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Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 159934

June 26, 2008

METROPOLITAN BANK and TRUST COMPANY and ROGELIO T.


UY, petitioners,
vs.
JOSE B. TAN and REY JOHN TAN, respondents.
DECISION
CARPIO, J.:
The Case
This is a petition for review on certiorari1 assailing the Decision dated 21 March
20032 and the Resolution dated 1 September 20033 of the Court of Appeals
(appellate court) in CA-G.R. SP No. 68523. The appellate court reversed the
Decision dated 2 April 20014 of the Regional Trial Court of Cagayan de Oro City
(trial court) in Miscellaneous Case (MC) No. 2000-117.
The trial court granted Metropolitan Bank and Trust Company (Metrobank) a
Writ of Possession over the properties covered by TCT No. T-134333, TCT No.
134331, and TCT No. 134332.
The Facts
The appellate court stated the facts as follows:
Petitioner Rey John Tan is the owner and actual possessor of a parcel
of land situated at Carmen, Cagayan de Oro City, specifically described
under Transfer Certificate of Title (TCT) No. T-37311 and registered with
the Registry of Deeds of Cagayan de Oro City.
On the other hand, petitioner Jose B. Tan is also an owner of a parcel of
commercial land situated at Lapasan, Cagayan de Oro City, duly

registered under Transfer Certificate of Title (TCT) No. T-53267 of the


Registry of Deeds of Cagayan de Oro City.
Private respondent Metropolitan Bank and Trust Company alleges that
petitioner Jose B. Tan had been duly authorized, pursuant to a special
power of attorney given by a [sic] Ariel Tan, to mortgage the commercial
properties of the latter covered by Transfer Certificate of Title (TCT)
Nos. T-42033 and T-42032, both registered with the Register of Deeds
of Cagayan de Oro City, in favor of private respondent bank.
Subsequently, a petition for the extra-judicial foreclosure of Transfer
Certificate of Title (TCT) Nos. T-37311, T-53267, T-42033, and T-42032,
was filed by Metropolitan Bank and Trust Company and Rogelio T. Uy
with the Office of the Provincial Sheriff of Misamis Oriental. The said
petition was acted upon by public respondent Sheriff Albano Cuarto who
then undertook to schedule the public auction sale of the
aforementioned parcels of land on April 17, 1998. The said public
auction was to be conducted in order to satisfy an alleged obligation
of P48,311,003.39 that were all secured by real estate mortgages over
the aforementioned lots. The subject parcels of land were auctioned off
by public respondent Albano Cuarto, as scheduled.
Prior to the date of the auction sale, or on April 16, 1998 to be exact,
petitioners Jose B. Tan and his wife, Eliza Go Tan, filed an action to
"Remove Cloud of Doubt on Title, Injunction with prayer for issuance of
a writ of preliminary injunction or temporary restraining order," before
the Regional Trial Court of Misamis Oriental, Branch 38, docketed as
Civil Case No. 98-225, entitled "JOSE B. TAN AND ELIZA GO TAN,
plaintiffs, versus METROPOLITAN BANK AND TRUST COMPANY,
ROGELIO T. UY and ALBANO L. CUARTO, as Sheriff IV, Office of the
Provincial Sheriff of Misamis Oriental, defendants."
In a Decision, dated March 5, 2001, the court a quo rendered the
following pronouncement, the dispositive portion of which is hereby
quoted as follows:
a) Declaring that, because of the fact that plaintiff Eliza G. Tan
did not give her consent to all the real estate mortgages
annotated at the back of her title, TCT No. T-53267, of the

Registry of Deeds for Cagayan de Oro, all said mortgages are


null and void ab initio;
b) Declaring that, because plaintiff Jose B. Tan did not execute
the real estate mortgages annotated at the back of his title, TCT
No. T-53267, of the Registry of Deeds of Cagayan de Oro, all
said mortgages are null and void;
c) Declaring that extra-judicial foreclosure proceedings taken by
the defendant-sheriff, including the sheriffs certificate of sale,
as null and void;
d) Making permanent the writ of preliminary injunction against
the defendant sheriff, and the office of the provincial Sheriff of
Misamis Oriental, enjoining and restraining them, their agents,
and their representatives from issuing a final certificate of sale
in favor of defendant METROBANK covering the parcel of land
covered by TCT No. T-53267;
e) Ordering the removal of the cloud on the title, TCT No. T53267, of the Registry of Deeds of Cagayan de Oro, and the
cancellation of all the entries of the real estate mortgages and
amendment of mortgages annotated at the back of TCT No. T53267 of the Registry of Deeds for Cagayan de Oro City;

Case No. 2000-117 before Branch 21, of the same Regional Trial Court
concerning three (3) parcels of land covered by Transfer Certificates of
Title (TCT) Nos. T-42033, T-42032, T-37311 which had been incidentally
cancelled by Transfer Certificates of Title (TCT) Nos. T-13432 [sic], T13431 [sic], and T-13433 [sic].
Since herein petitioners were not notified of the hearing set by the court
in Miscellaneous Case No. 2000-117, private respondent METROBANK
was allowed to present its evidence ex parte on February 8, 2001,
before the Branch Clerk of Court of Branch 21.
On April 2, 2001, the Regional Trial Court of Misamis Oriental, Branch
21, rendered its Decision in Miscellaneous Case No. 2000-117, the
dispositive portion of which reads:
WHEREFORE, petitioner having sufficiently established to the
satisfaction of this Court all the allegations in its petition and
finding the petition to be deserving of merit, the same is hereby
granted. Accordingly, a Writ of Possession over the properties
covered by TCT No. T-134333, TCT No. T-134331 and TCT No.
T-134332 is hereby ordered issued in favor of the petitioner
against any and all occupants/possessor of the aforementioned
properties.
SO ORDERED.

