48. HEIRS OF ENRIQUE DIAZ vs.

VIRATA
G. R. No. 162037
August 7, 2006
FACTS
In 1959, Antenor bought, by installments, from Miguela Crisologo, in good faith
and for value, two parcels of land located in Palico, Imus, Cavite, covered by
TCTs No. (T-3855) RT-2633 and NO. (T-11171) RT-1228, which are registered
with the Registry of Deeds of Cavite. Consequently, TCT Nos. 517 and 518 were
issued in the formers name upon full payment of those lots. These lots were
then partitioned by Antenor into several lots, and titles were issued again in
Antenors favor, as follows: TCT Nos. 4983-4986 and 5027-5033. In 1992,
Enrique filed a claim with the Department of Environment and Natural
Resources (DENR), alleging that he and his predecessors-in-interest had been in
continuous possession of the same lots owned by Antenor, thereby creating a
cloud which may be prejudicial to the titles issued in the name of Antenor, and
now managed by his Estate. Enrique had fenced the lot and used it as a
driveway.
In his Answer with Counter-Claim, Enrique contended that the fence and the
driveway were located within the boundaries of his and his heirs exclusive
property per TCT Nos. T-304191 and T-66120, and that his predecessors-ininterest have been in possession of and occupied the said realty since time
immemorial, among others. He also asserted that Antenor disturbed their
peaceful and actual possession sometime in 1962 when Antenor claimed a
portion thereof after allegedly buying the same from Miguela Crisologo.
Enrique, invoking laches, posited that for almost 27 years after the dismissal of
the action for reconveyance, the heirs of Antenor were silent, while he was in
actual and continuous possession of the disputed properties in the character and
concept of an owner, until again, his possession is disturbed by the suit. He
pointed out that respondents failure or neglect for an unreasonable and
unexplained length of time to assert her right, created a presumption that she had
abandoned or declined to assert said right.
In January 1997, the relocation survey conducted showed that the driveway was
truly outside Enriques property. During the hearing, petitioners, through
counsel, manifested that they will present their own surveyor who will testify that
the improvements made on the said lot are within the boundaries of their
property, however, they failed to present such surveyor. In September of the
same year, Enrique in his Motion for Leave To File An Amended Answer stated,
among others, that he discovered a certification issued by the Register of Deeds
of Cavite signifying that TCT No. T-11171 (RT-1228), in Miguela Crisologos
name, appeared to have been reconstituted but nothing is recorded in the
Primary Entry Book of said Registry pertaining to such administrative
reconstitution, thereby affecting not only Crisologos title over the same, but
also Antenors, as purchaser thereof. The court denied said motion holding that
it is a collateral attack on the title which can only be done in a proceeding
precisely brought for that purpose.
The trial court upheld the validity of the titles in the name of Antenor and
declared them as the only official titles to the property and ruled as void and
illegal the claim of Diaz and his possession of some portions thereof. The Court
of Appeals held that petitioners reliance on a certification issued by the Register
of Deeds was an indirect attack on the said titles and that laches is inapplicable
because Antenor, as the registered owner, was within his rights to demand the
return of the properties at any time as the possession of the petitioners was
unauthorized.
ISSUE
Whether or not the claimed ownership of the disputed lot by the heirs of
Enrique Diaz constituted a cloud adverse to the titles of the same realty owned
by Antenor Virata.
RULING
Respondent fully satisfied the requisites of the law for the filing of the action to
quiet title.
Under Art. 476 and 477, NCC, an action to quiet title can be availed of when
there exists a cloud upon the title. The party bringing the action must have a
legal or an equitable title to the real property subject of the action and the alleged
cloud on his title must be shown to be in fact invalid. For such to prosper, two
indispensable requisites must concur, namely: (1) the plaintiff or complainant has
a legal or an equitable title to or interest in the real property subject of the action;
and (2) the deed, claim, encumbrance or proceeding claimed to be casting cloud
on his title must be shown to be in fact invalid or inoperative despite its prima
facie appearance of validity or legal efficacy.
Anteros certificates of title, as found by the trial court and sustained by the
appellate court, were issued as early as 22 October 1959. It is well-settled that a
certificate of title serves as evidence of an indefeasible and incontrovertible title

