G.R. No.

129760 December 29, 1998

RICARDO CHENG, petitioner,
vs.
RAMON B. GENATO and ERNESTO R. DA JOSE & SOCORRO DA JOSE, respondents.

MARTINEZ, J.:
This petition for review on certiorari seeks to annul and set aside the Decision of the Court of
Appeals (CA) 1 dated July 7, 1997 in CA-G.R. No. CV No. 44706 entitled "Ricardo Cheng, plaintiffappellee vs. Ramon B. Genato, defendant-appellant, Ernesto R. Da Jose & Socorro B. Da Jose,
Intervenors-Appellants" which reversed the ruling of the Regional Trial Court, Branch 96 of Quezon City
dated January 18, 1994. The dispositive portion of the CA Decision reads:
WHEREFORE, based on the foregoing, appealed decision is hereby REVERSED
and SET ASIDE and judgment is rendered ordering;
1. The dismissal of the complaint;
2. The cancellation of the annotations of the defendant-appellant's Affidavit to Annul
Contract to Sell and plaintiff-appellee's Notice of Adverse Claim in the subject TCT's,
namely, TCT No. T-76.196 (M) and TCT No. T-76.197 (M);
3. Payment by the intervenors-appellants of the remaining balance of the purchase
price pursuant to their agreement with the defendant-appellant to suspend
encashment of the three post-dated checks issued since 1989.
4. Ordering the execution by the defendant-appellant Genato of the Deed of Absolute
Sale over the subject two lots covered by TCT No. T-76.196 (M) and TCT No. T76.197 (M) in favor of intervenors-appellants Spouses Da Jose;
5. The return by defendant-appellant Genato of the P50,000.00 paid to him by the
plaintiff-appellee Cheng, and
6. Payment by plaintiff-appellee Cheng of moral damages to herein intervenorsappellants Da Jose of P100,000.00, exemplary damages of P50,000.00, attorney's
fees of P50,000.00, and costs of suit; and to defendant-appellant, of P100,000.00 in
exemplary damages, P50,000.00 in attorney's fees. The amounts payable to the
defendant-appellant may be compensated by plaintiff appellee with the amount
ordered under the immediately foregoing paragraph which defendant-appellant has
to pay the plaintiff-appellee.
SO ORDERED. 2

The antecedents of the case are as follows:

Respondent Ramon B. Genato (Genato) is the owner of two parcels of land located at Paradise
Farms, San Jose del Monte, Bulacan covered by TCT No. T-76.196 (M) 3 and TCT No. T-76.197
(M) 4 with an aggregate area of 35,821square meters, more or less.
On September 6, 1989, respondent Genato entered into an agreement with respondent-spouses
Ernesto R. Da Jose and Socorro B. Da Jose (Da Jose spouses) over the above-mentioned two
parcels of land. The agreement culminated in the execution of a contract to sell for which the
purchase price was P80.00 per square meter. The contract was in a public instrument and was duly
annotated at the back of the two certificates of title on the same day. Clauses 1and 3 thereof
provide:
1. That the purchase price shall be EIGHTY (P80.00) PESOS, Philippine Currency
per square meter, of which the amount of FIFTY THOUSAND (P50,000.00) PESOS
shall be paid by the VENDEE to the VENDOR as partial down payment at the time of
execution of this Contract to Sell.
xxx xxx xxx
3. That the VENDEE, Thirty (30) DAYS after the execution of this contract, and only
after having satisfactorily verified and confirmed the truth and authenticity of
documents, and that no restrictions, limitations, and developments imposed on
and/or affecting the property subject of this contract shall be detrimental to his
interest, the VENDEE shall pay to the VENDOR, NINE HUNDRED FIFTY
THOUSAND (P950,00.00) PESOS. Philippine Currency, representing the full
payment of the agreed Down Payment, after which complete possession of the
property shall be given to the VENDEE to enable him to prepare the premises and
any development therein.
On October 4, 1989, the Da Jose spouses, not having finished verifying the titles mentioned in
clause 3 as aforequoted, asked for and was granted by respondent Genato an extension of another
30 days or until November 5, 1989. However, according to Genato, the extension was granted on
condition that a new set of documents is made seven (7) days from October 4, 1989. 6 This was
denied by the Da Jose spouses.
Pending the effectivity of the aforesaid extension period, and without due notice to the Da Jose
spouses, Genato executed an Affidavit to Annul the Contract to Sell, 7 on October 13, 1989. Moreover,
no annotation of the said affidavit at the back of his titles was made right away. The affidavit
contained, inter alia, the following paragraphs;
xxx xxx xxx
That it was agreed between the parties that the agreed downpayment of
P950,000.00 shall be paid thirty (30) days after the execution of the Contract, that is
on or before October 6, 1989;

The supposed VENDEES failed to pay the said full downpayment even up to this
writing, a breach of contract;
That this affidavit is being executed to Annul the aforesaid Contract to Sell for the
vendee having committed a breach of contract for not having complied with the
obligation as provided in the Contract to Sell; 8
On October 24, 1989, herein petitioner Ricardo Cheng (Cheng) went to Genato's residence and
expressed interest in buying the subject properties. On that occasion, Genato showed to Ricardo
Cheng copies of his transfer certificates of title and the annotations at the back thereof of his
contract to sell with the Da Jose spouses. Genato also showed him the aforementioned Affidavit to
Annul the Contract to Sell which has not been annotated at the back of the titles.
Despite these, Cheng went ahead and issued a check for P50,000.00 upon the assurance by
Genato that the previous contract with the Da Jose spouses will be annulled for which Genato
issued a handwritten receipt (Exh. "D"), written in this wise:
10/24/89
Received from Ricardo Cheng
the Sum of Fifty Thousand Only (P50.000-)
as partial for T-76196 (M)
T-76197 (M) area 35.821 Sq.m.
Paradise Farm, Gaya-Gaya, San Jose Del Monte
P70/m2 Bulacan
plus C. G. T. etc.
Check # 470393 (SGD.) Ramon B. Genato
10/24/89 9
On October 25, 1989, Genato deposited Cheng's check. On the same day, Cheng called up Genato
reminding him to register the affidavit to annul the contract to sell. 10
The following day, or on October 26, 1989, acting on Cheng's request, Genato caused the
registration of the Affidavit to Annul the Contract to Sell in the Registry of Deeds, Meycauayan,
Bulacan as primary entry No. 262702. 11
While the Da Jose spouses were at the Office of the Registry of Deeds of Meycauayan, Bulacan on
October 27, 1989, they met Genato by coincidence. It was only then that the Da Jose spouses

discovered about the affidavit to annul their contract. The latter were shocked at the disclosure and
protested against the rescission of their contract. After being reminded that he (Genato) had given
them (Da Jose spouses) an additional 30-day period to finish their verification of his titles, that the
period was still in effect, and that they were willing and able to pay the balance of the agreed down
payment, later on in the day, Genato decided to continue the Contract he had with them. The
agreement to continue with their contract was formalized in a conforme letter dated October 27,
1989.
Thereafter, Ramon Genato advised Ricardo Cheng of his decision to continue his contract with the
Da Jose spouses and the return of Cheng's P50,000.00 check. Consequently, on October 30, 1989,
Cheng's lawyer sent a letter 12 to Genato demanding compliance with their agreement to sell the
property to him stating that the contract to sell between him and Genato was already perfected and
threatening legal action.
On November 2, 1989, Genato sent a letter 13 to Cheng (Exh. "6") enclosing a BPI Cashier's Check for
P50,000.00 and expressed regret for his inability to "consummate his transaction" with him. After having
received the letter of Genato on November 4, 1989, Cheng, however, returned the said check to the
former via RCPI telegram 14 dated November 6, 1989, reiterating that "our contract to sell your property
had already been perfected."
Meanwhile, also on November 2, 1989, Cheng executed an affidavit of adverse claim
annotated on the subject TCT's.

15

and had it

On the same day, consistent with the decision of Genato and the Da Jose spouses to continue with
their Contract to Sell of September 6, 1989, the Da Jose spouses paid Genato the complete down
payment of P950,000.00 and delivered to him three (3) postdated checks (all dated May 6, 1990, the
stipulated due date) in the total amount of P1,865,680.00 to cover full payment of the balance of the
agreed purchase price. However, due to the filing of the pendency of this case, the three (3)
postdated checks have not been encashed.
On December 8, 1989, Cheng instituted a complaint 16 for specific performance to compel Genato to
execute a deed of sale to him of the subject properties plus damages and prayer for preliminary
attachment. In his complaint, Cheng averred that the P50,000.00 check he gave was a partial payment to
the total agreed purchase price of the subject properties and considered as an earnest money for which
Genato acceded. Thus, their contract was already perfected.
In Answer 17 thereto, Genato alleged that the agreement was only a simple receipt of an option-bid
deposit, and never stated that it was a partial payment, nor is it an earnest money and that it was subject
to condition that the prior contract with the Da Jose spouses be first cancelled.
The Da Jose spouses, in their Answer in Intervention, 18 asserted that they have a superior right to the
property as first buyers. They alleged that the unilateral cancellation of the Contract to Sell was without
effect and void. They also cited Cheng's bad faith as a buyer being duly informed by Genato of the
existing annotated Contract to Sell on the titles.
After trial on the merits, the lower court ruled that the receipt issued by Genato to Cheng unerringly
meant a sale and not just a priority or an option to buy. It cannot be true that the transaction was

