchaser under the later certificate of his title of the earlier certificate contributed to the issuance of the later certificate. Hence the holder of the earlier certificate of title should not be heard to invoke the "just and equitable rule" as laid down in the majority opinion, in order to have his own title protected and the title of an innocent purchaser of a later certificate cancelled or annulled, in any case wherein it appears that the holder of the later certificate was wholly without fault, while the holder of the issuance of the later certificate, in that he might have prevented its issuance by merely entering his appearance in court in response to lawful summons personally served upon him in the course of the proceedings for the issuance of the second certificate, and pleading his superior rights under the earlier certificate, instead of keeping silent and by his silence permitting a default judgment to be entered against him adjudicating title in favor of the second applicant.

The majority opinion clearly recognizes the soundness of the principles I am contending for by reasoning (with which I am inclined to agree) whereby it undertakes to demonstrate that as between the original holders of the double or overlapping registration the general rule should prevail, because both such original parties must held to have been fault and, their equities being equal, preference should be given to the earlier title.

The majority opinion further recognizes the soundness of my contention by the reasoning whereby it undertakes to sustain the application of the general rule in favor of the original holder of the earlier certificate against purchasers from the original holder of the later certificate, by an attempt to demonstrate that such purchasers can in no event be held to be innocent purchasers; because, as it is said, negligence may and should always be imputed to such a purchaser, so that in no event can he claim to be without fault when it appears that the lands purchased by him from the holder of a duly registered certificate of title are included within the bounds of the lands described in a certificate of title of an earlier date.

At considerable length the majority opinion (in reliance upon the general rule laid down under the various systems of land registration, other than those based on the torrens system) insists that a purchaser of land land duly registered in the Land Registration Court, is charged with notice of the contents of each and every one of the thousands and tens of thousands of certificates of registry on file in the land registry office, so that negligence may be imputed to him if he does not ascertain that all or any part of the land purchased by him is included within the boundary lines of any one of the thousands or tens of thousands of tracts of land whose original registry bears an earlier date than the date of the original registry of the land purchased by him. It is contended that he cannot claim to be without fault should he buy such land because, as it is said, it was possible for him to discover that the land purchased by him had been made the subject of double or overlapping registration by a comparison of the description and boundary lines of the thousands of tracts and parcels of land to be found in the land registry office.

But such ruling goes far to defeat one of the principal objects sought to be attained by the introduction and adoption of the so-called torrens system for the registration of land. The avowed intent of that system of land registration is to relieve the purchase of registered lands from the necessity of looking farther than the certificate of title of the vendor in order that he may rest secure as to the validity of the title to the lands conveyed to him. And yet it is said in the majority opinion that he is charged with notice of the contents of every other certificate of title in the office of the registrar so that his failure to acquaint himself with its contents may be imputed to him as negligence.

If the rule announced in the majority opinion is to prevail, the new system of land registration, instead of making transfers of real estate simple, expenditious and secure, and instead of avoiding the necessity for expensive and oftimes uncertain searches of the land record and registries, in order to ascertain the true condition of the title before purchase, will, in many instances, add to the labor, expense and uncertainty of any attempt by a purchaser to satisfy himself as to the validity of the title to lands purchased by him.

As I have said before, one of the principal objects, if not the principal object, of the torrens system of land registration upon which our Land Registration Act is avowedly modelled is to facilitate the transfer of real estate. To that end the Legislature undertakes to relieve prospective purchasers and all others dealing in registered lands from the necessity of looking farther than the certificate of title to such lands furnished by the Court of Land Registration, and I cannot, therefore, give my consent to a ruling which charges a purchaser or mortgage of registered lands with notice of the contents of every other certificate of title in the land registry, so that negligence and fault may be imputed to him should he be exposed to loss or damages as a result of the lack of such knowledge.

Suppose a prospective purchaser of lands registered under the Land Registration Act desires to avoid the imputation of negligence in the event that, unknown to him, such lands have been made the subject of double or overlapping registration, what course should he pursue? What measures should he adopt in order to search out the information with notice of which he is charged? There are no indexes to guide him nor is there anything in the record or the certificate of title of the land he proposes to buy which necessarily or even with reasonable probability will furnish him a clue as to the fact of the existence of such double or overlapping registration. Indeed the only course open to him, if he desires to assure himself against the possibility of double or overlapping registration, would even seem to be a careful, laborious and extensive comparison of the registered boundary lines contained in the certificate of title of the tract of land he proposes to buy with those contained in all the earlier certificates of title to be found in the land registry. Assuredly it was never the intention of the author of the new Land Registration Act to impose such a burden on a purchaser of duly registered real estate, under penalty that a lack of the knowledge which might thus be acquired may be imputed to him by this court as negligence in ruling upon the respective equities of the holders of lands which have been the subject of double or overlapping registration.

On the other hand, I think that negligence and fault may fairly be imputed to a holder of a registered certificate of title who stood supinely by and let a default judgment be entered against him, adjudicating all or any part of his registered lands to another applicant, if it appears that he was served with notice or had actual notice of the pendency of the proceedings in the Court of Land Registration wherein such default judgment was entered.

The owner of land who enjoys the benefits secured to him by its registry in the Court of Land Registration may reasonably be required to appear and defend his title when he has actual notice that proceedings are pending in that court wherein another applicant, claiming the land as his own, is seeking to secure its registry in his name. All that is necessary for him to do is to enter his appearance in those proceedings, invite the court's attention to the certificate of title registered in his name, and thus, at the cost of the applicant, avoid all the damage and inconvenience flowing from the double or overlapping registration of the land in question. There is nothing in the new system of land registration which seems to render it either expedient or necessary to relieve a holder of a registered title of the duty of appearing and defending that title, when he has actual notice that it is being attacked in a court of competent jurisdiction, and if, as a result of his neglect or failure so to do, his lands become subject to double or overlapping registration, he should not be permitted to subject an innocent purchaser, holding under the later certificate, to all the loss and damage resulting from the double or overlapping registration, while he goes scot free and holds the land under a manifest misapplication of the equitable rule that "where conflicting equities are otherwise equal in merit, that which first accrued will be given the preference." It is only where both or neither of the parties are at fault that the rule is properly applicable as between opposing claimants under an earlier and a later certificate of registry to the same land.