to the property in favor of the person whose name appears therein. It becomes
the best proof of ownership of a parcel of land. Meanwhile, although Enrique
possessed certificates of title over certain portions of the subject properties, these
were issued only on 7 March 1973 and 6 March 1991. Well-established is the
principle that the person holding a prior certificate is entitled to the land as
against a person who relies on a subsequent certificate. This rule refers to the
date of the certificate of title. Absent any muniment of title issued prior to 1959
in favor of Enrique, et al. which could prove their ownership over the contested
lots, the Court declares their claim over the properties as void.
On laches, the Court ruled that for the same to apply, it must be shown that
there was lack of knowledge or notice on the part of the defendant that
complainant would assert the right in which he bases his suit. Petitioners cannot
be without knowledge of respondents claims over the subject properties as even
prior to 1969, Antenor filed an action for recovery of possession against Enrique.
On 16 October 1969, the CFI of Cavite dismissed the case without prejudice to
the filing of a subsequent action. The dismissal without prejudice was adequate
to apprise petitioners that an action to assert respondents rights was
forthcoming.
Republic vs. Nillas (512 SCRA 286) Failure of administrative authorities
to issue decree cannot oust prevailing party from ownership of land
The provision lays down the procedure that interposes between the rendition
of the judgment and the issuance of the certificate of title. No obligation
whatsoever is imposed by Section 39 on the prevailing applicant or oppositor
even as a precondition to the issuance of the title. The obligations provided in
the Section are levied on the land court (that is to issue an order directing the
Land Registration Commissioner to issue in turn the corresponding decree of
registration), its clerk of court (that is to transmit copies of the judgment and
the order to the Commissioner), and the Land Registration Commissioner
(that is to cause the preparation of the decree of registration and the
transmittal thereof to the Register of Deeds). All these obligations are
ministerial on the officers charged with their performance and thus generally
beyond discretion of amendment or review.
The failure on the part of the administrative authorities to do their part in the
issuance of the decree of registration cannot oust the prevailing party from
ownership of the land. Neither the failure of such applicant to follow up with
said authorities can. The ultimate goal of our land registration system is
geared towards the final and definitive determination of real property
ownership in the country, and the imposition of an additional burden on the
owner after the judgment in the land registration case had attained finality
would simply frustrate such goal.

Spouses NOEL and JULIE ABRIGO, petitioners, vs. ROMANA DE VERA,

respondent. G.R. No. 154409, June 21, 2004

Rule on Double Sales: Between two buyers of the same immovable

property registered under the Torrens system, the law gives ownership
priority to (1) the first registrant in good faith; (2) then, the first
possessor in good faith; and (3) finally, the buyer who in good faith
presents the oldest title. This provision, however, does not apply if the
property is not registered under the Torrens system.
Facts: On May 27, 1993, Gloria Villafania sold a house and lot covered by a
Tax Declaration to Rosenda Tigno-Salazar and Rosita Cave-Go. The said
sale became a subject of a suit for annulment of documents between the
vendor and the vendees. The RTC rendered judgment approving the
Compromise Agreement submitted by the parties. Villafania was given
one year to buy back the house and lot. Gloria Villafania failed to buy back
the house and lot. Unknown, however to Rosenda Tigno-Salazar and
Rosita Cave-Go, Gloria Villafania obtained a free patent over the parcel of
land involved. On October 16, 1997, Rosenda Tigno-Salazar and Rosita
Cave-Go, sold the house and lot to the herein [Petitioner-Spouses Noel
and Julie Abrigo]. On October 23, 1997, Gloria Villafania sold the same
house and lot to Romana de Vera x x x. Romana de Vera registered the
sale and as a consequence, TCT No. 22515 was issued in her name. On
November 21, 1997, petitioners filed a case for the annulment of
documents, injunction, preliminary injunction, restraining order and
damages against respondent and Gloria Villafania. The lower court
rendered the assailed Decision dated January 4, 1999, awarding the
properties to [petitioners] as well as damages. Both parties appealed to
the CA. The CA issued its March 21, 2002 Amended Decision, finding
Respondent De Vera to be a purchaser in good faith and for value. The
appellate court ruled that she had relied in good faith on the Torrens title
of her vendor and must thus be protected. Hence, this Petition.