subjected to some condition or reservation, like the priority in favor of the Da Jose spouses as first
buyer because, if it were otherwise, the receipt would have provided such material condition or
reservation, especially as it was Genato himself who had made the receipt in his own hand. It also
opined that there was a valid rescission of the Contract to Sell by virtue of the Affidavit to Annul the
Contract to Sell. Time was of the essence in the execution of the agreement between Genato and
Cheng, under this circumstance demand, extrajudicial or judicial, is not necessary. It falls under the
exception to the rule provided in Article 1169 19 of the Civil Code. The right of Genato to unilaterally
rescind the contract is said to be under Article 1191 20 of the Civil Code. Additionally, after reference was
made to the substance of the agreement between Genato and the Da Jose spouses, the lower court also
concluded that Cheng should be preferred over the intervenors-Da Jose spouses in the purchase of the
subject properties. Thus, on January 18, 1994 the trial court rendered its decision the decretal portion of
which reads:
WHEREFORE, judgment is hereby rendered:
1. Declaring the contract to sell dated September 6, 1989 executed between
defendant Ramon Genato, as vendor, and intervenors Spouses Ernesto and Socorro
Da Jose, as vendees, resolved and rescinded in accordance with Art. 1191, Civil
Code, by virtue of defendant's affidavit to annul contract to sell dated October 13,
1989 and as the consequence of intervenors' failure to execute within seven (7) days
from October 4, 1989 another contract to sell pursuant to their mutual agreement
with defendant;
2. Ordering defendant to return to the intervenors the sum of P1,000,000.00, plus
interest at the legal rate from November 2, 1989 until full payment;
3. Directing defendant to return to the intervenors the three (3) postdated checks
immediately upon finality of this judgment;
4. Commanding defendant to execute with and in favor of the plaintiff Ricardo Cheng,
as vendee, a deed of conveyance and sale of the real properties described and
covered in Transfer Certificates of Title No. T-76-196 (M) and T-76.197 (M) of the
Registry of Deeds of Bulacan, Meycauayan Branch, at the rate of P70.000/square
meter, less the amount of P50,000.00 alreaddy paid to defendant, which is
considered as part of the purchase price, with the plaintiff being liable for payment of
the capital gains taxes and other expenses of the transfer pursuant to the agreement
to sell dated October 24, 1989; and
5 Ordering defendant to pay the plaintiff and the intervenors as follows:
a/ P50,000.00, as nominal damages, to plaintiff;
b/ P50,000.00, as nominal damages, to intervenors;
c/ P20,000.00, as and for attorney's fees, to plaintiff;

d/ P20,000.00, as and for attorney's fees, to

intervenors; and
e/ Cost of the suit.
xxx xxx xxx
Not satisfied with the aforesaid decision, herein respondents Ramon Genato and Da Jose spouses
appealed to the court a quo which reversed such judgment and ruled that the prior contract to sell in
favor of the Da Jose spouses was not validly rescinded; that the subsequent contract to sell between
Genato and Cheng, embodied in the handwritten receipt, was without force and effect due to the
failure to rescind the prior contract; and that Cheng should pay damages to the respondents herein
being found to be in bad faith.
Hence this petition. 21
This petition for review, assails the Court of Appeals' Decision on the following grounds: (1) that the
Da Jose spouses' Contract to Sell has been validly rescinded or resolved; (2) that Ricardo Cheng's
own contract with Genato was not just a contract to sell but one of conditional contract of sale which
gave him better rights, thus precluding the application of the rule on double sales under Article 1544,
Civil Code; and (3) that, in any case, it was error to hold him liable for damages.
The petition must be denied for failure to show that the Court of Appeals committed a reversible error
which would warrant a contrary ruling.
No reversible error can be ascribed to the ruling of the Court of Appeals that there was no valid and
effective rescission or resolution of the Da Jose spouses Contract to Sell, contrary to petitioner's
contentions and the trial court's erroneous ruling.
In a Contract to Sell, the payment of the purchase price is a positive suspensive condition, the failure
of which is not a breach, casual or serious, but a situation that prevents the obligation of the vendor
to convey title from acquiring an obligatory force. 22 It is one where the happening of the event gives rise
to an obligation. Thus, for its non-fulfillment there will be no contract to speak of, the obligor having failed
to perform the suspensive condition which enforces a juridical relation. In fact with this circumstance,
there can be no rescission of an obligation that is still non-existent, the suspensive condition not having
occurred as yet. 23 Emphasis should be made that the breach contemplated in Article 1191 of the New
Civil Code is the obligor's failure to comply with an obligation already extant, not a failure of a condition to
render binding that obligation. 24
Obviously, the foregoing jurisprudence cannot be made to apply to the situation in the instant case
because no default can be ascribed to the Da Jose spouses since the 30-day extension period has
not yet expired. The Da Jose spouses' contention that no further condition was agreed when they
were granted the 30-days extension period from October 7, 1989 in connection with clause 3 of their
contract to sell dated September 6, 1989 should be upheld for the following reason, to wit; firstly, If
this were not true, Genato could not have been persuaded to continue his contract with them and
later on agree to accept the full settlement of the purchase price knowing fully well that he himself

imposed such sine qua non condition in order for the extension to be valid; secondly, Genato could
have immediately annotated his affidavit to annul the contract to sell on his title when it was
executed on October 13, 1989 and not only on October 26, 1989 after Cheng reminded him of the
annotation; thirdly, Genato could have sent at least a notice of such fact, there being no stipulation
authorizing him for automatic rescission, so as to finally clear the encumbrance on his titles and
make it available to other would be buyers. It likewise settles the holding of the trial court that
Genato "needed money urgently."
Even assuming in gratia argumenti that the Da Jose spouses defaulted, as claimed by Genato, in
their Contract to Sell, the execution by Genato of the affidavit to annul the contract is not even called
for. For with or without the aforesaid affidavit their non-payment to complete the full downpayment of
the purchase price ipso facto avoids their contract to sell, it being subjected to a suspensive
condition. When a contract is subject to a suspensive condition, its birth or effectivity can take place
only if and when the event which constitutes the condition happens or is fulfilled. 25 If the suspensive
condition does not take place, the parties would stand as if the conditional obligation had never
existed. 26
Nevertheless, this being so Genato is not relieved from the giving of a notice, verbal or written, to the
Da Jose spouses for his decision to rescind their contract. In many cases, 27 even though we upheld
the validity of a stipulation in a contract to sell authorizing automatic rescission for a violation of its terms
and conditions, at least a written notice must be sent to the defaulter informing him of the same. The act
of a party in treating a contract as cancelled should be made known to the other. 28 For such act is always
provisional. It is always subject to scrutiny and review by the courts in case the alleged defaulter brings
the matter to the proper courts. In University of the Philippines vs. De Los Angeles, 29 this Court stressed
and we quote:
In other words, the party who deems the contract violated may consider it resolved or
rescinded, and act accordingly, without previous court action, but it proceeds at its
own risk. For it is only the final judgment of the corresponding court that will
conclusively and finally settle whether the action taken was or was not correct in law.
But the law definitely does not require that the contracting party who believes itself
injured must first file suit and wait for a judgment before taking extrajudicial steps to
protect its interest. Otherwise, the party injured by the other's breach will have to
passively sit and watch its damages accumulate during the pendency of the suit until
the final judgment of rescission is rendered when the law itself requires that he
should exercise due diligence to minimize its own damages (Civil Code, Article
2203).
This rule validates, both in equity and justice, contracts such as the one at bat, in order to avoid and
prevent the defaulting party from assuming the offer as still in effect due to the obligee's tolerance for
such non-fulfillment. Resultantly, litigations of this sort shall be prevented and the relations among
would-be parties may be preserved. Thus, Ricardo Cheng's contention that the Contract to Sell
between Genato and the Da Jose spouses was rescinded or resolved due to Genato's unilateral
rescission finds no support in this case.
Anent the issue on the nature of the agreement between Cheng and Genato, the records of this
case are replete with admissions 30 that Cheng believed it to be one of a Contract to Sell and not one of

Conditional Contract of Sale which he, in a transparent turn-around, now pleads in this Petition. This
ambivalent stance of Cheng is even noted by the appellate court, thus:

At the outset, this Court notes that plaintiff-appellee was inconsistent in

characterizing the contract he allegedly entered into. In his complaint. 31 Cheng
alleged that the P50,000.00 down payment was earnest money. And next, his
testimony 32 was offered to prove that the transaction between him and Genato on
October 24, 1989 was actually a perfected contract to sell. 33
Settled is the rule that an issue which was not raised during the trial in the court below cannot be
raised for the first time on appeal. 34 Issues of fact and arguments not adequately brought to the
attention of the trial court need not be and ordinarily will not be considered by a reviewing court as they
cannot be raised for the first time on appeal. 35 In fact, both courts below correctly held that the receipt
which was the result of their agreement, is a contract to sell. This was, in fact Cheng's contention in his
pleadings before said courts. This patent twist only operates against Cheng's posture which is indicative
of the weakness of his claim.
But even if we are to assume that the receipt, Exh. "D," is to be treated as a conditional contract of
sale, it did not acquire any obligatory force since it was subject to suspensive condition that the
earlier contract to sell between Genato and the Da Jose spouses should first be cancelled or
rescinded a condition never met, as Genato, to his credit, upon realizing his error, redeemed
himself by respecting and maintaining his earlier contract with the Da Jose spouses. In fact, a careful
reading of the receipt, Exh. "D," alone would not even show that a conditional contract of sale has
been entered by Genato and Cheng. When the requisites of a valid contract of sale are lacking in
said receipt, therefore the "sale" is neither valid or enfoceable. 36
To support his now new theory that the transaction was a conditional contract of sale, petitioner
invokes the case of Coronel vs. Court of Appeals 37 as the law that should govern their Petition. We do
not agree. Apparently, the factual milieu in Coronel is not on all fours with those in the case at bar.
In Coronel, this Court found that the petitioners therein clearly intended to transfer title to the buyer
which petitioner themselves admitted in their pleading. The agreement of the parties therein was
definitively outlined in the "Receipt of Down Payment" both as to property, the purchase price, the
delivery of the seller of the property and the manner of the transfer of title subject to the specific
condition that upon the transfer in their names of the subject property the Coronels will execute the
deed of absolute sale.
Whereas, in the instant case, even by a careful perusal of the receipt, Exh. "D," alone such kind of
circumstances cannot be ascertained without however resorting to the exceptions of the Rule on
Parol Evidence.
To our mind, the trial court and the appellate court correctly held that the agreement between Genato
and Cheng is a contract to sell, which was, in fact, petitioner connection in his pleadings before the
said courts. Consequently, both to mind, which read:

Art. 1544. If the same thing should have been sold to different vendees, the
ownership shall be transferred to the person who may have first taken possession
thereof in good faith, if it should be movable property.
Should it be immovable property, the ownership shall belong to the person acquiring
it who in good faith first recorded it in the Registry of Property.
Should there be no inscription, the ownership shall pertain to the person who in good
faith was first in possession; and in the absence thereof, to the person who presents
he oldest title, provided there is good faith.
However, a meticulous reading of the aforequoted provision shows that said law is not apropos to
the instant case. This provision connotes that the following circumstances must concur:
(a) The two (or more) sales transactions in issue must pertain to exactly the same
subject matter, and must be valid sales transactions.
(b) The two (or more) buyers at odds over the rightful ownership of the subject matter
must each represent conflicting interests; and
(c) The two (or more) buyers at odds over the rightful ownership of the subject matter
must each have bought from the very same seller.
These situations obviously are lacking in a contract to sell for neither a transfer of ownership nor a
sales transaction has been consummated. The contract to be binding upon the obligee or the vendor
depends upon the fulfillment or non-fulfillment of an event.
Notwithstanding this contrary finding with the appellate court, we are of the view that the governing
principle of Article 1544, Civil Code, should apply in this situation. Jurisprudence 38 teaches us that the
governing principle is PRIMUS TEMPORE, PORTIOR JURE (first in time, stronger in right). For not only
was the contract between herein respondents first in time; it was also registered long before petitioner's
intrusion as a second buyer. This principle only applies when the special rules provided in the aforcited
article of the Civil Code do not apply or fit the specific circumstances mandated under said law or by
jurisprudence interpreting the article.
The rule exacted by Article 1544 of the Civil Code for the second buyer to be able to displace the
first buyer are:
(1) that the second buyer must show that he acted in good faith (i.e. in ignorance of the first sale and
of the first buyer's rights) from the time of acquisition until title is transferred to him by registration or
failing registration, by delivery of possession; 39
(2) the second buyer must show continuing good faith and innocence or lack of knowledge of the
first sale until his contract ripens into full ownership through prior registration as provided by law. 40

Thus, in the case at bar, the knowledge gained by the Da Jose spouses, as first buyers, of the new
agreement between Cheng and Genato will not defeat their rights as first buyers except where
Cheng, as second buyer, registers or annotates his transaction or agreement on the title of the
subject properties in good faith ahead of the Da Jose spouses. Moreover, although the Da Jose
spouses, as first buyers, knew of the second transaction it will not bar them from availing of their
rights granted by law, among them, to register first their agreement as against the second buyer.
In contrast, knowledge gained by Cheng of the first transaction between the Da Jose spouses and
Genato defeats his rights even if he is first to register the second transaction, since such knowledge
taints his prior registration with bad faith.
"Registration", as defined by Soler and Castillo, means any entry made in the books of the registry,
including both registration in its ordinary and strict sense, and cancellation, annotation, and even
marginal notes. 41 In its strict acceptation, it is the entry made in the registry which records solemnly and
permanently the right of ownership and other real rights. 42 We have ruled 43 before that when a Deed of
Sale is inscribed in the registry of property on the original document itself, what was done with respect to
said entries or annotations and marginal notes amounted to a registration of the sale. In this light, we see
no reason why we should not give priority in right the annotation made by the Da Jose spouses with
respect to their Contract to Sell dated September 6, 1989.
Moreover, registration alone in such cases without good faith is not sufficient. Good faith must
concur with registration for such prior right to be enforceable. In the instant case, the annotation
made by the Da Jose spouses on the titles of Genato of their "Contract To Sell" more than satisfies
this requirement. Whereas in the case of Genato's agreement with Cheng such is unavailing. For
even before the receipt, Exh. "D," was issued to Cheng information of such pre-existing agreement
has been brought to his knowledge which did not deter him from pursuing his agreement with
Genato. We give credence to the factual finding of the appellate court that "Cheng himself admitted
that it was he who sought Genato in order to inquire about the property and offered to buy the
same. 44 And since Cheng was fully aware, or could have been if he had chosen to inquire, of the rights of
the Da Jose spouses under the Contract to Sell duly annotated on the transfer certificates of titles of
Genato, it now becomes unnecessary to further elaborate in detail the fact that he is indeed in bad faith in
entering into such agreement. As we have held in Leung Yee vs. F.L. Strong Machinery Co.: 45
One who purchases real estate with knowledge of a defect . . . of title in his vendor
cannot claim that he has acquired title thereto in good faith as against . . . . an
interest therein; and the same rule must be applied to one who has knowledge of
facts which should have put him upon such inquiry and investigation as might be
necessary to acquaint him with the defects in the title of his vendor. A purchaser
cannot close his eyes to facts which should put a reasonable man upon his guard,
and then claim that he acted in good faith under the belief that there was no defect in
the title of the vendor. His mere refusal to believe that such defect exists, or his willful
closing of his eyes to the possibility of the existence of a defect in his vendor's title,
will not make him an innocent purchaser for value, if it afterwards develops that the
title was in fact defective, and it appears that he had such notice of the defect as
would have led to its discovery had he acted with that measure of precaution which
may reasonably be required of a prudent man in a like situation. Good faith, or lack of
it, is in its last analysis a question of intention; but in ascertaining the intention by

which one is actuated on a given occasion, we are necessarily controlled by the

evidence as to the conduct and outward acts by which alone the inward motive may
with safety, be determined. So it is that "the honesty of intention," "the honest lawful
intent," which constitutes good faith implies a "freedom from knowledge and
circumstances which ought to put a person on inquiry," and so it is that proof of such
knowledge overcomes the presumption of good faith in which the courts always
indulge in the absence of the proof to the contrary. "Good faith, or the want of it, is
not a visible, tangible fact that can be seen or touched, but rather a state or condition
of mind which can only be judge of by actual or fancied tokens or signs." (Wilder vs.
Gilman, 55 Vt. 504, 505; Cf. Cardenas vs. Miller, 108 Cal., 250; Breaux-Renoudet,
Cypress Lumber Co. vs. Shadel, 52 La. Ann., 2094-2098; Pinkerton Bros. Co. vs.
Bromely, 119 Mich., 8, 10, 17.) (Emphasis ours)
Damages were awarded by the appellate court on the basis of its finding that petitioner "was in bad
faith when he filed the suit for specific performance knowing fully well that his agreement with
Genato did not push through. 46Such bad faith, coupled with his wrongful interference with the
contractual relations between Genato and the Da Jose spouses, which culminated in his filing of the
present suit and thereby creating what the counsel for the respondents describes as "a prolonged and
economically unhealthy gridlock 47 on both the land itself and the respondents' rights provides ample basis
for the damages awarded. Based on these overwhelming evidence of bad faith on the part of herein
petitioner Ricardo Cheng, we find that the award of damages made by the appellate court is in order.
WHEREFORE, premises considered, the instant petition for review is DENIED and the assailed
decision is hereby AFFIRMED EN TOTO.
SO ORDERED.
Belosillo, Puno and Mendoza, JJ., concur.

G.R. No. 133168

March 28, 2006

REPUBLIC OF THE PHILIPPINES, Petitioner,1

vs.
BENJAMIN GUERRERO, Respondent.
DECISION
GARCIA, J.:
Assailed and sought to be set aside in this petition for review under Rule 45 of the Rules of Court is
the decision2dated February 12, 1998 of the Court of Appeals (CA) in CA-G.R. CV No. 50298
affirming an earlier decision of the Regional Trial Court (RTC) of Quezon City in Civil Case No. 893899, entitled "Petition for Amendment of Plan and Technical Description of Original Certificate of
Title No. 0-28 in the name of Benjamin Guerrero, Registry of Deeds of Quezon City."
The assailed decision of the CA recites the facts as follows:
Sometime in December 1964, respondent Benjamin Guerrero filed with the Bureau of Lands (now
Lands Management Bureau) a Miscellaneous Sales Application No. V-83191 covering a parcel of
land situated at Pugad Lawin, Quezon City, consisting of 256 square meters. Upon favorable report
and recommendation of the District Land Officer, Guerreros application was approved per Order of
Award (Exhibit "B"), with the boundaries of the land awarded specified as follows: N-Lot No. 10-C,
Psd-37801; S-Culiat Creek; E-Road; and W-Public Land. A sketch of the land awarded is contained
at the back of the Order of Award.
Subsequently, Miscellaneous Sales Patent No. 8991 dated August 16, 1982 was issued in favor of
respondent. Pursuant thereto the corresponding Original Certificate of Title No. 0-28 was issued on
August 27, 1982.
On July 29, 1983, one Angelina Bustamante filed a protest with the Bureau of Lands claiming that
respondent obtained the sales patent through fraud, false statement of facts and/or omission of
material facts considering that 174 square meters awarded to respondent covered the land where
her house is situated and where she has been residing since 1961.
A formal investigation was conducted by the Bureau of Lands, after which the Director of Lands
issued an order dismissing the protest of Angelina Z. Bustamante. The dismissal of the protest was
affirmed by the then Minister of Natural Resources and by the Office of the President in a Decision
dated July 22, 1985.
Bustamante filed a motion for reconsideration of the Decision dated July 22, 1985. Acting on the
motion for reconsideration, the President, , ordered that the case be remanded to the DENR
[Department of Environment and Natural Resources] for the latters office to conduct an ocular
investigation and resurvey of the disputed area. The said directive is contained in the Order dated
October 30, 1987(Exhibit "J").
Pursuant to the order of the Office of the President, an ocular investigation and relocation survey
was conducted by the DENR. A report (Exhibit "K") was thereafter submitted with a finding that 83
square meters of the titled property of Guerrero consisting of 174 square meters is under ACTUAL
PHYSICAL POSSESSION of Marcelo Bustamante (husband of Angelina Bustamante) with only 91