Of course all that is said in the briefs of counsel and the majority opinion as to the right of the holder of a certificate to rest secure in his registered title so that those dealing with registered lands can confidently rely upon registry certificates thereto is equally forceful by way of argument in favor of the holder of one or the other certificate in case of double or overlapping registration. The problem is to determine which of the certificate holders is entitled to the land. The decision of that question in favor of either one must necessarily have the effect of destroying the value of the registered title of the other and to that extent shaking the public confidence in the value of the whole system for the registration of lands. But, in the language of the majority opinion, "that mistakes are bound to occur cannot be denied and sometimes the damage done thereby is irreparable. It is the duty of the courts to adjust the rights of the parties under such circumstances so as to minimize the damages, taking into consideration all the conditions and the diligence of the respective parties to avoid them."lawphil.net

It will be observed that I limit the exception to the general equitable rule, as laid down in the majority opinion, to case wherein the holder of the earlier certificate of title has actual notice of the pendency of the proceedings in the course of which the latter certificate of title was issued, or to cases in which he has received personal notice of the pendency of those proceedings. Unless he has actual notice of the pendency of such proceedings I readily agree with the reasoning of the majority opinion so far as it holds that negligence, culpable negligence, should not be imputed to him for failure to appear and defend his title so as to defeat his right to the benefit of the equitable rule. It is true that the order of publication in such cases having been duly complied with, all the world is charged with notice thereof, but it does not necessarily follow that, in the absence of actual notice, culpable negligence in permitting a default judgment to be entered against him may be imputed to the holder of the earlier certificate so as to defeat his right to the land under the equitable rule favoring the earlier certificate. Such a holding would have the effect (to quote the language of the majority opinion) of requiring the holder of a certificate of title to wait indefinitely "in the portals of the court" and to sit in the "mirador de su casa" in order to avoid the possibility of losing his lands; and I agree with the writer of the majority opinion that to do so would place an unreasonable burden on the holders of such certificate, which was not contemplated by the authors of the Land Registration Act. But no unreasonable burden is placed upon the holder of a registered title by a rule which imputes culpable negligence to him when he sits supinely by and lets a judgment in default be entered against him adjudicating title to his lands in favor of another applicant, despite the fact that he has actual knowledge of the pendency of the proceedings in which such judgment is entered and despite the fact that he has been personally served with summons to appear and default his title.

"Taking into consideration all of the conditions and the diligence of the respective parties," it seems to me that there is no "equality in merit" between the conflicting equities set up by an innocent purchaser who acquires title to the land under a registered certificate, and the holder of an earlier certificate who permitted a default judgment to be entered against him, despite actual notice of the pendency of the proceedings in the course of which the later certificate was issued.

I am convinced, furthermore, that aside from the superior equities of the innocent purchaser in cases such as that now under discussion, there are strong reasons of convenience and public policy which militate in favor of the recognition of his title rather than that of the holder of the earlier title.

One ruling exposes all persons purchasing or dealing in registered lands to unknown, unspecified and uncertain dangers, to guard against which all such persons will be put to additional cost, annoyance and labor on every occasion when any transaction is had with regard to such lands; while the other ruling tends to eliminate consequences so directly adverse to the purpose and object for which the land registration law was enacted, and imposes no burden upon any holder of a certificate of registered lands other than that of defending his title on those rare, definite and specific occasions wherein he has actual notice that his title is being challenged in a Court of Land Registration, a proceeding in which the cost and expense is reduced to the minimum by the conclusive character of his certificate of title in support of his claim of ownership. Furthermore, judgment against the innocent purchaser and in favor of the holder of the earlier certificate in a case such as that under consideration must inevitably tend to increase the danger of double or overlapping registrations by encouraging holders of registered titles, negligently or fraudulently and conclusively, to permit default judgments to be entered against them adjudicating title to all or a part of their registered lands in favor of other applicants, despite actual notice of the pendency of judicial proceedings had for that purpose, and this, without adding in any appreciable degree to the security of thir titles, and merely to save them the very slight trouble or inconvenience incident to an entry of appearance in the court in which their own titles were secured, and inviting attention to the fact that their right, title and ownership in the lands in questions has already been conclusively adjudicated.

The cases wherein there is a practical possibility of double or overlapping registration without actual notice to the holder of the earlier certificate must in the very nature of things to be so rare as to be practically negligible. Double or overlapping registration almost invariably occurs in relation to lands held by adjoining occupants or claimants. It is difficult to conceive of a case wherein double registration can take place, in the absence of fraud, without personal service of notice of the pendency of the proceedings upon the holder of the earlier certificate, the statute requiring such notice to be served upon the owner or occupant of all lands adjoining those for which application for registration is made; and the cases wherein an adjoining land owner can, even by the use of fraud, conduct proceedings for the registration of his land to a successful conclusion without actual notice to the adjoining property owners must be rare indeed.

In the case at bar the defendant purchased the land in question from the original holder of a certificate of title issued by the Court of Land Registration, relying upon the records of the Court of Land Registration with reference thereto and with no knowledge that any part of the land thus purchased was included in an earlier certificate of title issued to the plaintiff. The plaintiff, the holder of the earlier certificate of title, negligently permitted a default judgment to be entered against him in the Court of Land Registration, adjudicating part of the lands included in his own certificate of title in favor of another applicant, from whom the defendant in this action acquired title, and this despite the fact that he was an adjoining land owner, had actual notice of the pendency of the proceedings and was personally served with summons to appear and defends his rights in the premises. It seems to me that there can be no reason for doubt as to the respective merits of the equities of the parties, and further that the judgment of the majority in favor of the plaintiff will inevitably tend to increase the number of cases wherein registered land owners in the future will fail to appear and defend their titles when challenged in other proceedings in the Courts of Land Registration, thereby enormously increasing the possibility and probability of loss and damage to innocent third parties and dealers in registered lands generally, arising out of erroneous, double or overlapping registration of lands by the Courts of Land Registration.