Issue: Who between petitioner-spouses and respondent has a better right

to the property.
Held: Respondent Romana De Vera. Petitioners contend that Gloria
Villafania could not have transferred the property to Respondent De Vera
because it no longer belonged to her. They further claim that the sale
could not be validated, since respondent was not a purchaser in good
faith and for value. Law on Double Sale Article 1544 of the Civil Code
states the law on double sale. Otherwise stated, the law provides that a
double sale of immovables transfers ownership to (1) the first registrant
in good faith; (2) then, the first possessor in good faith; and (3) finally, the
buyer who in good faith presents the oldest title. There is no ambiguity in
the application of this law with respect to lands registered under the
Torrens system. In the instant case, both Petitioners Abrigo and
respondent registered the sale of the property. Since neither petitioners
nor their predecessors (Tigno-Salazar and Cave-Go) knew that the
property was covered by the Torrens system, they registered their
respective sales under Act 3344. For her part, respondent registered the
transaction under the Torrens system because, during the sale, Villafania
had presented the transfer certificate of title (TCT) covering the property.
Respondent De Vera contends that her registration under the orrens
system should prevail over that of petitioners who recorded theirs under
Act 3344. De Vera relies on the following insight of Justice Edgardo L.
Paras: x x x If the land is registered under the Land Registration Act (and
has therefore a Torrens Title), and it is sold but the subsequent sale is
registered not under the Land Registration Act but under Act 3344, as
amended, such sale is not considered REGISTERED, as the term is used
under Art. 1544 x x x. Soriano v. Heirs of Magali held that registration
must be done in the proper registry in order to bind the land. Since the
property in dispute in the present case was already registered under the
Torrens system, petitioners registration of the sale under Act 3344 was
not effective for purposes of Article 1544 of the Civil Code. Under Act No.
3344, registration of instruments affecting unregistered lands is without
prejudice to a third party with a better right. The aforequoted phrase has
been held by this Court to mean that the mere registration of a sale in
ones favor does not give him any right over the land if the vendor was
not anymore the owner of the land having previously sold the same to
somebody else even if the earlier sale was unrecorded. Petitioners cannot
validly argue that they were fraudulently misled into believing that the
property was unregistered. A Torrens title, once registered, serves as a
notice to the whole world. All persons must take notice, and no one can
plead ignorance of the registration. Good-Faith Requirement Knowledge
gained by the second buyer of the first sale defeats his rights even if he is
first to register the second sale, since such knowledge taints his prior
registration with bad faith. This is the price exacted by Article 1544 of the
Civil Code for the second buyer being able to displace the first buyer; that
before the second buyer can obtain priority over the first, he must show
that he acted in good faith throughout (i.e. in ignorance of the first sale
and of the first buyers rights) ---- from the time of acquisition until the
title is transferred to him by registration, or failing registration, by
delivery of possession. As can be gathered from the foregoing,
constructive notice to the second buyer through registration under Act
3344 does not apply if the property is registered under the Torrens
system, as in this case. "The registration contemplated under Art. 1544
has been held to refer to registration under Act 496 Land Registration Act
(now PD 1529) which considers the act of registration as the operative
act that binds the land (see Mediante vs. Rosabal, 1 O.G. [12] 900, Garcia
vs. Rosabal, 73 Phil 694). On lands covered by the Torrens System, the
purchaser acquires such rights and interest as they appear in the
certificate of title, unaffected by any prior lien or encumbrance not noted
therein. The purchaser is not required to explore farther than what the
Torrens title, upon its face, indicates. The only exception is where the
purchaser has actual knowledge of a flaw or defect in the title of the seller
or of such liens or encumbrances which, as to him, is equivalent to
registration (see Sec. 39, Act 496; Bernales vs. IAC, G.R. 75336, 18 October
1988; Hernandez vs. Sales, 69 Phil 744; Tajonera vs. Court of Appeals, L26677, 27 March 1981)," Respondent in Good Faith The Court of Appeals
examined the facts to determine whether respondent was an innocent
purchaser for value. After its factual findings revealed that Respondent
De Vera was in good faith. WHEREFORE, the Petition is DENIED and the
assailed Decision AFFIRMED.
CARMELITA FUDOT, vs CATTLEYA LAND, INC., VELASCO, JR.,
Facts:

Sometime in July 1992, Cattleya Land, Inc. (hereinafter referred to as

respondent) asked someone to check, on its behalf, the titles of nine (9)
lots, the subject land included, which it intended to buy from the spouses
Troadio and Asuncion Tecson. Finding no defect on the titles, respondent
purchased the nine lots through a Deed of Conditional Sale on 6
November 1992. Subsequently, on 30 August 1993, respondent and the
Tecsons executed a Deed of Absolute Sale over the same properties. The
Deed of Conditional Sale and the Deed of Absolute Sale were registered
with the Register of Deeds on 06 November 1992 and 04 October 1993,
respectively. The Register of Deeds refused to actually annotate the deed
of sale on the titles because of the existing notice of attachment pending
before the Regional Trial Court of Bohol. The attachment was eventually
cancelled by virtue of a compromise agreement between the Tecsons and
their attaching creditor which was brokered by respondent. Titles to six
(6) of the nine (9) lots were issued, but the Register of Deeds refused to
issue titles to the remaining three (3) lots , because the titles covering the
same were still unaccounted for.
Later, respondent learned that the Register of Deeds had already
registered the deed of sale in favor of petitioner and issued a new title
herein.
The respondent filed its Complaintfor Quieting Of Title &/Or Recovery Of
Ownership, Cancellation Of Title With Damages before the Regional Trial
Court of Tagbilaran City.
Issue:
Is the issuance of Deed of Sale valid?
Held: On 31 October 2001, the trial court rendered its decision: (i)
quieting the title or ownership of the subject land in favor of respondent;
(ii) declaring the deed of sale between petitioner and spouses Tecson
invalid; (iii) ordering the registration of the subject land in favor of
respondent; (iv) dismissing respondents claim for damages against the
Register of Deeds for insufficiency of evidence; (v) dismissing Asuncions
claim for damages against petitioner for lack of factual basis; and (vi)
dismissing petitioners counterclaim for lack of the required
preponderance of evidence.
Knowledge gained by first buyer of second sale cannot defeat first buyers
rights, except where the second buyer registers in good faith the second sale
ahead of the first. It is essential to merit the protection of Art. 1544 of the
New Civil Code, that the second realty buyer must act in good faith in
registering his deed of sale.