f) Absolving the plaintiffs spouses from financial liability for the


null and void real estate mortgages;
g) Declaring the principal obligations obtained by Rey John Tan
through the annulled real estate mortgages as FULLY PAID by
him;
xxx

xxx

xxx

SO ORDERED.
Notwithstanding the aforementioned pronouncement of the Regional
Trial Court of Misamis Oriental, Branch 38, private respondents
METROBANK and Rogelio T. Uy filed, on January 20, 2001, an Ex
Parte Petition for a writ of possession docketed under Miscellaneous

On July 10, 2001, a writ of possession, in Miscellaneous Case No.


2000-117 involving the three (3) parcels of land covered by Transfer
Certificates of Title (TCT) Nos. T-13432 [sic], T-13431 [sic], and T-13433
[sic], was issued by the Branch Clerk of Court, to wit:
Pursuant to the Decision of the Honorable Court, dated April 2,
2001, you are hereby commanded to place in possession the
herein petitioner METROPOLITAN BANK & TRUST CO. over a
parcel of land including all improvements thereon, covered by
Transfer Certificates of Title Nos. T-13433 [sic], T-13431 [sic],
and TCT No. T-13432 [sic] and cause REY JOHN TAN and/or
any other person thereof to vacate from the premises of the
said property.

The Chief of Police of Cagayan de Oro City or any of his duly


authorized representatives are hereby directed to assist the
Sheriff to enforce this Writ of Possession.

Rey John Tan and Jose B. Tan (respondents) filed an appeal before the
appellate court. They questioned the ruling of the trial court because in Civil
Case No. 98-225, a co-equal court declared all the real estate mortgages void.
They stated that a writ of possession should not issue from a void mortgage.

Witness the Hon. ARCADIO D. FABRIA presiding Judge of this


Court, this 10th day of July.
On even date, or on July 10, 2001, to be exact, public respondent
Sheriff IV Albano L. Cuarto issued a "NOTICE TO VACATE" to petitioner
Rey John Tan regarding the three (3) lots now covered by TCT Nos. T13433 [sic], T-134331, and T-13432 [sic].
In an attempt to forestall the implementation of the assailed writ of
possession, petitioner Rey John Tan, and Ariel Tan, moved for the
reconsideration of the Decision dated April 2, 2001 granting the writ
prayed for, and to quash the writ of possession as well as the notice to
vacate. Respondent judge granted herein petitioners time to consolidate
their exhibits. Among the five (5) exhibits presented by the herein
petitioners, is a copy of the Decision, dated March 5, 2001, of the
Regional Trial Court of Misamis Oriental, Branch 38, declaring the
alleged real estate mortgages and extra-judicial foreclosure
proceedings as null and void ab initio and/or null and void.
The said Motion was denied in an Order, dated November 21, 2001, of
the Regional Trial Court of Misamis Oriental, Branch 21, the dispositive
portion of which reads:
WHEREFORE, premises considered, oppositors motion for
reconsideration and motion to quash writ of possession and
notice to vacate are hereby denied for want of merit.
Consequently, petitioners motion to break open is granted.
Petitioner is thus allowed to break open the foreclosed property
in order for the latter to be placed in complete control and
possession thereof.
SO ORDERED.
The motion for the reconsideration of the Order, dated November 21,
2001, was likewise denied in another Order of the said Court on
December 13, 2001.5

The Appellate Courts Ruling


In its Decision dated 21 March 2003, the appellate court reversed the decision
of the trial court in MC No. 2000-117. The appellate court stated that there is no
factual and legal basis to uphold the trial courts ruling granting the issuance of a
writ of possession in favor of Metrobank because a co-equal court declared the
real estate mortgages void. The appellate court ruled that the issuance of a writ
of possession amounted to interference with the judgment of another court of
concurrent jurisdiction. The dispositive portion of the Decision reads:
WHEREFORE, the instant petition for certiorari is GRANTED. The
Decision, dated April 2, 2001, of the Regional Trial Court of Misamis
Oriental, in Miscellaneous Case No. 2000-117 entitled, "In Re: Petition
for Writ of Possession in TCT No. 13433 [sic], formerly registered in the
name of REY JOHN TAN, TCT Nos. 13431 [sic] and T-13432 [sic]
formerly registered in the name of ARIEL TAN,"granting the issuance of
a writ of possession in favor of private respondents Metropolitan Bank
and Trust Company and Rogelio T. Uy, is hereby REVERSED and SET
ASIDE. Costs against private respondents.
SO ORDERED.6
Metrobank asked the appellate court to reconsider its decision. Metrobank
stated that there was no grave abuse of discretion in the issuance of the writ of
possession and that the decision in MC No. 2000-117 did not interfere with the
proceedings of a co-equal court.
In resolving Metrobanks motion for reconsideration, the appellate court took
note of the general rule that the "pendency of a separate civil suit questioning
the validity of the mortgage cannot bar the issuance of the writ of possession
because the same is a ministerial act of the trial court." The appellate court
further stated that the present case falls under the exception to the general rule
because it is attended with equitable considerations. The ruling in Civil Case No.
98-225 is presumed regular, although the pronouncement of invalidity of the
mortgages is not yet definitive as the ruling is still under appeal. The appellate