Carson, J., concurs.

LEE V. COURT OF APPEALS (1973)

SIMEON A. LEE AND ABUNDIA RAGANAS, PETITIONERS, VS. COURT OF APPEALS, DOLORES R. SALDANA, SALVADOR SALDANA, CESAR T. VILLAREAL, EPITASIA TAN AND ALBERTO TABAR TABADA, RESPONDENTS.

DECISION

TEEHANKEE, J.:

The Court of Appeals’ decision under review upholding the Cebu court’s order archiving peti­tioners’ pending action before it to quiet title and ordering the parties instead to reopen the long closed intestate proceeding of the deceased Andres Tabar is herein set aside. Since there is no dispute among the heirs of the estate who have no claims and have long disposed of their inherited properties, and the pending action to quiet title was filed precisely for the purpose of determining who among the conflicting parties (who claim either by right of purchase from an heir or from an entirely different source opposed to said heir) has a better legal right and title to the properties, and such conflict of ownership is beyond the probate court’s authority and jurisdiction to determine, the Cebu court is called upon not to archive the case but to hear and determine the issue of ownership properly pertaining to its jurisdiction and submitted to it for adjudication.

The undisputed facts of the case as stated by respondent court of appeals in its decision under review are as follows:

“The record shows that respondent Alberto Tabar Tabada is one of the three heirs of the late Andres Tabar whose estate was being settled by the respondent Court of First Instance of Cebu in Special Proceeding No. 1962-0; that during the pendency of the above-mentioned proceeding and before the partition of the estate among the three heirs, one of the said heirs, respondent Alberto Tabar Tabada, sold all his rights and interests over the estate of the late Andres Tabar to the petitioners; that on July 6, 1963 Special Proceeding No. 1962-G was terminated without partitioning and distributing the estate allegedly because the heirs preferred to receive the properties proindiviso; that Esteban Tabar, Valentina Tabar Cansan­cio and respondent Alberto Tabar, the three heirs of the deceased Andres Tabar, executed an extra-judicial parti­tion of the estate; that on the same date, July 6, 1963, respondent Alberto Tabar Tabada, allegedly in connivance and collusion with the spouses Dolores R. Saldana and Salvador Saldana, private respondents herein, executed a deed of sale in favor of the said spouses of all the real properties he was supposed to receive as his share from the estate of Andres Tabar; that petitioners filed Civil Case No. R-9247 in the Court of First Instance of Cebu against private respondents Alberto Tabar Tabada, Dolores R. Saldana and Salvador Saldana for the annulment of the deed of sale executed by respondent Alberto Tabar Tabada in favor of respondent Dolores R. Saldana and Salvador Sal­dana; that the respondent court then presided by Judge Mateo Canonoy rendered its decision in Civil Case No. R-9247 declaring the sale in favor of the petitioners as valid and binding and as null and void the sale of respondent Alberto Tabar Tabada in favor of respondents Dolores R. Saldana and Salvador Saldana and ordering the said respond­ents to return the properties in question to the petitioners; that on appeal the said decision was affirmed by the Court of Appeals; that the petition for review by certiorari of the decision of the Court of Appeals to the Supreme Court was denied for lack of merit; that the decision of the respondent court in Civil Case No. R-9247, after becoming final, was executed x x.”^[1]

Respondent appellate court’s decision further narrated -

“x x that after Special Proceeding No. 1962-0 was declared terminated, the heirs discovered some more real properties belonging to the estate of the deceased Andres Tabar; that the three heirs, without reopening Special Proceeding No. 1962-0 executed an extra-judicial partition of said discovered real properties; that respondent Alberto Tabar Tabada executed a deed of sale covering his share over the remaining properties of the estate of Andres Tabar in favor of respondents Dolores R. Saldana and Salvador Saldana consisting of 1/2 proindiviso of Lot 4960. Lot 8416 and Lot 5154, all of the Cadastral Survey of Cebu; that respondents Dolores R. Saldana and Salvador Saldana in turn sold the said share to respondents Cesar T. Villareal and Epitasia Tan who are allegedly buyers in bad faith because they knew that the subject matter of the sale had been previously sold to the petitioners; that petitioners had to institute Civil Case No. R-10989 with the respondent court to quiet their title over the three lots conveyed by respondent Alberto Tabar Tabada to respondents Dolores R. Saldana and Salvador Saldana; that when the petitioners were about to finish the presentation of their evidence, they were directed by the respondent court to submit evidence show­ing that all taxes and other obligations of the intestate estate of Andres Tabar in Special Proceeding No. 1962-0 had already been paid and also to show that the said special proceeding had already been terminated and the estate distributed; that in compliance with the said order of the respondent court, the petitioners filed with the said court a certified copy of the manifestation of the counsel for the administrator dated January 22, 1957 and a certified copy of the order of the respondent court, Branch I, dated January 22, 1957; that a certain Constancio Cabreros filed a motion to intervene in Civil Case No. R-10989 with res­pect to Lot No. 5154 claiming to be the owner thereof.”^[2]

It then stated that after petitioners as plaintiffs rested their case, the Cebu court of first instance issued its Order to Archive Case dated September 18, 1972, as follows:

“ORDER TO ARCHIVE CASE

“In compliance with this Court’s requirement, Atty. Gaudioso C. Villagonzalo submitted a 1957 Order of this Court showing that in Sp. Proc. No. 1962-0, Intestate Estate of Andres Tabar, the Court distributed the properties pro indiviso to the heirs of Andres Tabar. The order, however, does not indicate what properties were distributed, but counsel of all the parties in this case have agreed that the properties here being liti­gated belong to the Intestate Estate of Andres Tabar, with the manifestation of Atty. Villagonzalo, that the three parcels, the properties under litigation in this case, were discovered after the order of the intestate court dated January 22, 1957 was issued.