G.R. No. 158682 January 31, 2005 SPOUSES BIENVENIDO

R. MACADANGDANG and VIRGINIA C. MACADANGDANG,
petitioners vs. SPOUSES RAMON MARTINEZ and GLORIA F.
MARTINEZ, respondents.
Facts The Macadangdang spouses, as petitioners, assail the
October 25, 2001 decision of the Court of Appeals in modifying
the November 13, 1990 decision of the Regional Trial Court.
The Macadangdang spouses bought a house and lot covered
by TCT No. 146553 in the name of Emma A. Omalin for the
purchase price of P380,000, to be paid on installment basis.
Downpayment of P5,000 and subsequent payment of
P175,000 was paid; afterwhich, Omalin executed a deed of
sale with mortgage, providing for the payment of the balance
(P200,000) in three installments. After the Macadangdang
spouses paid a total of P270,000, both parties agreed that the
remaining P110,000 shall be paid upon Omalins delivery of
the TCT. However, Omalin failed to deliver the same because
a certain Atty. Paterno Santos, acting as broker, offered to
mortgage the subject property to respondent Martinez spouses
for P200,000, presenting a clean title. Said offer was
accepted by the Martinez spouses with interest at 36% p.a.
and was duly recorded at the Registry of Deeds of Makati. The
proper annotation was made at the back of the title. Omalin
defaulted in her payments to Martinez spouses in the amount
of P114,000, incurred over the span of 1.5 years. The
Macadangdang spouses filed a criminal case for estafa against
Omalin and a combined action for specific performance,
annulment of contract and damages against the spouses
Martinez and Omalin. The Makati RTC ruled in favor of the

Macadangdang spouses, and ordered the delivery of TCT No.

146553 to Macadangdang spouses, free from encumbrance
under Entry No. 30110 of the Register of Deeds of Makati
(mortgage to respondent), upon plaintiffs payment of the
balance of P100,000. This was later modified by the Court of
Appeals, upholding the validity of the sale to Macadangdang
spouses, subject to the Martinezs spouses right to foreclose
the property for failure of Omalin to pay her indebtedness.
Issue Whether or not the Macadangdang spouses are entitled
to the land despite the fact that a prior registered mortgage
was attached to it.
Ruling No. The assailed decision of the appellate court is
neither absurd nor unjust. The registered mortgage contract of
the Martinez spouses has given them the superior right, not as
owners but only as mortgagees. Consequently, they are
entitled to be paid the amounts due them under the real estate
mortgage registered in their favor. In the event Omalin, as
mortgagor, fails to pay the mortgage obligation or, should any
party, for that matter, who may have an interest in the
mortgaged property like the petitioners herein fail to redeem it
from the mortgagees, the latter, as declared by the Court of
Appeals, may enforce their rights against the property by
foreclosing on the mortgage, regardless of who its owner may
be, considering that the registered mortgage attaches to the
property. 1
Ratio Between two transactions concerning the same parcel of
land, the registered transaction prevails over the earlier
unregistered right. The act of registration operates to convey
and affect the registered land so that a bonafide purchaser of
such land acquires good title as against a prior transferee, if
such prior transfer was unrecorded. Registration of the deed is
the effectual act which binds the land insofar as third persons
are concerned. Prior registration of a lien creates a preference
as the act of registration is the operative act that conveys and
affects the land. Considering that the prior sale of the subject
property to the Macadangdang spouses was not registered, it
was the registered mortgage to the spouses Martinez that was
valid and effective. For sure, it was binding on Omalin and, for
that matter, even on the Macadangdang spouses, the parties
to the prior sale. The Martinez spouses were also considered
as innocent mortgagees for value, and are therefore not
required to look beyond what appears on the face of the
certificate of title of the vendor, since the certificate of title is in
the name of the mortgagor when the land was mortgaged.
Where innocent third persons rely on the lack of defect of a
certificate of title and acquire rights over the property, the Court
cannot disregard such rights. Otherwise, public confidence in
the certificate of title and ultimately, in the entire Torrens
system will be impaired, for every one dealing with registered
property will have to inquire at every instance whether the title
has been regularly or irregularly issued. On this note, being
innocent registered mortgagees for value, the Martinez
spouses acquired a superior right over the property