court then amended the dispositive portion of its 21 March 2003 decision to read
as follows:
WHEREFORE, under paragraph (d) of the instant petition praying for
"such other relief and remedy deemed just and equitable in the
premises," the Court hereby orders that the decision dated 02 April
2001 insofar as its factual and legal basis is AFFIRMED but its order
directing that a writ of possession of the properties covered by TCT No.
T-13433 [sic], TCT No. T-13431 [sic] and TCT No. 13432 [sic] be
issued is held in abeyance until a final decision by the proper appellate
court is rendered in the appeal of Civil Case No. 98-225.
SO ORDERED.7
Hence, this appeal.
The Issues
Metrobank questions the appellate courts decision and resolution by raising
procedural and substantive issues:
1. The lower court erred in not dismissing the petition on the ground that
the respondents have squandered the remedy of appeal and that the
extraordinary remedy of certiorari cannot be a substitute for a lost
appeal.
2. The lower court erred in not dismissing the petition on the ground that
respondents have two adequate remedies in Section 8, Act 3135 and in
Civil Case No. 98-225.
3. The lower court erred in not dismissing the petition on the ground that
the trial court did not gravely abuse its discretion.
4. The lower court erred in holding in abeyance the implementation of
the writ to await the outcome of Civil Case No. 98-225. 8
The Ruling of the Court
We find the petition meritorious. As the errors raised are interrelated, we shall
discuss them jointly.

Issuance of a Writ of Possession


Respondents theorize that the issuance of a writ of possession rests on the
validity of the mortgage. Respondents thus rely heavily on the ruling in Civil
Case No. 98-225, where the trial court declared all the real estate mortgages
void and ruled that Rey John Tan had fully paid the obligations related to the real
estate mortgages. The appellate court, in CA G.R. CV No. 70742, agreed with
respondents theory.
However, our ruling in Metropolitan Bank and Trust Company v.
Tan,9 promulgated on 30 November 2006, set aside the ruling of the appellate
court in CA G.R. CV No. 70742 and dismissed Civil Case No. 98-225. We ruled
that the respondents in that case failed to prove that the property in issue is
conjugal. Moreover, we found that the debit memos represented payment only
in the banks book of entries but did not actually involve the payment or
settlement of the original obligation. We thus declared that the extrajudicial
foreclosure and subsequent sale of the mortgaged property covered by the title
in question are valid. Our ruling in G.R. No. 163712 knocks off a leg from
respondents theory that the issuance of a writ of possession upon a property is
dependent upon the validity of the mortgage.
Notwithstanding respondents theory, no discretion is left to the trial court in the
issuance of a writ of possession. Sections 7 and 8 of Act 3135 read:
Section 7. In any sale made under the provisions of this Act, the
purchaser may petition the [Regional Trial Court] of the province or
place where the property or any part thereof is situated, to give him
possession thereof during the redemption period, furnishing bond in an
amount equivalent to the use of the property for a period of twelve
months, to indemnify the debtor in case it be shown that the sale was
made without violating the mortgage or without complying with the
requirements of this Act. Such petition shall be made under oath and
filed in form of an ex parte motion in the registration or cadastral
proceedings if the property is registered, or in special proceedings in the
case of property registered under the Mortgage Law or under section
one hundred and ninety-four of the Administrative Code, or of any other
real property encumbered with a mortgage duly registered in the office
of any register of deeds in accordance with any existing law, and in
each case the clerk of the court shall, upon the filing of such petition,
collect the fees specified in paragraph eleven of section one hundred

and fourteen of Act Numbered Twenty-eight hundred and sixty-six, and


the court shall, upon approval of the bond, order that a writ of
possession issue, addressed to the sheriff of the province in which the
property is situated, who shall execute said order immediately.

WHEREFORE, we GRANT the petition. We SET ASIDE the Decision dated 21


March 2003 and the Resolution dated 1 September 2003 of the Court of
Appeals in CA-G.R. SP No. 68523.
SO ORDERED.

Section 8. The debtor may, in the proceedings in which possession was


requested, but not later than thirty days after the purchaser was given
possession, petition that the sale be set aside and the writ of
possession cancelled, specifying the damages suffered by him,
because the mortgage was not violated or the sale was not made in
accordance with the provisions hereof, and the court shall take
cognizance of this petition in accordance with the summary procedure
provided for in section one hundred and twelve of Act Numbered Four
hundred and ninety-six; and if it finds the complaint of the debtor
justified, it shall dispose in his favor of all or part of the bond furnished
by the person who obtained possession. Either of the parties may
appeal from the order of the judge in accordance with section fourteen
of Act Numbered Four hundred and ninety-six; but the order of
possession shall continue in effect during the pendency of the appeal.
The applicable law thus states that it is the courts ministerial duty to issue a
writ of possession in favor of the purchaser of the mortgaged realty during the
period of redemption. The trial court committed no grave abuse of discretion as
no exercise of discretion is required.10 It is ministerial upon the court to issue a
writ of possession in favor of a purchaser, provided that a proper motion is filed,
a bond is approved, and no third person is involved. 11The pendency of an action
to annul the mortgage is not a ground for non-enforcement of the writ of
possession.12 The ministerial duty of the trial court does not become
discretionary upon the filing of a complaint questioning the mortgage.
Finally, we agree with Metrobanks contention that the trial courts order granting
the writ of possession is final. The proper remedy for respondents is an appeal
and not a petition for certiorari. As long as the court acts within its jurisdiction,
any alleged errors committed in the exercise of its discretion will amount to
nothing more than mere errors of judgment, correctable by an appeal if the
aggrieved party raised factual and legal issues; or a petition for review under
Rule 45 of the Rules of Court if only questions of law are involved. 13