“In view of this fact, the parties in this case are required to reopen the Intestate Estate of Andres Tabar and there settle the distribution of the properties since it is undisputed that these three (3) parcels of land as described in paragraph 12 of the complaint belong to the Intestate Estate of Andres Tabar. In the meantime, this case shall be archived, the final dispos­ition of which depend on what the Intestate Estate Court in Sp. Proc. No. 1962-0 would finally determine.

“Parties are required to submit to this Court the final disposition of said three parcels of land within fifteen (15) days after the Intestate Estate Court makes its final order.

“This case is therefore archived.”

Upon an action for certiorari instituted by plaintiffs-petitioners, respondent appellate court denied relief per its decision of April 10, 1973 stating that “(T)he respondent court [of Cebu] did not dismiss Civil Case No. R-10989. It simply directed that ‘this case shall be archived x x .’ The respondent court acted properly in holding in abeyance action on Civil Case No. R-10989 pending the final determination of Special Proceeding No. 1962-0.” It ruled that such course of action of the Cebu court was in consonance with this Court’s ruling in Macias vs. Uy Kim^[3] reiterating the rule in Guilas vs. Judge, CFI of Pampanga,^[4] that:

“The probate court loses jurisdiction of an estate under administration only after the payment of all the debts and the remaining estate delivered to the heirs entitled to receive the same. The finality of the appro­val of the project of partition by itself alone does not terminate the probate proceeding x x x . As long as the order of the distribution of the estate has not been complied with, the probate proceedings cannot be deemed closed and terminated x x x ; because a jud­icial partition is not final and conclusive and does not prevent the heir from bringing an action to obtain his share, provided the prescriptive period therefor has not elapsed x x x. The better practice, however, for the heir who has not received his share, is to demand his share through a proper motion in the same probate or administrative proceedings, or for reopening of the probate or administrative proceedings if it had already been closed, and not through an independent action, which would be tried by another court or judge which may thus reverse a decision or order of the probate or intestate court already final and executed and re-shuffle properties long ago distributed and disposed of x x.”^[5]

Reconsideration having been denied by the appellate Court, petitioners filed the present petition for review by Certiorari. The Court required comment of the respondents per its resolution of July 19, 1973. Notwithstanding its subsequent resolution of October 1, 1973, giving respondents another opportunity to do so, respondents with the exception of Alberto Tabar Tabada failed to file their comments. The Court thereafter resolved to treat the case as a special civil action and to consider the case submitted for decision with Tabada’s comment, for a prompt determination of the simple jurisdictional issue involved.

It is obvious from the undisputed facts as stated in respondent appellate court’s decision that the proceedings for the intestate estate of the deceased Andres Tabar have long been closed since 1957 with the payment of all taxes and debts and with the distribution of the net remainder of the estate pro-indiviso among the three heirs thereof, namely respondent Alberto Tabar Tabada, Valentina Tabar Cansancio and Esteban Tabar.

When three more parcels of land of the estate were discovered after such distribution, the three heirs partitioned the same among themselves in extra-judicial partition in 1963 instead of reopening the closed intestate proceeding. None of the three heirs nor any affected third party has ever questioned the said extra-judicial partition.

The issue in the pending case before the Cebu court does not in any way involve the estate nor its heirs or creditors. What is involved therein is simply a question of conflicting claims of ownership between petitioners-plaintiffs spouses as vendees of all the rights, interests and participation of the share of the heir Alberto Tabar Tabada in said three parcels of land (which Alberto recognizes) and respondents-spouses Dolores R. Saldana and Salvador Saldana who claim to be the vendees of the same parcels in a second sale allegedly executed by Alberto in their favor (which Alberto repudiates)^[6] together with their co-respondents, spouses Cesar T. Villareal and Epitasia Tan as vendees-transferees in turn of the Sal­dana spouses. Thus petitioners-plaintiffs filed their action below against said respondents as defendants to quiet their title over the three parcels conveyed to them by Alberto Tabar Tabada.^[7]

Respondent appellate court therefore gravely erred in upholding the Cebu court’s order, archiving the petitioners’ pending action to quiet title and requiring the parties to reopen the intestate estate of the deceased Andres Tabar and “there settle the distribution of … the three (3) parcels of land.”

The cited cases of Macias and Guilas, supra, are totally inapplicable and were wrongly invoked since the probate court had already lost jurisdiction over the estate. There is no dispute among the three heirs of the estate who have already partitioned the estate and have since sold their respective share in the same to third parties. Hence, there is no longer any property of the estate to administer or distribute and settle among the recognized three heirs who have no claims whatsoever for the probate court to adjudicate. As distinguished in Macias itself, the doctrine therein reiterated applies to a preterited their or legatee whose proper recourse is to demand his share through a proper motion in the same estate proceed­ings or for reopening thereof if it had already been closed but such reopenings were also denied in a host of cited cases “because the actions therein were filed by the preterited heir or legatee or co-owner long after the intestate or estate partition proceedings had been closed or terminated.”^[8]

What remains is a conflict of ownership between petitioners and respondents (except Alberto Tabar Tabada) who claim title to the same parcels by right of purchase from Alberto. This conflict is properly the subject matter of the action to quiet title filed by petitioners against respondents in the Cebu court, which should be duly determined and adjudicated by it instead of ordered archived. This conflict of ownership between the parties by alleged right of purchase from the heir Alberto is beyond the jurisdiction of the probate court to determine. It is manifest, therefore, that what properly applies in the case at bar is the controlling doctrine that probate courts have no jurisdiction to determine with finality conflicts of ownership. As stressed in Junquera vs. Borromeo^[9] and Borromeo vs. Canonoy^[10] “(T)hat such matter [of question of ownership] must be litigated in a separate action has been the established jurisprudence in this jurisdiction x x x , except where a party merely prays for the inclusion or exclusion from the inventory of any particular property, in which case the probate court may pass upon provisionally, the question of inclusion or exclusion, but without prejudice to its final determination in an appropriate action.”