square meters under the physical possession of Guerrero. It was also found out that OCT No. 0-28
is supposed to be traversed by a road 3 meters wide, as even the Order of Award in favor of
Guerrero, shows by the boundaries of the land indicated therein, viz: bounded on the N-Lot No. 10C, Psd-37801, S-Culiat Creek, E-Road and W-Public Land.
On January 10, 1989, the Office of the President, upon receipt of the [DENR] Ocular Investigation
and Relocation Survey Report (Exhibit "K") , issued an order directing the DENR to implement the
Report for the proper correction of the technical description of the land covered by OCT No. 0-28
issued to respondent.
Pursuant to the directive of the Office of the President, the Director of Lands [on behalf of the
Republic of the Philippines] instituted the instant action [Petition for Amendment of Plan and
Technical Description of OCT No. 0-28 in the name of Benjamin Guerrero] on November 7, 1989.
On April 6, 1990, the [respondent] Benjamin Guerrero filed a motion to dismiss the petition ,
alleging among other things, that the RTC of Quezon City was without jurisdiction over the Director
of Lands petition and that the said petition was defective in form and substance, inasmuch as it
failed to name [Guerrero] who holds a certificate of title (OCT No. 0-28) over the properties subject of
the petition, as respondent in the action, and that the title sought to be amended was irrevocable and
can no longer be questioned.
In its order dated July 8, 1992, the lower court denied the said motion to dismiss for lack of merit.
Trial of the petition followed with the Director of Lands, on one hand, and [Guerrero], on the other,
presenting their respective evidence and witnesses.3 [Words in bracket added.]
On July 13, 1995, the RTC, on the postulate that petitioner Republic failed to prove its allegation that
respondent obtained the sales patent and the certificate of title through fraud and misrepresentation,
rendered judgment finding for the latter. The trial court likewise ruled that the original certificate of
title (OCT No. 0-28) in the name of respondent acquired the characteristics of indefeasibility after the
expiration of one (1) year from the entry of the decree of registration.
Consequently, petitioner interposed an appeal to the CA, which, in a decision dated February 12,
1998, affirmed that of the trial court, rationalizing as follows:
It is a settled rule that a certificate of title issued pursuant to any grant or patent involving public
lands is as conclusive and indefeasible as any other certificate of title issued upon private lands in
ordinary or cadastral registration proceedings. The effect of registration of a homestead or any other
similar patent and the issuance of a certificate of title to the patentee is to vest in him an
incontestable title to the land, in the same manner as if ownership had been determined by final
decree of the court, and the title so issued is absolutely conclusive and indisputable.
In the same way, therefore, that a decree of registration may be reviewed or reopened within one
year after the entry thereof, upon a charge of actual fraud, a patent awarded in accordance with the
Public Land Law may be reviewed within one year from the date of the order for the issuance of the
patent also on the ground of actual fraud.
xxx

xxx

xxx

xxx there is no showing that at the time the [respondent] applied for his miscellaneous sales
patent, there were third persons who had been in occupation of the land applied for. While
subsequent survey documents, prepared as a consequence of the protest filed by the Bustamentes,

report the possession of the Bustamantes of a portion of the land, and the erection of their house
thereon, these reports do not indicate if such structures were existing at the time the application of
the [respondent] was filed in 1964.
There is no support, therefore, to the submission that the [respondent] was guilty of actual fraud in
the acquisition of his miscellaneous sales patent, and subsequently, OCT No. 0-28. 4 (Words in
bracket added)
Petitioner then moved for a reconsideration of the above decision but the same was denied by the
appellate court in its resolution of March 23, 1998. 5
Hence, this recourse, petitioner Republic contending that the appellate court erred in holding I. That a certificate of title issued pursuant to any grant or patent involving public lands is
conclusive and indefeasible despite the fact that respondents title was procured through
fraud and misrepresentation.
II. That there is no basis for the submission that respondent was guilty of actual fraud in the
acquisition of his miscellaneous sales patent despite the final ruling of the Office of the
President from which ruling respondent did not appeal.
III. That the Director of Lands cannot raise the issue of possession of a third person of the
land, or a portion thereof, after the award and issuance of the patent to the applicant despite
the obvious fact that the protest was filed within one year from the issuance of patent. 6
Petitioner argues in esse that respondent procured his sales patent and certificate of title through
fraud and misrepresentation. To support its basic posture, petitioner points to the verification survey
conducted by Engr. Ernesto Erive of the DENR, which, to petitioner, argues for the proposition that
respondents entitlement to a public land award should have been limited to a 91-square meter area
instead of the 174 square meters eventually granted.
On the other hand, respondent contends that his OCT No. 0-28 which he secured pursuant to a
sales patent is conclusive and indefeasible under the Torrens system of registration. As such, his title
can no longer be altered, impugned or cancelled.
At the outset, it must be pointed out that the essential issue raised in this Petition the presence of
fraud is factual. As a general rule, this Court does not review factual matters, as only questions of
law may be raised in a petition for review on certiorari filed with this Court. And as the Court has
consistently held, factual findings of trial courts, when adopted and confirmed by the CA, are final
and conclusive on this Court,7 save when the judgment of the appellate court is based on a
misapprehension of facts or factual inferences manifestly incorrect or when that court overlooked
certain relevant facts which, if properly considered, would justify a different conclusion. 8Obviously,
petitioner is invoking these exceptions toward having the Court review the factual determinations of
the CA.
The basic issue in this case turns on whether or not petitioner has proven by clear and convincing
evidence that respondent procured Miscellaneous Sales Patent (MSP) No. 8991 and OCT No. 0-28
through fraud and misrepresentation.
It bears to stress that the property in question, while once part of the lands of the public domain and
disposed of via a miscellaneous sales arrangement, is now covered by a Torrens certificate. Grants

of public land were brought under the operation of the Torrens system by Act No. 496, or the Land
Registration Act of 1903. Under the Torrens system of registration, the government is required to
issue an official certificate of title to attest to the fact that the person named is the owner of the
property described therein, subject to such liens and encumbrances as thereon noted or what the
law warrants or reserves.9 As it were, the Torrens system aims to obviate possible conflicts of title by
giving the public the right to rely upon the face of the Torrens certificate and to dispense, as a rule,
with the necessity of inquiring further; on the part of the registered owner, the system gives him
complete peace of mind that he would be secured in his ownership as long as he has not voluntarily
disposed of any right over the covered land.10
Section 122 of Act No. 496 provides:
SEC. 122. Whenever public lands belonging to the Government of the [Republic of the
Philippines] are alienated, granted, or conveyed to persons or to public or private corporations, the
same shall be brought forthwith under the operation of this Act and shall become registered lands. It
shall be the duty of the official issuing the instrument of alienation, grant, or conveyance in behalf of
the Government to cause such instrument before its delivery to the grantee, to be filed with the
register of deeds for the province where the land lies and to be there registered like other deeds and
conveyances, whereupon a certificate shall be entered as in other cases of registered land, and an
owners duplicate certificate issued to the grantee. The deed, grant, or instrument of conveyance
from the Government shall not take effect as a conveyance or bind the land, but shall operate only
as a contract between the Government and the grantee and as evidence of authority to the clerk or
register of deeds to make registration. The act of registration shall be the operative act to convey
and affect the land, and in all cases under this Act registration shall be made in the office of the
register of deeds for the province where the land lies. xxx. (Words in bracket added)
Upon its registration, the land falls under the operation of Act No. 496 and becomes registered land.
Time and again, we have said that a Torrens certificate is evidence of an indefeasible title to property
in favor of the person whose name appears thereon.11
However, Section 38 of Act No. 496 recognizes the right of a person deprived of land to institute an
action to reopen or revise a decree of registration obtained by actual fraud. Section 38 of Act No.
496 says so:
SEC. 38. xxx. Every decree of registration shall bind the land, and quiet title thereto, subject only
to the exceptions stated in the following section. It shall be conclusive upon and against all persons,
including the [Republic of the Philippines] and all the branches thereof, . Such decree shall not be
opened by reason of the absence, minority, 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 the land or of any estate or interest therein by decree of registration obtained by
actual fraud, to file in the proper Court of First Instance [now Regional Trial Court] a petition for
review of the decree of registration within one year after entry of the decree provided no innocent
purchaser for value has acquired an interest. Upon the expiration of said term of one year, every
decree or certificate of title issued in accordance with this section shall be incontrovertible. xxx.
(Emphasis and words in bracket supplied)
Fraud is of two kinds: actual or constructive. Actual or positive fraud proceeds from an intentional
deception practiced by means of the misrepresentation or concealment of a material fact.
Constructive fraud is construed as a fraud because of its detrimental effect upon public interests and
public or private confidence, even though the act is not done with an actual design to commit
positive fraud or injury upon other persons.12

Fraud may also be either extrinsic or intrinsic. Fraud is regarded as intrinsic where the fraudulent
acts pertain to an issue involved in the original action, or where the acts constituting the fraud were
or could have been litigated therein. The fraud is extrinsic if it is employed to deprive parties of their
day in court and thus prevent them from asserting their right to the property registered in the name of
the applicant.13
The distinctions assume significance because only actual and extrinsic fraud had been accepted and
is contemplated by the law as a ground to review or reopen a decree of registration. Thus, relief is
granted to a party deprived of his interest in land where the fraud consists in a deliberate
misrepresentation that the lots are not contested when in fact they are; or in willfully misrepresenting
that there are no other claims; or in deliberately failing to notify the party entitled to notice; or in
inducing him not to oppose an application; or in misrepresenting about the identity of the lot to the
true owner by the applicant causing the former to withdraw his application. In all these examples, the
overriding consideration is that the fraudulent scheme of the prevailing litigant prevented a party
from having his day in court or from presenting his case. The fraud, therefore, is one that affects and
goes into the jurisdiction of the court.14
We have repeatedly held that relief on the ground of fraud will not be granted where the alleged
fraud goes into the merits of the case, is intrinsic and not collateral, and has been controverted and
decided. Thus, we have underscored the denial of relief where it appears that the fraud consisted in
the presentation at the trial of a supposed forged document, or a false and perjured testimony, or in
basing the judgment on a fraudulent compromise agreement, or in the alleged fraudulent acts or
omissions of the counsel which prevented the petitioner from properly presenting the case. 15
Petitioner fails to convince the Court that the facts relied upon by it to justify a review of the decree
constitute actual and extrinsic fraud. It has not adduced adequate evidence that would show that
respondent employed actual and extrinsic fraud in procuring the patent and the corresponding
certificate of title. Petitioner miserably failed to prove that it was prevented from asserting its right
over the lot in question and from properly presenting its case by reason of such fraud. In fact, other
than its peremptory statement in its petition filed before the trial court that "the patentee, Benjamin
Guerrero, obtained the above indicated sales patent through fraud, false statement of facts and/or
omission of material facts,"16 petitioner did not specifically allege how fraud was perpetrated by
respondent in procuring the sales patent and the certificate of title. Nor was any evidence proffered
to substantiate the allegation. Fraud cannot be presumed, and the failure of petitioner to prove it
defeats it own cause.
Well-settled is the rule that the party alleging fraud or mistake in a transaction bears the burden of
proof.17 The circumstances evidencing fraud are as varied as the people who perpetrate it in each
case. It may assume different shapes and forms; it may be committed in as many different
ways.18 Thus, the law requires that fraud be established, not just by preponderance of evidence, but
by clear and convincing evidence.19
Petitioner relies heavily on the verification survey report20 which stated that respondent Guerrero was
entitled to only 91 square meters of the subject lot instead of 174 square meters which was awarded
to him. There is, however, no proof that the area eventually awarded to respondent was intentionally
and fraudulently increased. It was never proven that respondent was a party to any fraud that led to
the award of a bigger area of 174 square meters instead of 91 square meters. Petitioner even failed
to give sufficient proof of any error which may have been committed by its agents who had surveyed
the subject property nor had petitioner offered a sensible explanation as to the reason for such
discrepancy. Thus, the presumption of regularity in the performance of official functions must be
respected.