G.R. No. L-3629

September 28, 1907

MATEA E. RODRIGUEZ, plaintiff-appellant,


vs.
SUSANA DE LA CRUZ, ESCOLASTICO DE LA CRUZ, AND PROCESA DE
LA CRUZ, defendants-appellees.
Chicote and Miranda, for appellant.
Leoncio Imperial and Carlos Imperial, for appellees.
JOHNSON, J.:
On the 21st day of August, 1905, the plaintiff, through her attorneys, filed an
amended complaint in the Court of First Instance of the Province of Albay for the
purpose of recovering from the defendant certain pieces or parcels of land
described in the complaint, alleging: That she was the owner of the said lands;
that she had acquired said lands during her first marriage from her deceased
father, Alejo Rodriguez; that Hilarion de la Cruz was her second husband and
that she had permission from him to commence this action in her own name
against the said defendant; that she had been in possession of said lands and
enjoyed the fruits of the same, from the month of May, 1882, until the month of
February, 1905; that the said Hilarion de la Cruz had no interest or right in said
property; that on or about the 20th of February 1905, the defendants in the
cause commenced an action in the Court of First Instance of the Province of
Albay against the said Hilarion de la Cruz for the partition of the lands described
in the present cause; that on the 29th day of March, 1905, the judge of the said
court adjudged in favor of the defendant Susana de la Cruz in this action the
ownership and possession of the lands described under letter "B" in the
complaint in this cause adjudging and decreeing the ownership and possession
of lands described in letter "A" in this complaint to Escolastico de la Cruz; that
the plaintiff in this cause was not made a party in the action for partition between
the present defendants and the said Hilarion de la Cruz.

To this petition the defendants filed a special denial, denying certain parts of the
facts set out in the complaint and admitting certain other of the facts alleged in
said complaint. As a special defense the defendants set up the judgment of the
Court of First Instance of the Province of Albay of the 29th of March, 1905.
The issue thus formed was duly submitted to the lower court, and after hearing
the evidence the lower court rendered a judgment in favor of the defendants and
against the plaintiff, dismissing the said cause with costs to the plaintiff. The
lower court found as a fact from the evidence adduced during the trial that the
lands described in the complaint were acquired by Hilarion de la Cruz, the father
of the present defendants, "during his married life with his first wife, Andrea de
Leon," and that said lands were not inherited by the present defendant from her
father, Alejo Rodriguez.
From this decision the plaintiff appealed to this court, alleging that the lower
court committed errors, in substance as follows:
1. That the lower court erred in considering the fact that the said Matea E.
Rodriguez did not intervene in said action for partition between the said Hilarion
de la Cruz and his children of the first marriage as sufficient to show that she
had no interest in the lands in question.
2. That the court erred in declaring that the said Hilarion de la Cruz was the
owner of the lands in question, for simple fact that he had been administering
said lands during the entire period of his marriage with the present plaintiff.
3. That the court erred in finding from the evidence that the said Hilarion de la
Cruz has acquired said lands during the existence of his marriage relation with
the said Andrea de Leon, his first wife, and that said lands were not inherited by
the present plaintiff from her deceased father.
With reference to the first assignment of error above noted, we are of the
opinion, and so hold, that for the reason that the said Matea E. Rodriguez had
not been made a party in the action for partition between the present defendants
and the said Hilarion de la Cruz, her interest in said lands was in no way
prejudiced by the decision of the court in that cause.
Section 277 of the Code of Civil Procedure in Civil Actions provides, among
other things, that proceedings in a cause against one person can not affect the
rights of another.

It is admitted by the parties in the present action that the said Matea E.
Rodriguez was not made a party in the former action for the partition between
the present defendants and the said Hilarion de la Cruz, neither is it shown that
she had any knowledge or information concerning the existence or pendency of
said action.,
With reference of the second assignment of error above noted, it is admitted
that soon after the marriage of the said Hilarion de la Cruz with the present
plaintiff he commenced to administer the property in question. There is no
provision in the Civil Code which prohibits a husband from administering the
property of his wife, as her representative, and certainly it can not be concluded
that the property which he administers for his wife is his for the mere reason that
he has administered the same for a long time.
Article 1382 of the Civil Code provides that the wife shall retain the ownership of
her property which she brings to the marriage relation. It is true that article 1384
prescribes that she shall have the management of the property, unless she was
delivered the same to her husband by means of a public document, providing
that he may administer said property; but it can not be claimed; from the mere
fact that she has permitted her husband to administer her property without
having his authority to do so evidenced by a public document, that she has
thereby lost her property and that the same has become the property of her
husband. No such claim was made in the court below on behalf of the
defendants. Their claim was that the said Hilarion de la Cruz had acquired said
property during the existence of his marriage with his first wife, Andrea de Leon.
With reference to the third assignment of error above noted, we are of the
opinion, and so hold, after an examination of the evidence adduced during the
trial of said cause, that the said lands in question were acquired by Matea E.
Rodriguez by inheritance during the existence of her first marriage, from her
deceased father, Alejo Rodriguez.
Therefore, from all the foregoing facts, we are of the opinion that the judgment
of the lower court should be reversed, and it is hereby ordered that the said
cause be remanded to the lower court with direction that a judgment be entered
declaring that the said plaintiffs, Matea E. Rodriguez, is the owner and is entitled
to the possession, as against the said defendants, of the lands described i the
amended complaint presented in this cause.
Without any finding as to costs, it is so ordered.