By the same token, the claim of the intervenor in the action below, one Constancio Cabreros, who claims ownership to the same parcels by right of purchase from the heirs of Antonio and Maria Sadorra who, he claims, are the legal owners of the lands in question as against the deceased Andres Tabar involves a conflict of ownership that is beyond the jurisdiction of the probate court and should properly be determined and adjudicated in the petitioners’ action below to quiet title. As already indicated it is well settled that the probate court has no authority to decide in the estate proceedings (even if they were to be reopened) whether property dis­puted between the estate and a third party belongs to one or the other but that such question of ownership has to be resolved in an appropriate separate action.^[11]

Since it is patent that there remain no properties of the estate of the deceased Andres Tabar to be administered or settled, and that the action to quiet title pending in the Cebu court below is pre­cisely for the purpose of determining who among the conflicting parties (petitioners as against respondents who claim the same properties by right of purchase from the heir Alberto Tabar Tabada as against the intervenor who claims title from a different source opposed to Alberto’s) has a better legal right and title to the pro­perties – which conflict is beyond the jurisdiction of the probate court – nothing but undue and fruitless delay will be gained by the Cebu court’s order to archive the case rather than to discharge its task of determining and deciding the conflict of ownership properly pertaining to its jurisdiction and submitted to it for adjudi­cation.

ACCORDINGLY, the decision of respondent Court of Appeals is hereby set aside. The ques­tioned order of the Cebu court of first instance to archive Civil Case No. R-10989 thereof is hereby ordered set aside and said court is directed to proceed with the hearing and determination of the said action to quiet title on its merits. With costs in both instances jointly and severally against respondents spouses Dolores R. Saldana and Salvador Saldana and spouses Cesar T. Villareal and Epitasia Tan. so ordered.

Makalintal, C.J., Ruiz Castro, Makasiar, Esguerra, and Muñoz Palma, JJ., concur.

---

^[1] Rollo, pp. 9-10, emphasis supplied.

^[2] Idem, pp. 10-11.

^[3] 45 SCRA 251 (1972), per Makasiar, J.

^[4] 43 SCRA 111, 117 (1972), per Makasiar, J.

^[5] Emphasis supplied.

^[6] In Alberto’s comment filed through counsel under date of November 1, 1973, he repudiates the second sale allegedly executed by him in favor of the Saldana spouses stating in effect that he was coerced into signing the same without knowing its contents by his first cousin respondent Dolores R. Saldana and her husband and that he had to escape from their household. Rollo, p. 35.

^[7] Docketed as Civil Case No. R-10989 of the Cebu court of first instance.

^[8] 45 SCRA, at p. 263.

^[9] 19 SCRA 656, 667 and cases cited, per Dizon, J.

^[10] 19 SCRA, 667, 670, per Dizon, J.

^[11] See also Rule 87, secs. 2 and 6, Rules of Court.

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BALBECINO V. ORTEGA (1962)

G.R. No. L-14231 April 28, 1962

CATALINO BALBECINO, ET AL., petitioners,
vs.
HON. WENCESLAO M. ORTEGA, ETC., ET AL., respondents.

Ambrosio N. Barit for petitioners.
Castro Raval for respondents.

BAUTISTA ANGELO, J.:

On July 22, 1948, Paulino Acosta filed a complaint to quiet title and for recovery of possession against Justo Balbecino before the Court of First Instance of Ilocos Norte over a parcel of land (Civil Case No. 758). Acosta alleged that he bought the land on August 16, 1926 from Estefania Guerrero and immediately thereafter he constituted Justo Balbecino as his tenant who delivered to him his share in the harvest until the crop year 1941-1942 when Balbecino, taking advantage of the confusion that prevailed during the Japanese occupation, refused to give him his share of the crop alleging to be the owner of the land.

On August 10, 1948, Balbecino filed his answer alleging that the land was owned and possessed by spouses Raymundo Balbecino and Cipriana Sanchez since they had acquire it from its former owner Estefania Guerrero de Taylan by virtue of a deed of sale executed on April 1, 1924. After trial the court rendered decision on August 1, 1956 declaring Acosta the owner of the land and ordering Balbecino to turn over its possession to Acosta besides indemnifying him for his share of the crop from 1942 up to 1955.

Balbecino filed a motion for reconsideration, and when the same was denied, he took the matter on certiorari to the Court of Appeals, which on June 14, 1956 rendered decision dismissing the petition. When the decision became final and executory, the trial court issued a writ of execution upon the request of Acosta with the result that the latter was placed in the possession of the land, as shown by the return of the sheriff dated December 21, 1956.

It was after Balbecino's several attempts to recover possession of the land have failed, which culminated in several contempt proceedings filed against him, that his brothers and sisters commenced this case before the same against Paulino Acosta praying that they be declared answers of the land and that the writ of possession issued in favor of the latter be declared null and void. In complaint, plaintiffs prayed, among others, that a preliminary injunction be issued to restrain Acosta from occupying, cultivating and collecting the produce of the land pending termination of the case on the merits. 1äwphï1.ñët

Defendant alleged in his answer that he is the owner and possessor of the land, his ownership and possession thereof having been settled, recognized and adjudicated by the same court in its decision in Civil Case No. 758, which was affirmed by the Court of Appeals; that plaintiffs are the brothers and sisters of Justo Balbecino who was the defendant in the former case, and because of his defeat therein he is now utilizing said plaintiffs as tools to circumvent and defeat the force and effect of the decision rendered in said case; and he prayed that, pending decision on the merits, a writ of preliminary injunction be issued against the plaintiffs so that they may be prevented from occupying and harassing the defendant in connection with the possession of the land.

On July 10, 1958, the trial court issued an order denying the petition of plaintiffs for preliminary injunction, but granting that of defendant, it having found after an examination of the pleadings that defendant obtained a favorable decision in Civil Case No. 758 and was placed in possession of the land by the sheriff, and so that possession should be respected pending termination of the case on the merits. It ordered that the injunction be issued upon filing by defendant of a bond in the amount of P500.00. It is because of the issuance of this writ that plaintiffs interposed the present petition for certiorari alleging that the court a quo committed a grave abuse of discretion in issuing said writ in disregard of the claim of possession of the plaintiffs which they intimated in their complaint.