This Court agrees with the RTC that the issuance of the sales patent over the subject lot was made
in accordance with the procedure laid down by Commonwealth Act No. 141, as amended, otherwise
known as the Public Land Act.21 Under Section 91 thereof, an investigation should be conducted for
the purpose of ascertaining the veracity of the material facts set out in the application. 22 The law also
requires sufficient notice to the municipality and barrio where the land is located in order to give
adverse claimants the opportunity to present their claims. 23
In the instant case, records reveal that on December 22, 1964, a day after respondent filed his
miscellaneous sales application, an actual investigation and site verification of the parcel of land was
conducted by Land Investigator Alfonso Tumbocon who reported that the land was free from claims
and conflicts.24 Likewise, the notice of sale of the lot in question was posted at the District Land
Office in San Miguel, Manila, at the Quezon City Hall, and at Pugad Lawin, Quezon City for 30
consecutive days from February 17, 1965 to March 17, 1965 which was the date scheduled for the
sale of the lot. The said notice was worded as follows:
If there is any adverse claim to the land, such claim must be filed at the Bureau of Lands, Manila on
or before the date of the sale; otherwise such claim shall forever be barred. 25
Further, the "Order of Award" 26 dated May 20, 1971, as well as the "Issuance of Patent" 27 dated June
28, 1982 were both duly signed by the Director of Lands. The "Order of Award" even declared that
Guerrero has in good faith established his residence on the land in question. On the other hand, the
"Issuance of Patent" stated that the land consisting of 174 square meters is free from any adverse
claim and that Guerrero has fully paid the purchase price of the lot. Having complied with all the
requirements of the law preliminary to the issuance of the patent, respondent was thus issued MSP
No. 8991 dated August 16, 1982. Thereafter, the corresponding OCT No. 0-28 was issued on August
27, 1982 in the name of respondent Guerrero.
At any rate, by legal presumption, public officers are deemed to have regularly performed their
official duties. Thus, the proceedings for land registration that led to the issuance of MSP No. 8991
and OCT No. 0-28 in respondents name are presumptively regular and proper. To overturn this legal
presumption will not only endanger judicial stability, but also violate the underlying principle of the
Torrens system. Indeed, to do so would reduce the vaunted legal indefeasibility of Torrens titles to
meaningless verbiage.28 Besides, this presumption of regularity has not been overcome by the
evidence presented by petitioner. We, therefore, cannot sustain petitioners contention that fraud
tainted the sales patent granted to respondent Guerrero, as well as the certificate of title issued in
consequence thereof.
Granting that Guerrero committed extrinsic and actual fraud, petitioner failed to avail itself of the
remedy within the prescribed period. Under Section 38 of Act No. 496, a petition for reopening and
review of the decree of registration must be filed within one year from the date of entry of said
decree.
In the case of public land grants or patents, the one-year period commences from the issuance of
the patent by the government.29
In the instant case, the sales patent was issued to respondent on August 16, 1982, while petitioner
instituted an action to amend respondents certificate of title on November 7, 1989 or after the lapse
of more than seven (7) years from the issuance of the patent. Clearly, petitioner failed to timely avail
of the remedy to contest Guerreros title.
Petitioner argues that the right of the State for the reversion of unlawfully acquired property is not
barred by prescription. Thus, it can still recover the land granted to respondent.

True, prescription, basically, does not run against the State and the latter may still bring an action,
even after the lapse of one year, for the reversion to the public domain of lands which have been
fraudulently granted to private individuals.30 However, this remedy of reversion can only be availed of
in cases of fraudulent or unlawful inclusion of the land in patents or certificates of title. In the present
case, petitioner cannot successfully invoke this defense for, as discussed earlier, it was never proven
that respondents patent and title were obtained through actual fraud or other illegal means.
Lest it be overlooked, a piece of land covered by a registered patent and the corresponding
certificate of title ceases to be part of the public domain. As such, it is considered a private property
over which the Director of Lands has neither control nor jurisdiction. 31
Petitioner likewise insists that respondents title had yet to attain the status of indefeasibility. As
argued, Angelina Bustamante was able to timely file a protest on July 29, 1983, which was well
within the one-year prescriptive period.
We do not agree.
While Angelina Bustamante indeed protested the award of a sales patent in favor of respondent, the
protest was, however, filed with the Bureau of Lands instead of with the regional trial court as
mandated by the aforequoted provision of Section 38 of Act No. 496. Said provision expressly states
that a petition for review of a decree of registration shall be filed in the "proper Court of First
Instance" (now Regional Trial Court). The law did not say that such petition may be filed with an
administrative agency like the Bureau of Lands. To be sure, what the law contemplates in allowing a
review of the decree of registration is a full-blown trial before a regular court where each party could
be afforded full opportunity to present his/its case and where each of them must establish his case
by preponderance of evidence and not by mere substantial evidence, the usual quantum of proof
required in administrative proceedings. The concept of "preponderance of evidence" refers to
evidence which is of greater weight, or more convincing, than that which is offered in opposition to it;
at bottom, it means probability of truth.32On the other hand, substantial evidence refers to such
relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if
other minds equally reasonable might conceivably opine otherwise.33
As the review of a decree of registration constitutes an attack on the very integrity of land titles and
the Torrens system, a full-blown trial on the merits before a regular court is necessary for the
purpose of achieving a more in-depth and thorough determination of all issues involved.
Hence, contrary to petitioners assertion, the protest filed by Bustamante with the Bureau of Lands
cannot be considered in the context of a petition to review the decree of registration issued to
respondent. It was only on November 7, 1989 that such petition was filed by the Director of Lands
with the RTC and obviously, it was way beyond the one-year period prescribed by law.
It is worth stressing that the Torrens system was adopted in this country because it was believed to
be the most effective measure to guarantee the integrity of land titles and to protect their
indefeasibility once the claim of ownership is established and recognized. If a person purchases a
piece of land on the assurance that the sellers title thereto is valid, he should not run the risk of
being told later that his acquisition was ineffectual after all. This would not only be unfair to him.
What is worse is that if this were permitted, public confidence in the system would be eroded and
land transactions would have to be attended by complicated and not necessarily conclusive
investigations and proof of ownership. The further consequence would be that land conflicts could be
even more abrasive, if not even violent. The government, recognizing the worthy purposes of the
Torrens system, should be the first to accept the validity of titles issued thereunder once the
conditions laid down by the law are satisfied.34

Instead of stabilizing the Torrens system, petitioner, in filing a suit for the amendment of OCT No. 028, derogates the very integrity of the system as it gives the impression to Torrens title holders, like
herein respondent, that their titles can be questioned by the same authority who had approved their
titles. In that case, no Torrens title holder shall be at peace with the ownership and possession of his
land, for land registration officers can question his title any time they make a finding unfavorable to
said title holder. This is all the more frustrating for respondent Guerrero considering that he had
bought the subject lot from the government itself, the very same party who is now impugning his title.
While the Torrens system is not a mode of acquiring titles to lands but merely a system of
registration of titles to lands,35 justice and equity demand that the titleholder should not be made to
bear the unfavorable effect of the mistake or negligence of the States agents, in the absence of
proof of his complicity in a fraud or of manifest damage to third persons. The real purpose of the
Torrens system is to quiet title to land and put a stop forever to any question as to the legality of the
title, except claims that were noted in the certificate at the time of the registration or that may arise
subsequent thereto.36 Otherwise, the integrity of the Torrens system shall forever be sullied by the
ineptitude and inefficiency of land registration officials, who are ordinarily presumed to have regularly
performed their duties.37
Respondents certificate of title, having been registered under the Torrens system, was thus vested
with the garment of indefeasibility.
WHEREFORE, the instant petition is hereby DENIED and the assailed decision is AFFIRMED.
SO ORDERED.
CANCIO C. GARCIA
Associate Justice
WE CONCUR:
REYNATO S. PUNO
Associate Justice
Chairperson
ANGELINA SANDOVAL-GUTIERREZ
Associate Justice

RENATO C. CORONA
Asscociate Justice

ADOLFO S. AZCUNA
Associate Justice
ATT E S TATI O N
I attest that the conclusions in the above decision were reached in consultation before the case was
assigned to the writer of the opinion of the Courts Division.
REYNATO S. PUNO
Associate Justice
Chairperson, Second Division
C E R TI F I C ATI O N

Pursuant to Article VIII, Section 13 of the Constitution, and the Division Chairperson's Attestation, it
is hereby certified that the conclusions in the above decision were reached in consultation before the
case was assigned to the writer of the opinion of the Court.
ARTEMIO V. PANGANIBAN
Chief Justice

G.R. No. 81163 September 26, 1988

EDUARDO S. BARANDA and ALFONSO HITALIA, petitioners,
vs.
HONORABLE JUDGE TITO GUSTILO, ACTING REGISTER OF DEEDS AVITO SACLAUSO,
HONORABLE COURT OF APPEALS, and ATTY. HECTOR P. TEODOSIO, respondents.
Eduardo S. Baranda for petitioners.
Rico & Associates for private respondents.