Arellano, C.J., Torres, Willard, and Tracey, JJ., concur.


Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 141323

June 8, 2005

DAVID V. PELAYO and LORENZA* B. PELAYO, Petitioners,


vs.
MELKI E. PEREZ, Respondent.

complaint for specific performance against her and her husband Pelayo
(defendants).
The defendants moved to dismiss the complaint on the ground that it stated no
cause of action, citing Section 6 of RA 6656 otherwise known as the
Comprehensive Agrarian Reform Law which took effect on June 10, 1988 and
which provides that contracts executed prior thereto shall "be valid only when
registered with the Register of Deeds within a period of three (3) months after
the effectivity of this Act."
The questioned deed having been executed on January 10, 1988, the
defendants claimed that Perez had at least up to September 10, 1988 within
which to register the same, but as they failed to, it is not valid and, therefore,
unenforceable.

DECISION
AUSTRIA-MARTINEZ, J.:
This resolves the petition for review on certiorari seeking the reversal of the
Decision1 of the Court of Appeals (CA) promulgated on April 20, 1999 which
reversed the Decision of the Regional Trial Court (RTC) of Panabo, Davao,
Branch 34, in Civil Case No. 91-46; and the CA Resolution dated December 17,
1999 denying petitioners motion for reconsideration.
The antecedent facts as aptly narrated by the CA are as follows:
David Pelayo (Pelayo),by a Deed of Absolute Sale executed on January 11,
1988, conveyed to Melki Perez (Perez) two parcels of agricultural land (the lots)
situated in Panabo, Davao which are portions of Lot 4192, Cad. 276 covered by
OCT P-16873.
Loreza Pelayo (Loreza), wife of Pelayo, and another one whose signature is
illegible witnessed the execution of the deed.
Loreza, however, signed only on the third page in the space provided for
witnesses on account of which Perez application for registration of the deed
with the Office of the Register of Deeds in Tagum, Davao was denied.
Perez thereupon asked Loreza to sign on the first and second pages of the
deed but she refused, hence, he instituted on August 8, 1991 the instant

The trial court thus dismissed the complaint. On appeal to this Court, the
dismissal was set aside and the case was remanded to the lower court for
further proceedings.
In their Answer, the defendants claimed that as the lots were occupied illegally
by some persons against whom they filed an ejectment case, they and Perez
who is their friend and known at the time as an activist/leftist, hence feared by
many, just made it appear in the deed that the lots were sold to him in order to
frighten said illegal occupants, with the intentional omission of Lorezas
signature so that the deed could not be registered; and that the deed being
simulated and bereft of consideration is void/inexistent.
Perez countered that the lots were given to him by defendant Pelayo in
consideration of his services as his attorney-in-fact to make the necessary
representation and negotiation with the illegal occupants-defendants in the
ejectment suit; and that after his relationship with defendant Pelayo became
sour, the latter sent a letter to the Register of Deeds of Tagum requesting him
not to entertain any transaction concerning the lots title to which was entrusted
to Perez who misplaced and could [not] locate it.
Defendant Pelayo claimed in any event, in his Pre-trial brief filed on March 19,
1996, that the deed was without his wife Lorezas consent, hence, in light of Art.
166 of the Civil Code which provides:

Article 166. Unless the wife has been declared a non compos mentis or a
spendthrift, or is under civil interdiction or is confined in a leprosarium, the
husband cannot alienate or encumber any real property of the conjugal
partnership without the wifes consent . . .

Petitioners moved for reconsideration of the decision but the same was denied
per Resolution dated December 17, 1999. The CA found said motion to have
been filed out of time and ruled that even putting aside technicality, petitioners
failed to present any ground bearing on the merits of the case to justify a
reversal or setting aside of the decision.

it is null and void.


Hence, this petition for review on certiorari on the following grounds:
The trial court, finding, among others, that Perez did not possess, nor pay the
taxes on the lots, that defendant Pelayo was indebted to Perez for services
rendered and, therefore, the deed could only be considered as evidence of debt,
and that in any event, there was no marital consent to nor actual consideration
for the deed, held that the deed was null and void and accordingly rendered
judgment the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered ordering and directing the
defendants to pay plaintiff Melki Perez the sum of TEN THOUSAND
(P10,000.00) Pesos as principal with 12% interest per annum starting from the
date of filing of the complaint on August 1, 1991 until plaintiff is fully paid.
The defendants shall likewise pay to plaintiff the sum of THREE THOUSAND
(P3,000.00) as attorneys fees.
The court further orders that the Deed of Absolute Sale, (Annex A) of the
complaint and (Annex C) of the plaintiffs Motion for Summary Judgment is
declared null and void and without force and it is likewise removed as a cloud
over defendants title and property in suit. . . ."2
The RTC Decision was appealed by herein respondent Perez to the CA.
Petitioners failed to file their appellees brief. The CA then promulgated its
Decision on April 20, 1999 whereby it ruled that by Lorenzas signing as witness
to the execution of the deed, she had knowledge of the transaction and is
deemed to have given her consent to the same; that herein petitioners failed to
adduce sufficient proof to overthrow the presumption that there was
consideration for the deed, and that petitioner David Pelayo, being a lawyer, is
presumed to have acted with due care and to have signed the deed with full
knowledge of its contents and import. The CA reversed and set aside the RTC
Decision, declaring as valid and enforceable the questioned deed of sale and
ordering herein petitioner Lorenza Pelayo to affix her signature on all pages of
said document.