It appears that Paulino Acosta filed a complaint against Justo Balbecino to quiet title and recover the possession of the land in litigation. In his answer Balbecino claimed that the land belonged to spouses Raymundo Balbecino and Cipriana Sanchez who acquired it from Estefania Guerrero de Taylan by virtue of a deed of sale executed on April 1, 1924. In that answer he did not state the interest he had in the land although later he executed an affidavit stating that he is the absolute owner thereof in connection with the motion for reconsideration asking for the setting aside of the judgment rendered against him. This judgment became final and executory, and when the writ of execution was issued, the sheriff placed Acosta in possession of the land. And although several attempts were made by Balbecino to recover possession thereof by defying the writ, the same failed because Acosta filed contempt proceedings against him during which he pleaded to be spared from disciplinary action upon the promise that he will never encroach again upon the land. And it was after these attempts had failed that petitioners, who are the brothers and sisters of Justo Balbecino, commenced the present action. Under the foregoing facts, which appear undisputed in the pleadings, the court a quo found no other alternative than to grant the petition for preliminary injunction filed by respondent Acosta, for it really appears that at the time of the filing of the second action he was in actual possession of the land, and it is but fair that for the time being that possession be respected until the case is decided on the merits.

It is true that petitioners have filed with the sheriff an opposition protesting against the order placing Paulino Acosta in possession of the land, but the same came late, and so it was properly disregarded by the sheriff. This protest is a clear proof that Acosta was really in possession of the land when this case was started by petitioners. Considering that Justo Balbecino averred in the affidavit he attached to his motion for reconsideration that he is the absolute owner of the land and that after all his hope to regain it has vanished petitioners, who are his brothers and sisters, commenced the present action, there is reason to believe that the same is but an eleventh hour attempt to circumvent the decision rendered in Civil Case No. 758. This is enough reason that justifies the action taken by the court a quo.

WHEREFORE petition is denied. The order of the court a quo dated July 10, 1958, is affirmed. Cost against petitioners.

Bengzon, C.J., Padilla, Concepcion, Reyes, J.B.L., Barrera, Paredes and Dizon, JJ., concur.

FAJA V. COURT OF APPEALS (1977)

FIRST DIVISION

G.R. No. L-45045 February 28, 1977

FELIPA FAJA substituted by: NEMESIO GARDOSE, ANICIA GARDOSE and EUFROSINO GARDOSE, petitioners,
vs.
HON. COURT OF APPEALS, HON. TOMAS R. LEONIDAS, JUDGE OF THE COURT OF FIRST INSTANCE OF CAPIZ, BRANCH III, and LEVINE FRIAL, respondents.

Medardo A. Claro for petitioners.

Larry B. Datiles for private respondent.

MUÑOZ PALMA, J.:

The summary judgment rendered by Judge Tomas R. Leonides of the Court of First Instance of Capiz, in Civil Case No. M-355, entitled Levine Frial, plaintiff versus Felipa Faja, defendant", and affirmed by respondent Court of Appeals, is sought to be set aside in this Petition for having been rendered in gross violation of law resulting in a deprivation of petitioners' right to due process.

We find this Petition meritorious under the rule that summary judgment may be rendered only when, except as to the amount of damages, there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law, which is not the situation between the parties in this case. ¹

Levine Frial filed with the Court of First Instance of Capiz, Branch 111, situated in Mambusao, Capiz, a complaint docketed as Civil Case No. M-355 for "Recovery of Possession and Damages" of a parcel of land situated in Barrio San Agustin, Dumalag, Capiz, with an area of 235,854 square meters more or less, covered by Original Certificate of Title No. RO-1496 in the name of Indalecio Frial, father of Levine Frial. The complaint alleged that since 1945 up to the present (the complaint is dated April 15, 1975) the defendant Felipa Faja had been illegally possessing and occupying the above-mentioned property without the knowledge and consent of the registered owner, Indalecio Frial now deceased, nor of his heirs, one of whom is Levine Frial; that when plaintiff Frial came to know that Felipa Faja was occupying the property the former immediately demanded its return but Faja refused, hence, the complaint for recovery of possession of the land in question and the unearned income from the land during the period of not less than 30 years amounting to around P150,000.00. ²

Defendant Felipa Faja in her Answer specifically denied under oath the allegations in the complaint as to the ownership of plaintiff Frial, and by way of special and affirmative defenses claimed: that she is the lawful owner and in actual possession of the property which is Identical to Lot No. 4010 of the Cadastral Survey of Dumalag, Capiz, which she inherited from her father, Marcelino Faja, who died in 1925, the latter in turn having inherited the same property from his father, Antonio Faja, who died in 1915; that she and her predecessors-in-interest have been in possession of the property publicly, peacefully, continuously, and adversely, in the concept of owners, for more than 60 years, the property having been declared for taxation purposes in the name of Marcelino Faja under Tax Declaration No. 4807, revised under Tax Declaration No. 5523 in the year 1921, and presently in the name of Felipa Faja under Tax Declaration No. 5523 and for which the land taxes have been paid since the time Felipa Faja's predecessors have been in possession; that Felipa Faja is actually living on the land in question, and that the same is planted with coconut trees, mangoes, bananas, santol, buri while around 8 hectares are devoted to rice and corn that neither plaintiff Levine Frial nor his father Indalecio Frial ever lived on or possessed said property "even for a single moment", and any Certificate of Title secured by Indalecio Frial was obtained through fraud, deceit, and misrepresentation, the latter not being the owner thereof and not having occupied or possessed the property in concept of owner; that as her counterclaim, defendant Faja prays that she be declared the lawful owner of the property, that plaintiff Frial be directed to reconvey the property to her in the sense that the Certificate of Title covering said property be cancelled and, in lieu thereof, a Transfer Certificate of Title be issued in her favor. ³

In his Reply to Felipa Faja's, plaintiff Levine Frial denied that the Certificate of Title of Indalecio Frial was secured through fraud and misrepresentation, and alleged that Faja's right to question the validity of the Title had prescribed. ⁴

After all responsive pleadings were filed, the case was called for a pre-trial conference during which Judge Leonides directed the parties to submit memoranda on the question of whether or not a summary judgment may be promulgated. ⁵

In his Memorandum filed with the trial court, plaintiff Levine Frial sustained the view that a summary judgment may properly be issued on the basis of the pleadings inasmuch as the only issues to be resolved were:

(a) Can a registered owner of a piece of land who has acquired title thereto for almost 35 years still recover possession thereof from actual occupants who claim long and continuous possession of the same property but without title?