GUTIERREZ, JR., J.:

Eduardo S. Baranda and Alfonso Hitalia were the petitioners in G.R. No. 64432 and the private
respondents in G.R. No. 62042. The subject matter of these two (2) cases and the instant case is the
same a parcel of land designated as Lot No. 4517 of the Cadastral Survey of Sta. Barbara, Iloilo
covered by Original Certificate of Title No. 6406.
The present petition arose from the same facts and events which triggered the filing of the earlier
petitions. These facts and events are cited in our resolution dated December 29, 1983 in G.R. No.
64432, as follows:
. . . This case has its origins in a petition for reconstitution of title filed with the Court
of First Instance of Iloilo involving a parcel of land known as Lot No. 4517 of the Sta.
Barbara Cadastre covered by Original Certificate of Title No. 6406 in the name of
Romana Hitalia. Eventually, Original Certificate of Title No. 6406 was cancelled and
Transfer Certificate of Title No. 106098 was issued in the names of Alfonso Hitalia
and Eduardo S. Baranda The Court issued a writ of possession which Gregorio
Perez, Maria P. Gotera and Susana Silao refused to honor on the ground that they
also have TCT No. 25772 over the same Lot No. 4517. The Court, after considering
the private respondents' opposition and finding TCT No. 25772 fraudulently acquired,
ordered that the writ of possession be carried out. A motion for reconsideration
having been denied, a writ of demolition was issued on March 29, 1982. Perez and
Gotera filed a petition for certiorari and prohibition with the Court of Appeals. On
August 6, 1982, the Court of Appeals denied the petition. Perez and Gotera filed the
petition for review on certiorari denominated as G.R. No. 62042 before the Supreme
Court. As earlier stated the petition was denied in a resolution dated January 7,1983.
The motion for reconsideration was denied in another resolution dated March 25,
1983, which also stated that the denial is final. This decision in G.R. No. 62042, in
accordance with the entry of judgment, became final on March 25, 1983. The
petitioners in the instant case G.R. No. 64432--contend that the writs of possession
and demolition issued in the respondent court should now be implemented; that Civil
Case No. 00827 before the Intermediate Appellate Court was filed only to delay the
implementation of the writ; that counsel for the respondent should be held in

contempt of court for engaging in a concerted but futile effort to delay the execution
of the writs of possession and demolition and that petitioners are entitled to damages
because of prejudice caused by the filing of this petition before the Intermediate
Appellate Court. On September 26, 1983, this Court issued a Temporary Restraining
Order ' to maintain the status quo, both in the Intermediate Appellate Court and in the
Regional Trial Court of Iloilo. Considering that (l)there is merit in the instant petition
for indeed the issues discussed in G.R. No. 64432 as raised in Civil Case No. 00827
before the respondent court have already been passed upon in G.R. No. 62042; and
(2) the Temporary Restraining Order issued by the Intermediate Appellate Court was
only intended not to render the petition moot and academic pending the Court's
consideration of the issues, the Court RESOLVED to DIRECT the respondent
Intermediate Appellate Court not to take cognizance of issues already resolved by
this Court and accordingly DISMISS the petition in Civil Case No. 00827. Immediate
implementation of the writs of possession and demolition is likewise ordered. (pp.
107-108, Rollo G.R. No. 64432)
On May 9, 1984, the Court issued a resolution denying with finality a motion for reconsideration of
the December 29, 1983 resolution in G.R. No. 64432. On this same date, another resolution was
issued, this time in G.R. No. 62042, referring to the Regional Trial Court of Iloilo the ex-parte motion
of the private respondents (Baranda and Hitalia) for execution of the judgment in the resolutions
dated January 7, 1983 and March 9, 1983. In the meantime, the then Intermediate Appellate Court
issued a resolution dated February 10, 1984, dismissing Civil Case No. 00827 which covered the
same subject matter as the Resolutions above cited pursuant to our Resolution dated December 29,
1983. The resolution dated December 29, 1983 in G.R. No. 64432 became final on May 20, 1984.
Upon motions of the petitioners, the Regional Trial Court of Iloilo, Branch 23 presided by Judge Tito
G. Gustilo issued the following order:
Submitted are the following motions filed by movants Eduardo S. Baranda and
Alfonso Hitalia through counsel dated August 28, 1984:
(a) Reiterating Motion for Execution of Judgment of Resolutions dated January 7,
1983 and March 9, 1983 Promulgated by Honorable Supreme Court (First Division)
in G.R. No. 62042;
(b) Motion for Execution of Judgment of Resolution dated December 29, 1983
Promulgated by Honorable Supreme Court (First Division) in G.R. No. 64432;
(c) The Duties of the Register of Deeds are purely ministerial under Act 496,
therefore she must register all orders, judgment, resolutions of this Court and that of
Honorable Supreme Court.
Finding the said motions meritorious and there being no opposition thereto, the same
is hereby GRANTED.

WHEREFORE, Transfer Certificate of Title No. T-25772 is hereby declared null and
void and Transfer Certificate of Title No. T-106098 is hereby declared valid and
subsisting title concerning the ownership of Eduardo S. Baranda and Alfonso Hitalia,
all of Sta. Barbara Cadastre.
The Acting Register of Deeds of Iloilo is further ordered to register the Subdivision
Agreement of Eduardo S. Baranda and Alfonso Hitalia as prayed for." (p. 466, Rollo-G.R. No. 64432)
The above order was set aside on October 8, 1984 upon a motion for reconsideration and
manifestation filed by the Acting Registrar of Deeds of Iloilo, Atty. Helen P. Sornito, on the ground
that there was a pending case before this Court, an Action for Mandamus, Prohibition, Injunction
under G.R. No. 67661 filed by Atty. Eduardo Baranda, against the former which remained
unresolved.
In view of this development, the petitioners filed in G.R. No. 62042 and G.R. No. 64432 ex-parte
motions for issuance of an order directing the Regional Trial Court and Acting Register of Deeds to
execute and implement the judgments of this Court. They prayed that an order be issued:
1. Ordering both the Regional Trial Court of Iloilo Branch XXIII, under Hon. Judge
Tito G. Gustilo and the acting Register of Deeds Helen P. Sornito to register the
Order dated September 5, 1984 of the lower court;
2. To cancel No.T-25772. Likewise to cancel No.T-106098 and once cancelled to
issue new certificates of title to each of Eduardo S. Baranda and Alfonso Hitalia;
Plus other relief and remedies equitable under the premises. (p. 473, 64432 Rollo)
Acting on these motions, we issued on September 17,1986 a Resolution in G.R. No. 62042 and G.R.
No. 64432 granting the motions as prayed for. Acting on another motion of the same nature filed by
the petitioners, we issued another Resolution dated October 8, 1986 referring the same to the Court
Administrator for implementation by the judge below.
In compliance with our resolutions, the Regional Trial Court of Iloilo, Branch 23 presided by Judge
Tito G. Gustilo issued two (2) orders dated November 6,1986 and January 6,1987 respectively, to
wit:
ORDER
This is an Ex-parte Motion and Manifestation submitted by the movants through
counsel on October 20, 1986; the Manifestation of Atty. Helen Sornito, Register of
Deeds of the City of Iloilo, and formerly acting register of deeds for the Province of
Iloilo dated October 23, 1986 and the Manifestation of Atty. Avito S. Saclauso, Acting
Register of Deeds, Province of Iloilo dated November 5, 1986.

Considering that the motion of movants Atty. Eduardo S. Baranda and Alfonso Hitalia
dated August 12, 1986 seeking the full implementation of the writ of possession was
granted by the Honorable Supreme Court, Second Division per its Resolution dated
September 17,1986, the present motion is hereby GRANTED.
WHEREFORE, the Acting Register of Deeds, Province of Iloilo, is hereby ordered to
register the Order of this Court dated September 5, 1984 as prayed for.
xxx xxx xxx
ORDER
This is a Manifestation and Urgent Petition for the Surrender of Transfer Certificate of
Title No. T-25772 submitted by the petitioners Atty. Eduardo S. Baranda and Alfonso
Hitalia on December 2, 1986, in compliance with the order of this Court dated
November 25, 1 986, a Motion for Extension of Time to File Opposition filed by Maria
Provido Gotera through counsel on December 4, 1986 which was granted by the
Court pursuant to its order dated December 15, 1986. Considering that no
Opposition was filed within the thirty (30) days period granted by the Court finding the
petition tenable, the same is hereby GRANTED.
WHEREFORE, Maria Provido Gotera is hereby ordered to surrender Transfer
Certificate of Title No. T-25772 to this Court within ten (10) days from the date of this
order, after which period, Transfer Certificate of Title No. T-25772 is hereby declared
annulled and the Register of Deeds of Iloilo is ordered to issue a new Certificate of
Title in lieu thereof in the name of petitioners Atty. Eduardo S. Baranda and Alfonso
Hitalia, which certificate shall contain a memorandum of the annulment of the
outstanding duplicate. (pp. 286-287, Rollo 64432)
On February 9, 1987, Atty. Hector Teodosio, the counsel of Gregorio Perez, private respondent in
G.R. No. 64432 and petitioner in G.R. No. 62042, filed a motion for explanation in relation to the
resolution dated September 17, 1986 and manifestation asking for clarification on the following
points:
a. As to the prayer of Atty. Eduardo Baranda for the cancellation of TCT T-25772,
should the same be referred to the Court of Appeals (as mentioned in the Resolution
of November 27, 1985) or is it already deemed granted by implication (by virtue of
the Resolution dated September 17, 1986)?
b. Does the Resolution dated September 17, 1986 include not only the
implementation of the writ of possession but also the cancellation of TCT T-25772
and the subdivision of Lot 4517? (p. 536, Rollo 4432)
Acting on this motion and the other motions filed by the parties, we issued a resolution dated May
25, 1987 noting all these motions and stating therein:

xxx xxx xxx

Since entry of judgment in G.R. No. 62042 was made on January 7, 1983 and in
G.R. No. 64432 on May 30, 1984, and all that remains is the implementation of our
resolutions, this COURT RESOLVED to refer the matters concerning the execution of
the decisions to the Regional Trial Court of Iloilo City for appropriate action and to
apply disciplinary sanctions upon whoever attempts to trifle with the implementation
of the resolutions of this Court. No further motions in these cases will be entertained
by this Court. (p. 615, Rollo-64432)
In the meantime, in compliance with the Regional Trial Court's orders dated November 6, 1986 and
January 6, 1987, Acting Register of Deeds AvitoSaclauso annotated the order declaring Transfer
Certificate of Title No. T-25772 as null and void, cancelled the same and issued new certificates of
titles numbers T-111560, T-111561 and T-111562 in the name of petitioners Eduardo S. Baranda and
Alfonso Hitalia in lieu of Transfer Certificate of TItle No. T-106098.
However, a notice of lis pendens "on account of or by reason of a separate case (Civil Case No.
15871) still pending in the Court of Appeals" was carried out and annotated in the new certificates of
titles issued to the petitioners. This was upheld by the trial court after setting aside its earlier order
dated February 12, 1987 ordering the cancellation of lis pendens.
This prompted the petitioners to file another motion in G.R, No. 62042 and G.R. No. 64432 to order
the trial court to reinstate its order dated February 12, 1987 directing the Acting Register of Deeds to
cancel the notice of lis pendens in the new certificates of titles.
In a resolution dated August 17, 1987, we resolved to refer the said motion to the Regional Trial
Court of Iloilo City, Branch 23 for appropriate action.
Since respondent Judge Tito Gustilo of the Regional Trial Court of Iloilo, Branch 23 denied the
petitioners' motion to reinstate the February 12, 1987 order in another order dated September 17,
1987, the petitioners filed this petition for certiorari, prohibition and mandamus with preliminary
injunction to compel the respondent judge to reinstate his order dated February l2, 1987 directing the
Acting Register of Deeds to cancel the notice of lis pendens annotated in the new certificates of titles
issued in the name of the petitioners.
The records show that after the Acting Register of Deeds annotated a notice of is pendens on the
new certificates of titles issued in the name of the petitioners, the petitioners filed in the
reconstitution case an urgent ex-parte motion to immediately cancel notice of lis pendens annotated
thereon.
In his order dated February 12, 1987, respondent Judge Gustilo granted the motion and directed the
Acting Register of Deeds of Iloilo to cancel the lis pendens found on Transfer Certificate of Title Nos.
T-106098; T-111560; T-111561 and T-111562.
Respondent Acting Register of Deeds Avito Saclauso filed a motion for reconsideration of the
February 12, 1987 order stating therein:

That the undersigned hereby asks for a reconsideration of the said order based on
the second paragraph of Section 77 of P.D. 1529, to wit:
"At any time after final judgment in favor of the defendant or other
disposition of the action such as to terminate finally all rights of the
plaintiff in and to the land and/or buildings involved, in any case in
which a memorandum or notice of Lis Pendens has been registered
as provided in the preceding section, the notice of Lis Pendens shall
be deemed cancelled upon the registration of a certificate of the clerk
of court in which the action or proceeding was pending stating the
manner of disposal thereof."
That the lis pendens under Entry No. 427183 was annotated on T-106098, T-111560,
T-111561 and T-111562 by virtue of a case docketed as Civil Case No. 15871, now
pending with the Intermediate Court of Appeals, entitled, "Calixta Provido, Ricardo
Provido, Sr., Maria Provido and Perfecto Provido, Plaintiffs, versus Eduardo Baranda
and Alfonso Hitalia, Respondents."
That under the above-quoted provisions of P.D. 152, the cancellation of subject
Notice of Lis Pendens can only be made or deemed cancelled upon the registration
of the certificate of the Clerk of Court in which the action or proceeding was pending,
stating the manner of disposal thereof.
Considering that Civil Case No. 1587, upon which the Notice of Lis Pendens was
based is still pending with the Intermediate Court of Appeals, only the Intermediate
Court of Appeals and not this Honorable Court in a mere cadastral proceedings can
order the cancellation of the Notice of Lis Pendens. (pp. 68-69, Rollo)
Adopting these arguments and on the ground that some if not all of the plaintiffs in Civil Case No.
15871 were not privies to the case affected by the Supreme Court resolutions, respondent Judge
Tito Gustilo set aside his February 12, 1987 order and granted the Acting Register of Deeds' motion
for reconsideration.
The issue hinges on whether or not the pendency of the appeal in Civil Case No. 15871 with the
Court of Appeals prevents the court from cancelling the notice of lis pendens in the certificates of
titles of the petitioners which were earlier declared valid and subsisting by this Court in G.R. No.
62042 and G.R. No. 64432. A corollary issue is on the nature of the duty of a Register of Deeds to
annotate or annul a notice of lis pendens in a torrens certificate of title.
Civil Case No. 15871 was a complaint to seek recovery of Lot No. 4517 of Sta. Barbara Cadastre
Iloilo, (the same subject matter of G.R. No 62042 and G.R. No. 64432) from petitioners Baranda and
Hitalia filed by Calixta Provido, Ricardo Provido, Maxima Provido and Perfecta Provido before the
Regional Trial Court of Iloilo, Branch 23. At the instance of Atty. Hector P. Teodosio, the Provides'
counsel, a notice of is pendens was annotated on petitioners' Certificate of Title No. T-106098
covering Lot No. 4517, Sta. Barbara Cadastre.

Acting on a motion to dismiss filed by the petitioners, the court issued an order dated October 24,
1984 dismissing Civil Case No. 15871.
The order was then appealed to the Court of Appeals. This appeal is the reason why respondent
Judge Gustilo recalled the February 12, 1987 order directing the Acting Register of Deeds to cancel
the notice of lis pendens annotated on the certificates of titles of the petitioners.
This petition is impressed with merit.
Maria Provido Gotera was one of the petitioners in G.R. No. 62042. Although Calixta Provido,
Ricardo Provido, Maxima Provido and Perfecta Provido, the plaintiffs in Civil Case No. 15871 were
not impleaded as parties, it is very clear in the petition that Maria Provido was acting on behalf of the
Providos who allegedly are her co-owners in Lot No. 4517, Sta. Barbara Cadastre as shown by
Transfer Certificate of Title No. T-25772 issued in her name and the names of the plaintiffs in Civil
Case No. 15871, among others. (Annex "E" G.R. No. 62042, p. 51, Rollo) In fact, one of the issues
raised by petitioners Maria Provido Gotera and Gregoria Perez in G.R. No. 62042 was as follows:
xxx xxx xxx
2. Whether or not, in the same reconstitution proceedings, respondent Judge
Midpantao L. Adil had the authority to declare as null and void the transfer certificate
of title in the name of petitioner Maria Provido Gotera and her other co-owners. (p. 3,
Rollo; Emphasis supplied)
It thus appears that the plaintiffs in Civil Case No. 15871 were privies to G.R. No. 62042 contrary to
the trial court's findings that they were not.
G.R. No. 62042 affirmed the order of the then Court of First Instance of Iloilo in the reconstitution
proceedings declaring TCT No. 25772 in the name of Providos over Lot No. 4517, Sta. Barbara
Cadastre null and void for being fraudulently obtained and declaring TCT No. 106098 over the same
parcel Lot No. 4517, Sta. Barbara Cadastre in the name of petitioners Eduardo Baranda and Alfonso
Hitalia valid and subsisting.
The decision in G.R. No. 62042 became final and executory on March 25,1983 long before Civil
Case No. 15871 was filed.
Under these circumstances, it is crystal clear that the Providos, private respondents herein, in filing
Civil Case No. 15871 were trying to delay the full implementation of the final decisions in G.R. No.
62042 as well as G.R. No. 64432 wherein this Court ordered immediate implementation of the writs
of possession and demolition in the reconstitution proceedings involving Lot No. 4517, Sta. Barbara
Cadastre.
The purpose of a notice of lis pendens is defined in the following manner:
Lis pendens has been conceived to protect the real rights of the party causing the
registration thereof With the lis pendens duly recorded, he could rest secure that he

would not lose the property or any part of it. For, notice of lis pendens serves as a
warning to a prospective purchaser or incumbrancer that the particular property is in
litigation; and that he should keep his hands off the same, unless of course he
intends to gamble on the results of the litigation. (Section 24, Rule 14, RuIes of
Court; Jamora v. Duran, et al., 69 Phil. 3, 11; I Martin, Rules of Court, p. 415, footnote
3, citing cases.) (Natanov. Esteban, 18 SCRA 481, 485-486)
The private respondents are not entitled to this protection. The facts obtaining in this case
necessitate the application of the rule enunciated in the cases of Victoriano v. Rovila (55 Phil.
1000), Municipal Council of Paranaque v. Court of First Instance of Rizal (70 Phil., 363) and
Sarmiento v. Ortiz (10 SCRA 158), to the effect that:
We have once held that while ordinarily a notice of pendency which has been filed in
a proper case, cannot be cancelled while the action is pending and undetermined,
the proper court has the discretionary power to cancel it under peculiar
circumstances, as for instance, where the evidence so far presented by the plaintiff
does not bear out the main allegations of his complaint, and where the continuances
of the trial, for which the plaintiff is responsible, are unnecessarily delaying the
determination of the case to the prejudice of the defendant. (Victoriano v.
Rovira, supra; The Municipal Council of Paranaque v. Court of First Instance of
Rizal, supra)
The facts of this case in relation to the earlier cases brought all the way to the Supreme Court
illustrate how the private respondents tried to block but unsuccessfuly the already final decisions in
G.R. No. 62042 and G.R. No. 64432.
Parenthetically, respondent Judge Tito Gustilo abused his discretion in sustaining the respondent
Acting Register of Deeds' stand that, the notice of lis pendens in the certificates of titles of the
petitioners over Lot No. 4571, Barbara Cadastre cannot be cancelled on the ground of pendency of
Civil Case No. 15871 with the Court of Appeals. In upholding the position of the Acting Register of
Deeds based on Section 77 of Presidential Decree No. 1529, he conveniently forgot the first
paragraph thereof which provides:
Cancellation of lis pendens. Before final judgment, a notice of lis pendens may be
cancelled upon Order of the Court after proper showing that the notice is for the
purpose of molesting the adverse party, or that it is not necessary to protect the
rights of the party who caused it to be registered. It may also be cancelled by the
Register of Deeds upon verified petition of the party who caused the registration
thereof.
This Court cannot understand how respondent Judge Gustilo could have been misled by the
respondent Acting Register of Deeds on this matter when in fact he was the same Judge who issued
the order dismissing Civil Case No. 15871 prompting the private respondents to appeal said order
dated October 10, 1984 to the Court of Appeals. The records of the main case are still with the court
below but based on the order, it can be safely assumed that the various pleadings filed by the parties
subsequent to the motion to dismiss filed by the petitioners (the defendants therein) touched on the