1. The CA erred in ignoring the specific provision of Section 6, in relation


to Section 4 of R.A. No. 6657 otherwise known as the Comprehensive
Agrarian Reform Law of 1988 which took effect on June 15, 1988 and
which provides that contracts executed prior thereto shall "be valid only
when registered with the Register of Deeds within a period of three (3)
months after the effectivity of this Act."
2. The CA erred in holding that the deed of sale was valid and
considering the P10,000.00 adjudged by the trial court as Perezs
remuneration as the consideration for the deed of sale, instead of
declaring the same as null and void for being fictitious or simulated and
on the basis of Art. 491, Par. 2 of the New Civil Code which prohibits
agents from acquiring by purchase properties from his principal under
his charge.
3. The CA made a novel ruling that there was implied marital consent of
the wife of petitioner David Pelayo.
4. Petitioners should have been allowed to file their appellees brief to
ventilate their side, considering the existence of peculiar circumstances
which prevented petitioners from filing said brief.
On the other hand, respondent points out that the CA, in resolving the first
appeal docketed as CA-G.R. SP No. 387003 brought by respondent assailing
the RTC Order granting herein petitioners motion to dismiss, already ruled that
under R.A. No. 6657, the sale or transfer of private agricultural land is allowed
only when the area of the land being conveyed constitutes or is a part of, the
landowner-seller retained area and when the total landholding of the purchasertransferee, including the property sold, does not exceed five (5) hectares; that in
this case, the land in dispute is only 1.3 hectares and there is no proof that the
transferees (herein respondent) total landholding inclusive of the subject land
will exceed 5 hectares, the landholding ceiling prescribed by R.A. No. 6657; that

the failure of respondent to register the instrument was not due to his fault or
negligence but can be attributed to Lorenzas unjustified refusal to sign two
pages of the deed despite several requests of respondent; and that therefore,
the CA ruled that the deed of sale subject of this case is valid under R.A. No.
6657.
Respondent further maintains that the CA correctly held in its assailed Decision
that there was consideration for the contract and that Lorenza is deemed to
have given her consent to the deed of sale.
Respondent likewise opines that the CA was right in denying petitioners motion
for reconsideration where they prayed that they be allowed to file their
appellees brief as their counsel failed to file the same on account of said
counsels failing health due to cancer of the liver. Respondent emphasized that
in petitioners motion for reconsideration, they did not even cite any errors made
by the CA in its Decision.
The issues boil down to the question of whether or not the deed of sale was null
and void on the following grounds: (a) for not complying with the provision in
R.A. No. 6657 that such document must be registered with the Register of
Deeds within three months after the effectivity of said law; (b) for lack of marital
consent; (c) for being prohibited under Article 1491 (2) of the Civil Code; and (d)
for lack of consideration.
We rule against petitioners.
The issue of whether or not the deed of sale is null and void under R.A. No.
6657, for respondents failure to register said document with the Register of
Deeds within three months after the effectivity of R.A. No. 6657, had been
resolved with finality by the CA in its Decision dated November 24, 1994 in CAG.R. SP No. 38700.4 Herein petitioners no longer elevated said CA Decision to
this Court and the same became final and executory on January 7, 1995. 5
In said decision, the CA interpreted Section 4, in relation to Section 70 of R.A.
No. 6657, to mean thus:
. . . the proper interpretation of both sections is that under R.A. No. 6657, the
sale or transfer of a private agricultural land is allowed only when said land area
constitutes or is a part of the landowner-seller retained area and only when the

total landholdings of the purchaser-transferee, including the property sold does


not exceed five (5) hectares.
Aside from declaring that the failure of respondent to register the deed was not
of his own fault or negligence, the CA ruled that respondents failure to register
the deed of sale within three months after effectivity of The Comprehensive
Agrarian Reform Law did not invalidate the deed of sale as "the transaction over
said property is not proscribed by R.A. No. 6657."
Thus, under the principle of law of the case, said ruling of the CA is now binding
on petitioners. Such principle was elucidated in Cucueco vs. Court of
Appeals,6 to wit:
1avvph!1

Law of the case has been defined as the opinion delivered on a former appeal.
It is a term applied to an established rule that when an appellate court passes
on a question and remands the case to the lower court for further proceedings,
the question there settled becomes the law of the case upon subsequent
appeal. It means that whatever is once irrevocably established as the controlling
legal rule or decision between the same parties in the same case continues to
be the law of the case, whether correct on general principles or not, so long as
the facts on which such decision was predicated continue to be the facts of the
case before the court.
Petitioners not having questioned the Decision of the CA dated November 24,
1994 which then attained finality, the ruling that the deed of sale subject of this
case is not among the transactions deemed as invalid under R.A. No. 6657, is
now immutable.
We agree with the CA ruling that petitioner Lorenza, by affixing her signature to
the Deed of Sale on the space provided for witnesses, is deemed to have given
her implied consent to the contract of sale.
Sale is a consensual contract that is perfected by mere consent, which may
either be express or implied.7 A wifes consent to the husbands disposition of
conjugal property does not always have to be explicit or set forth in any
particular document, so long as it is shown by acts of the wife that such consent
or approval was indeed given.8 In the present case, although it appears on the
face of the deed of sale that Lorenza signed only as an instrumental witness,
circumstances leading to the execution of said document point to the fact that