(b) Is reconveyance of a titled property still legally possible, considering that a period of more than 10 years had elapsed since the issuance of the decree of registration? (p. 36, rollo)

On the other hand, Felipa Faja in her Memorandum averred that the petition for a summary judgment should be denied as there was a genuine controversy between the parties which required a trial on the merits and that the alleged prescription of her counterclaim for reconveyance cannot be the subject of a summary judgment, aside from the fact that her cause of action for the reconveyance to her of the property arose only from the moment she was served copy of the complaint which was in 1975, consequently, her counterclaim was filed well within the statutory period. ⁶

In an order dated December 3, 1975, the trial Judge sustained Levine Frial's submission stating:

It appearing from the complaint and the answer, as well as the annexes, thereto, and the written arguments of the parties, that there is no genuine issue as to material fact, except as to the amount of (images, it is ordered that a summary judgment be as it is hereby entered in favor of the plaintiff, and this case is set for trial on the sole issue of damages on December 22,1975, at 8:00 on the morning.

SO ORDERED. (p. 45, Ibid.)

A motion for reconsideration was filed with the trial court ⁷ but the same was denied for lack of merit in all order dated February 9, 1976. ⁸

Because Felipa Faja died on November 25, 1975, her children, all surnamed Gardose, in substitution for their deceased mother, filed with the Court of Appeals a Petition for certiorari (CA-G.R. No. SP-05151- R) and prayed that the aforequoted order for summary judgment be set aside. Respondent Appellate Court through its Eighth Division dismissed the Petition holding that " ... a summary judgment is proper as there is no genuine issue as to any material fact", reasoning that inasmuch as the disputed property is covered by an Original Certificate of Title, any action to annul that title on the ground of fraud prescribes after the lapse of 10 years from the issuance of the title and therefore the counterclaim for reconveyance pleaded in the answer of Felipa Faja cannot be sustained. ⁹

We do not agree with respondent Court for the following reasons:

(1) The counterclaim of Felipe Faja for reconveyance to her of the litigated property has not prescribed. It is an established rule that an action to quiet title to property in the possession of plaintiff is inprescriptible. ¹⁰ Inasmuch as it is alleged in paragraph 3 of Frial's complaint, that Felipa Faja has been in possession of the property since 1945 up the present or for a period of 30 years, her cause of action for reconveyance, which in effect seeks to quiet her title to the property, falls within that rule. If at all, the period of prescription began to run against Felipa Faja only from the time she was served with copy of the complaint in 1975 giving her notice that the property she was occupying was titled in the name of Indalecio Frial. There is settled jurisprudence that one who is in actual possession of a piece of land claiming to be owner thereof may wait until his possession is disturbed or his title is attacked before taking steps to vindicate his right, the reason for the rule being, that his undisturbed possession gives him a continuing right to the seek the aid of a court of equity to ascertain and determine the nature of the adverse claim of a third party and its effect on his own title, which right can be claimed only by one who is in possession. ¹¹ No better situation can be conceived at the moment for Us to apply this rule on equity than that of herein petitioners whose mother, Felipa Faja, was in possession of the litigated property for no less than 30 years and was suddenly confronted with a claim that the land she had been occupying and cultivating all these years, was titled in the name of a third person. We hold that in such a situation the right to quiet title to the property, to seek its reconveyance and annul any certificate of title covering it, accrued only from the time the one in possession was made aware of a claim adverse to his own and it is only then that the statutory period of prescription commences to run against such possessor.

(2) The existence of a Certificate of Title in the name of respondent Frial's father is not conclusive on the question of ownership of the land in controversy, because the validity of such a certificate is put in issue by allegations of fraud and misrepresentation by the defendant below, Felipa Faja. Petitioners herein correctly invoked in their Petition for certiorari filed before respondent tribunal, what this Court stated in Monticines, et al. vs. Court of Appeals, et al., September 4, 1973, 53 SCRA 14, through Justice Enrique M. Fernando, to wit:

Nor does the mere fact that respondent-appellee Marcelo Coral could show a certificate of Torrens Title in his favor conclude the matter, the question of fraud having been, reasonably raised and the sought. Only recently, in Philippine Commercial and lndustrial Bank v. Villalva, (L-28194, November 24, 1972, 48 SCRA 31) this Court had occasion to state: 'There is, however, a countervailing doctrine, certainly not of lesser weight, that mitigates the harshness of the iron-clad application of the principle attaching full faith and credit to a Torrens certificate. It is inspired by the highest concept of what is fair and what is equitable. It would be a sad day for the law if it were to be oblivious to the demands of justice. The acceptance accorded the Torrens system of registration would be impaired if it could be utilized to perpetrate fraud and chicanery. If it were thus, then no stigma would attach to a claim based solely on a narrow and literal reading of a statutory prescription, devoid of any shadow of moral right. That is not the juridical norm as recognized by this Court. Deceit is not to be countenanced; duplicity is not to be rewarded Witness the favor with which jurisprudence has looked on the action for reconveyance as well as the recognition of the constructive trust. There is thus the stress on (Emphasis Ours) ¹²

It is regrettable to say the least that the above pronouncements of this Court failed to impress respondent tribunal with the merits of petitioners' case.