( PADILLA JR VS PHIL . PRODUCERS COOPERATIVE

FACTS: Petitioner and his wife are the registered owners of real
properties. Respondent is a marketing cooperative which had a
money claim against petitioner. Respondent filed a civil case
against petitioner for collection of a sum of money in the Regional
Trial Court of Bacolod City. But herein petitioner failed to file an
answer, thus was declared in default and the trial court rendered
judgment in favor of respondent. The court issued a writ of
execution and the properties were levied. The lots were
auctioned and the respondent was the only bidder. A certificate
of sale was issued to respondent and such was registered in the
Register of Deeds. Petitioner failed to exercise his right of

redemption (12-month period), thus a writ of possession was

issued to cause the delivery of the physical possession of the
properties in favor of respondent. Respondent filed a motion to
direct the Register of Deeds to issue new titles over the
properties in its name, alleging that the Register of Deeds (RD) of
Bago City would not issue new titles (in respondents name)
unless the owners copies were first surrendered to him.
Respondent countered that such surrender was impossible
because this was an involuntary sale and the owners copies were
with petitioner. The trial court granted the motion and the
appellate court affirmed it.
ISSUE: (1) whether or not respondents right to have new titles
issued in its name is now barred by prescription
(2) whether or not the motion in question is the proper remedy
for cancelling petitioners certificates of title and new ones issued
in its name.
HELD: On the first issue, we rule that the respondents right to
petition the court for the issuance of new certificates of title has
not yet prescribed. It is settled that execution is enforced by the
fact of levy and sale. The right acquired by the purchaser at an
execution sale is inchoate and does not become absolute until
after the expiration of the redemption period without the right of
redemption having been exercised. The fact of levy and sale
constitutes execution, and not the action for the issuance of a new
title. Here, because the levy and sale of the properties took place
in June and July of 1990, respectively, or less than a year after the
decision became final and executory, the respondent clearly
exercised its rights in timely fashion. On the other hand, the issue
of whether to acquire new titles by mere motion or through a
separate petition is an entirely different matter. Petitioner is
correct in assailing as improper respondents filing of a mere
motion for the cancellation of the old TCTs and the issuance of
new ones as a result of petitioners refusal to surrender his
owners duplicate TCTs. Indeed, this called for a separate
cadastral action initiated via petition. The proper course of action
was to file a petition in court, rather than merely move, for the
issuance of new titles. Section 75 of PD 1529 provides: Sec. 75.
Application for new certificate upon expiration of redemption
period.Upon the expiration of the time, if any, allowed by law
for redemption after the registered land has been sold on
execution, or taken or sold for the enforcement of a lien of any
description, except a mortgage lien, the purchaser at such sale or
anyone claiming under him may petition the court for the entry
of a new certificate to him. Before the entry of a new certificate of
title, the registered owner may pursue all legal and equitable
remedies to impeach or annul such proceedings. It is clear that
PD 1529 provides the solution to respondents quandary. The
reasons behind the law make a lot of sense; it provides due
process to a registered landowner (in this case the petitioner)
and prevents the fraudulent or mistaken conveyance of land, the
value of which may exceed the judgment obligation. In any event,
respondent can still file the proper petition with the cadastral
court for the issuance of new titles in its name. Wherefore, the
petition is granted. ATTY G: Steps leading to issuance of title
pursuant to levy on execution: 1. Levy on execution (issued by
court; annotated) 2. Certificate of sale (result of auction sale;
right of highest bidder is still inchoate because there is right of
redemption available to judgment debtor to redeem property
within 12 months; take note that at this stage, ROD is already
mandated to notify the registered owner to surrender the
duplicates copy for the purpose of registration; even if ROD fails
to comply with required notification, the validity of the
involuntary transaction presented for registration is valid
because entry in the primary entry book is sufficient to comply
with the requirement) 3. Sheriffs Final Deed of Sale (after lapse
of redemption period; highest bidder is considered to have
absolute title over property) 4. File petition in court for issuance
of new certificate of title (pursuant to Sec 75 of pd 1529)