Lorenza was fully aware of the sale of their conjugal property and consented to
the sale.
In their Pre-Trial Brief,9 petitioners admitted that even prior to 1988, they have
been having serious problems, including threats to the life of petitioner David
Pelayo, due to conflicts with the illegal occupants of the property in question, so
that respondent, whom many feared for being a leftist/activist, offered his help in
driving out said illegal occupants.
Human experience tells us that a wife would surely be aware of serious
problems such as threats to her husbands life and the reasons for such threats.
As they themselves stated, petitioners problems over the subject property had
been going on for quite some time, so it is highly improbable for Lorenza not to
be aware of what her husband was doing to remedy such problems. Petitioners
do not deny that Lorenza Pelayo was present during the execution of the deed
of sale as her signature appears thereon. Neither do they claim that Lorenza
Pelayo had no knowledge whatsoever about the contents of the subject
document. Thus, it is quite

Art. 166. Unless the wife has been declared a non compos mentis or a
spendthrift, or is under civil interdiction or is confined in a leprosarium, the
husband cannot alienate or encumber any real property of the conjugal property
without the wifes consent. If she refuses unreasonably to give her consent, the
court may compel her to grant the same.
...
Art. 173. The wife may, during the marriage, and within ten years from the
transaction questioned, ask the courts for the annulment of any contract of the
husband entered into without her consent, when such consent is required, or
any act or contract of the husband which tends to defraud her or impair her
interest in the conjugal partnership property. Should the wife fail to exercise this
right, she or her heirs, after the dissolution of the marriage, may demand the
value of property fraudulently alienated by the husband.

Hence, it has been held that the contract is valid until the court annuls the same
and only upon an action brought by the wife whose consent was not
obtained.11 In the present case, despite respondents repeated demands for
certain that she knew of the sale of their conjugal property between her husband Lorenza to affix her signature on all the pages of the deed of sale, showing
and respondent.
respondents insistence on enforcing said contract, Lorenza still did not file a
case for annulment of the deed of sale. It was only when respondent filed a
Under the rules of evidence, it is presumed that a person takes ordinary care of complaint for specific performance on August 8, 1991 when petitioners brought
his concerns.10 Petitioners did not even attempt to overcome the aforementioned up Lorenzas alleged lack of consent as an affirmative defense. Thus, if the
transaction was indeed entered into without Lorenzas consent, we find it quite
presumption as no evidence was ever presented to show that Lorenza was in
puzzling why for more than three and a half years, Lorenza did absolutely
any way lacking in her mental faculties and, hence, could not have fully
nothing to seek the nullification of the assailed contract.
understood the ramifications of signing the deed of sale. Neither did petitioners
present any evidence that Lorenza had been defrauded, forced, intimidated or
threatened either by her own husband or by respondent into affixing her
The foregoing circumstances lead the Court to believe that Lorenza knew of the
signature on the subject document. If Lorenza had any objections over the
full import of the transaction between respondent and her
conveyance of the disputed property, she could have totally refrained from
having any part in the execution of the deed of sale. Instead, Lorenza even
husband; and, by affixing her signature on the deed of sale, she, in effect,
affixed her signature thereto.
signified her consent to the disposition of their conjugal property.
Moreover, under Article 173, in relation to Article 166, both of the New Civil
Code, which was still in effect on January 11, 1988 when the deed in question
was executed, the lack of marital consent to the disposition of conjugal property
does not make the contract void ab initio but merely voidable. Said provisions of
law provide:

With regard to petitioners asseveration that the deed of sale is invalid under
Article 1491, paragraph 2 of the New Civil Code, we find such argument
unmeritorious. Article 1491 (2) provides:
Art. 1491. The following persons cannot acquire by purchase, even at a public
or judicial auction, either in person or through the mediation of another:

...
(2) Agents, the property whose administration or sale may have been entrusted
to them, unless the consent of the principal has been given;
...
In Distajo vs. Court of Appeals,12 a landowner, Iluminada Abiertas, designated
one of her sons as the administrator of several parcels of her land. The
landowner subsequently executed a Deed of Certification of Sale of
Unregistered Land, conveying some of said land to her son/administrator.
Therein, we held that:
Under paragraph (2) of the above article, the prohibition against agents
purchasing property in their hands for sale or management is not absolute. It
does not apply if the principal consents to the sale of the property in the hands
of the agent or administrator. In this case, the deeds of sale signed by Iluminada
Abiertas shows that she gave consent to the sale of the properties in favor of
her son, Rufo, who was the administrator of the properties. Thus, the consent of
the principal Iluminada Abiertas removes the transaction out of the prohibition
contained in Article 1491(2).13
The above-quoted ruling is exactly in point with this case before us. Petitioners,
by signing the Deed of Sale in favor of respondent, are also deemed to have
given their consent to the sale of the subject property in favor of respondent,
thereby making the transaction an exception to the general rule that agents are
prohibited from purchasing the property of their principals.
Petitioners also argue that the CA erred in ruling that there was consideration for
the sale. We find no error in said appellate courts ruling. The element of
consideration for the sale is indeed present. Petitioners, in adopting the trial
courts narration of antecedent facts in their petition, 14 thereby admitted that they
authorized respondent to represent them in negotiations with the "squatters"
occupying the disputed property and, in consideration of respondents services,
they executed the subject deed of sale. Aside from such services rendered by
respondent, petitioners also acknowledged in the deed of sale that they
received in full the amount of Ten Thousand Pesos. Evidently, the consideration
for the sale is respondents services plus the aforementioned cash money.