(3) There are material facts to be inquired into and resolved on the basis of evidence adduced by the parties which will determine the legal precepts to be applied, among which are: (a) the circumstances which led to the issuance in 1950 of Original Certificate of Title RO-1496, a reconstituted title of a supposed Original Certificate of Title No. 23257 allegedly issued on December 12, 1940, pursuant to a decree of registration No. 732588 dated November 5, 1940, which was claimed to have been lost; (b) explanation, if any, for the inaction of the alleged i registered owner Indalecio Frial and of his heirs for a period of 30 years to take possession of the land in question thereby permitting Felipa Faja to cultivate and receive for herself the income from the produce of the land which as estimated by now respondent Frial amounted to around P150,000.00 for the entire period; and (c) the claim of ownership and possession of Felipa Faja and her predecessors-in- interest which allegedly date as far back as 60 years prior to the filing of Frial's complaint in 1975, and her assertions of fraud and misrepresentation committed by Indalecio Frial in registering the property in his name. All these matters cannot simply be summarily disposed of in favor of respondent Frial and adversely against petitioners without evidence adduced on their conflicting claims. ¹³

In conclusion, We state that while this Court desires to give full encouragement to trial courts to take advantage of and apply the provisions of the Rules of Court on summary judgment as valuable aids to an expeditious disposition of cases, We cannot but reiterate what was said and held in Constantino Hon. Estenzo, et al., L-40403, July 31, 1975, and reiterated in Auman, et al., vs. Hon. Estenzo, et al., L- 40500, February 27, 1976, to wit:

... The demands of a fair, impartial, and wise administration of justice call for a faithful adherence to legal precepts on procedure which ensure to litigants the opportunity to present their evidence and secure a ruling on all the issues presented in the respective pleadings. "Shortcuts" in judicial processes are to be avoided where they impede rather than promote a judicious dispensation of justice.

Again, in Gregorio Lorenzo and Felisa Lavilla vs. The Hon. Numeriano G. Estenzo, et al., L43306, October 29, 1976, this Court set aside a summary judgment rendered by respondent Judge Estenzo of the Court of First Instance of Iloilo, reiterating the rule that summary judgment can only be entertained where there are no questions of fact in issue or where the material allegations of the pleadings are not disputed. ¹⁴

IN VIEW OF THE FOREGOING, the appealed decision of the Court of Appeals and the disputed Order of the trial court rendering summary judgment in favor of respondent Levine Frial are hereby set aside, and the Presiding Judge of Branch III, Court of First Instance of Capiz, is directed to proceed with the trial on the merits of Civil Case No. M-355. With costs against private respondent Levine Frial.

So Ordered.

Makasiar, Concepcion Jr., and Martin, JJ., concur.

Separate Opinions

TEEHANKEE, J., concurring:

I fully concur and wish only to stress that given the circumstances that petitioner Felipa Faja had been admittedly in possession of the property prior to the filing of respondent's complaint for 30 years and according to petitioners that their peaceful, continuous adverse possession in the concept of owner had run for over 60 years, during which time they had declared the same and religiously paid the taxes thereon; that respondent and his predecessors allegedly did not possess the property for a single moment; that respondent allegedly obtained title to the property through fraud deceit and misrepresentation and without the required personal notice on petitioners as actual occupants; the very prescription and/or laches wrongfully sought to be applied by respondent court (to justify the summary judgment against petitioners) may be equally, if not with more reason invoked by petitioners against respondent by virtue of the latter's failure to assert his alleged title against petitioners for 30 to 60 years.

Respondent court failed to appreciate that these are vital genuine issues of fact which would materially affect the outcome of the case and therefore gravely erred in ruling that "summary judgment is proper as there is no genuine issue as to any material fact." Decision set aside.

Separate Opinions

TEEHANKEE, J., concurring:

I fully concur and wish only to stress that given the circumstances that petitioner Felipa Faja had been admittedly in possession of the property prior to the filing of respondent's complaint for 30 years and according to petitioners that their peaceful, continuous adverse possession in the concept of owner had run for over 60 years, during which time they had declared the same and religiously paid the taxes thereon; that respondent and his predecessors allegedly did not possess the property for a single moment; that respondent allegedly obtained title to the property through fraud deceit and misrepresentation and without the required personal notice on petitioners as actual occupants; the very prescription and/or laches wrongfully sought to be applied by respondent court (to justify the summary judgment against petitioners) may be equally, if not with more reason invoked by petitioners against respondent by virtue of the latter's failure to assert his alleged title against petitioners for 30 to 60 years.

Respondent court failed to appreciate that these are vital genuine issues of fact which would materially affect the outcome of the case and therefore gravely erred in ruling that "summary judgment is proper as there is no genuine issue as to any material fact." Decision set aside.

Footnotes

1 Revised Rules of Court, Rule 34, Summary Judgments —

2 pp. 19-26, rollo.

3 pp. 27-31, Ibid.

4 p. 32, Ibid.

5 p. 34, Ibid.

6 39-44, Ibid.

7 pp. 46-50, Ibid.

8 p. 53, Ibid.

9 p. 77 Ibid. The Eight Division was composed of Justices Emilio A. Gancayco, Mama D. Busran, and Samuel F. Reyes.

10 Sapto, et al. vs. Fabiana, per J.B.L. Reyes, J., (1958), 103 Phil. 683, 687, citing 44 Am. Jur. p. 47; Cooper vs. Rhea, 39 L.R.A. 930; Inland Empire Land Co. vs. Grant County, 138 Wash. 439, 245, Pac. 14.

11 44 Am. Jur. p. 47, cited in Sapto, et al. vs. Fabiana, supra, p. 687.

12 See also Philippine Commercial & Industrial Bank vs. Villalva supra., p.39.

13 See also Gatchalian vs. Pavilin, et al., per J.B.L. Reyes, J., 116 Phil. 819.

14 See also Efrencia Tamo vs. Hon. Leopoldo B. Gironella, et al., L-41714 October 29, 1976.