issue of the validity of TCT No. 25772 in the name of the Providos over Lot Number 4571, Sta.
Barbara Cadastre in the light of the final decisions in G.R. No. 62042 and G.R. No. 64432.
The next question to be determined is on the nature of the duty of the Register of Deeds to annotate
and/or cancel the notice of lis pendens in a torrens certificate of title.
Section 10, Presidential Decree No. 1529 states that "It shall be the duty of the Register of Deeds to
immediately register an instrument presented for registration dealing with real or personal property
which complies with all the requisites for registration. ... . If the instrument is not registrable, he shall
forthwith deny registration thereof and inform the presentor of such denial in writing, stating the
ground or reasons therefore, and advising him of his right to appeal by consulta in accordance with
Section 117 of this Decree."
Section 117 provides that "When the Register of Deeds is in doubt with regard to the proper step to
be taken or memoranda to be made in pursuance of any deed, mortgage or other instrument
presented to him for registration or where any party in interest does not agree with the action taken
by the Register of Deeds with reference to any such instrument, the question shall be submitted to
the Commission of Land Registration by the Register of Deeds, or by the party in interest thru the
Register of Deeds. ... ."
The elementary rule in statutory construction is that when the words and phrases of the statute are
clear and unequivocal, their meaning must be determined from the language employed and the
statute must be taken to mean exactly what it says. (Aparri v. Court of Appeals, 127 SCRA 231;
Insular Bank of Asia and America Employees' Union [IBAAEU] v. Inciong, 132 SCRA 663) The
statute concerning the function of the Register of Deeds to register instruments in a torrens
certificate of title is clear and leaves no room for construction. According to Webster's Third
International Dictionary of the English Language the word shall means "ought to, must,
...obligation used to express a command or exhortation, used in laws, regulations or directives to
express what is mandatory." Hence, the function of a Register of Deeds with reference to the
registration of deeds encumbrances, instruments and the like is ministerial in nature. The respondent
Acting Register of Deeds did not have any legal standing to file a motion for reconsideration of the
respondent Judge's Order directing him to cancel the notice oflis pendens annotated in the
certificates of titles of the petitioners over the subject parcel of land. In case of doubt as to the proper
step to be taken in pursuance of any deed ... or other instrument presented to him, he should have
asked the opinion of the Commissioner of Land Registration now, the Administrator of the National
Land Title and Deeds Registration Administration in accordance with Section 117 of Presidential
Decree No. 1529.
In the ultimate analysis, however, the responsibility for the delays in the full implementation of this
Court's already final resolutions in G.R. No. 62042 and G.R. No. 64432 which includes the
cancellation of the notice of lis pendensannotated in the certificates of titles of the petitioners over
Lot No. 4517 of the Sta. Barbara Cadastre falls on the respondent Judge. He should never have
allowed himself to become part of dilatory tactics, giving as excuse the wrong impression that Civil
Case No. 15871 filed by the private respondents involves another set of parties claiming Lot No.
4517 under their own Torrens Certificate of Title.

WHEREFORE, the instant petition is GRANTED. The February 12, 1987 order of the Regional Trial
Court of Iloilo, Branch 23 is REINSTATED. All subsequent orders issued by the trial court which
annulled the February 12, 1987 order are SET ASIDE. Costs against the private respondents.
SO ORDERED.
Fernan, C.J., Feliciano, Bidin and Cortes, JJ., concur.

G.R. No. L-22486

March 20, 1968

TEODORO ALMIROL, petitioner-appellant,

vs.
THE REGISTER OF DEEDS OF AGUSAN, respondent-appellee.
Tranquilino O. Calo, Jr. for petitioner-appellant.
Office of the Solicitor General for respondent-appellee.
CASTRO, J.:
On June 28, 1961 Teodoro Almirol purchased from Arcenio Abalo a parcel of land situated in
the municipality of Esperanza, province of Agusan, and covered by original certificate of title P-1237
in the name of "Arcenio Abalo, married to Nicolasa M. Abalo." Sometime in May, 1962 Almirol went
to the office of the Register of Deeds of Agusan in Butuan City to register the deed of sale and to
secure in his name a transfer certificate of title. Registration was refused by the Register of Deeds
upon the following grounds, inter alia, stated in his letter of May 21, 1962:
1. That Original Certificate of Title No. P-1237 is registered in the name of Arcenio Abalo,
married to Nicolasa M. Abalo, and by legal presumption, is considered conjugal property;
2. That in the sale of a conjugal property acquired after the effectivity of the New Civil Code it
is necessary that both spouses sign the document; but
3. Since, as in this case, the wife has already died when the sale was made, the surviving
husband can not dispose of the whole property without violating the existing law (LRC
Consulta No. 46 dated June 10, 1958).
To effect the registration of the aforesaid deed of absolute Sale, it is necessary that the
property be first liquidated and transferred in the name of the surviving spouse and the heirs
of the deceased wife by means of extrajudicial settlement or partition and that the consent of
such other heir or heirs must be procured by means of another document ratifying this sale
executed by their father.
In view of such refusal, Almirol went to the Court of First Instance of Agusan on a petition
for mandamus (sp. civ. case 151), to compel the Register of Deeds to register the deed of sale and
to issue to him the corresponding transfer certificate of title, and to recover P5,000 in moral damages
and P1,000 attorney's fees and expenses of litigation. It is Almirol's assertion that it is but a
ministerial duty of the respondent to perform the acts required of him, and that he (Almirol) has no
other plain, speedy and adequate remedy in the ordinary course of law.
In his answer with counterclaim for P10,000 damages, the respondent reiterated the grounds
stated in his letter of May 21, 1962, averred that the petitioner has "other legal, plain, speedy and
adequate remedy at law by appealing the decision of the respondent to the Honorable
Commissioner of Land Registration," and prayed for dismissal of the petition.

In its resolution of October 16, 1963 the lower court, declaring that "mandamus does not
lie . . . because the adequate remedy is that provided by Section 4 of Rep. Act 1151", dismissed the
petition, with costs against the petitioner.
Hence the present appeal by Almirol.
The only question of law tendered for resolution is whether mandamus will lie to compel the
respondent to register the deed of sale in question.
Although the reasons relied upon by the respondent evince a sincere desire on his part to
maintain inviolate the law on succession and transmission of rights over real properties, these do not
constitute legal grounds for his refusal to register the deed. Whether a document is valid or not, is
not for the register of deeds to determine; this function belongs properly to a court of competent
jurisdiction.1
Whether the document is invalid, frivolous or intended to harass, is not the duty of a
Register of Deeds to decide, but a court of competent jurisdiction. (Gabriel vs. Register of
Deeds of Rizal, et al., L-17956, Sept. 30, 1953).
. . . the supposed invalidity of the contracts of lease is no valid objection to their
registration, because invalidity is no proof of their non-existence or a valid excuse for
denying their registration. The law on registration does not require that only valid instruments
shall be registered. How can parties affected thereby be supposed to know their invalidity
before they become aware, actually or constructively, of their existence or of their
provisions? If the purpose of registration is merely to give notice, then questions regarding
the effect or invalidity of instruments are expected to be decided after, not before,
registration. It must follow as a necessary consequence that registration must first be
allowed, and validity or effect litigated afterwards. (Gurbax Singh Pablo & Co. vs. Reyes and
Tantoco, 92 Phil. 182-183).
Indeed, a register of deeds is entirely precluded by section 4 of Republic Act 1151 from
exercising his personal judgment and discretion when confronted with the problem of whether to
register a deed or instrument on the ground that it is invalid. For under the said section, when he is
in doubt as to the proper step to be taken with respect to any deed or other instrument presented to
him for registration, all that he is supposed to do is to submit and certify the question to the
Commissioner of Land Registration who shall, after notice and hearing, enter an order prescribing
the step to be taken on the doubtful question. Section 4 of R.A. 1151 reads as follows:
Reference of doubtful matters to Commissioner of Land Registration. When the
Register of Deeds is in doubt with regard to the proper step to be taken or memorandum to
be made in pursuance of any deed, mortgage, or other instrument presented to him for
registration, or where any party in interest does not agree with the Register of Deeds with
reference to any such matter, the question shall be submitted to the Commissioner of Land
Registration either upon the certification of the Register of Deeds, stating the question upon
which he is in doubt, or upon the suggestion in writing by the party in interest; and thereupon
the Commissioner, after consideration of the matter shown by the records certified to him,

and in case of registered lands, after notice to the parties and hearing, shall enter an order
prescribing the step to be taken or memorandum to be made. His decision in such cases
shall be conclusive and binding upon all Registers of Deeds: Provided, further, That when a
party in interest disagrees with the ruling or resolution of the Commissioner and the issue
involves a question of law, said decision may be appealed to the Supreme Court within thirty
days from and after receipt of the notice thereof.
The foregoing notwithstanding, the court a quo correctly dismissed the petition for mandamus.
Section 4 abovequoted provides that "where any party in interest does not agree with the Register of
Deeds . . . the question shall be submitted to the Commissioner of Land Registration," who
thereafter shall "enter an order prescribing the step to be taken or memorandum to be made," which
shall be "conclusive and binding upon all Registers of Deeds." This administrative remedy must be
resorted to by the petitioner before he can have recourse to the courts.
ACCORDINGLY, the Resolution of the lower court of October 16, 1969, is affirmed, at
petitioner's cost.
1wph1.t

Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar, Angeles and Fernando, JJ., concur.
Concepcion, C.J., is on leave.
Sanchez, J., concurs in the result.