Petitioners contend that the consideration stated in the deed of sale is


excessively inadequate, indicating that the deed of sale was merely simulated.
We are not persuaded. Our ruling in Buenaventura vs. Court of Appeals15 is
pertinent, to wit:
. . . Indeed, there is no requirement that the price be equal to the exact value of
the subject matter of sale. . . . As we stated in Vales vs. Villa:
Courts cannot follow one every step of his life and extricate him from bad
bargains, protect him from unwise investments, relieve him from one-sided
contracts, or annul the effects of foolish acts. Courts cannot constitute
themselves guardians of persons who are not legally incompetent. Courts
operate not because one person has been defeated or overcome by another,
but because he has been defeated or overcome illegally. Men may do foolish
things, make ridiculous contracts, use miserable judgment, and lose money by
them indeed, all they have in the world; but not for that alone can the law
intervene and restore. There must be, in addition, a violationof the law, the
commission of what the law knows as an actionable wrong, before the courts
are authorized to lay hold of the situation and remedy it. 16
Verily, in the present case, petitioners have not presented proof that there has
been fraud, mistake or undue influence exercised upon them by respondent. It
is highly unlikely and contrary to human experience that a layman like
respondent would be able to defraud, exert undue influence, or in any way
vitiate the consent of a lawyer like petitioner David Pelayo who is expected to be
more knowledgeable in the ways of drafting contracts and other legal
transactions.
Furthermore, in their Reply to Respondents Memorandum, 17 petitioners adopted
the CAs narration of fact that petitioners stated in a letter they sent to the
Register of Deeds of Tagum that they have entrusted the titles over subject lots
to herein respondent. Such act is a clear indication that they intended to convey
the subject property to herein respondent and the deed of sale was not merely
simulated or fictitious.
Lastly, petitioners claim that they were not able to fully ventilate their defense
before the CA as their lawyer, who was then suffering from cancer of the liver,
failed to file their appellees brief. Thus, in their motion for reconsideration of the
CA Decision, they prayed that they be allowed to submit such appellees brief.
The CA, in its Resolution dated December 17, 1999, stated thus:

By movant-defendant-appellees own information, his counsel received a copy


of the decision on May 5, 1999. He, therefore, had fifteen (15) days from said
date or up to May 20, 1999 to file the motion. The motion, however, was sent
through a private courier and, therefore, considered to have been filed on the
date of actual receipt on June 17, 1999 by the addressee Court of Appeals,
was filed beyond the reglementary period.

IN VIEW OF THE FOREGOING, the petition is DENIED and the Decision of the
Court of Appeals dated April 20, 1999 and its Resolution dated December 17,
1999 are hereby AFFIRMED.
SO ORDERED.

Technicality aside, movant has not proffered any ground bearing on the merits of
the case why the decision should be set aside.

Republic of the Philippines


SUPREME COURT
Manila

1awphi1

Petitioners never denied the CA finding that their motion for reconsideration was
filed beyond the fifteen-day reglementary period. On that point alone, the CA is
correct in denying due course to said motion. The motion having been belatedly
filed, the CA Decision had then attained finality. Thus, in Abalos vs. Philex
Mining Corporation,18 we held that:

FIRST DIVISION
G.R. No. 167412

February 22, 2006

. . . Nothing is more settled in law than that once a judgment attains finality it
thereby becomes immutable and unalterable. It may no longer be modified in
any respect, even if the modification is meant to correct what is perceived to be
an erroneous conclusion of fact or law, and regardless of whether the
modification is attempted to be made by the court rendering it or by the highest
court of the land.

JUANITA NAVAL, Petitioner,


vs.
COURT OF APPEALS, JUANITO CAMALLA, JAIME NACION, CONRADO
BALILA, ESTER MOYA and PORFIRIA AGUIRRE, Respondents.

Moreover, it is pointed out by the CA that said motion did not present any
defense or argument on the merits of the case that could have convinced the
CA to reverse or modify its Decision.

YNARES-SANTIAGO, J.:

We have consistently held that a petitioners right to due process is not violated
where he was able to move for reconsideration of the order or decision in
question.19 In this case, petitioners had the opportunity to fully expound on their
defenses through a motion for reconsideration. Petitioners did file such motion
but they wasted such opportunity by failing to present therein whatever errors
they believed the CA had committed in its Decision. Definitely, therefore, the
denial of petitioners motion for reconsideration, praying that they be allowed to
file appellees brief, did not infringe petitioners right to due process as any issue
that petitioners wanted to raise could and should have been contained in said
motion for reconsideration.

DECISION

This petition for review assails the Decision1 of the Court of Appeals dated
December 14, 2004, in CA-G.R. SP No. 86736, which reversed the Decision 2 of
the Regional Trial Court (RTC) of Naga City, Branch 26, in Civil Case No. 20040054 affirming the Decision3 of the Municipal Circuit Trial Court (MCTC) of
Magarao-Canaman, Camarines Sur, as well as the Resolution 4 dated February
17, 2005 denying petitioners motion for reconsideration.
The facts of the case are as follows:
On December 2, 1969, Ildefonso A. Naval sold a parcel of land located in Sto.
Tomas, Magarao, Camarines Sur, consisting of 858 sq. m. to Gregorio B.
Galarosa. The sale was recorded in the Registry of Property of the Registry of
Deeds of Camarines Sur on December 3, 1969 pursuant to Act No. 3344, the
law governing registrations of all instruments on unregistered lands. 5

Subsequently, Gregorio sold portions of the land to respondents Conrado


Rodrigo Balilla6 on November 4, 1976, Jaime Nacion7 on January 10, 1977 and
spouses Ireneo and Ester Moya8 in July 1977, and Juanito Camalla9 on
September 4, 1987. All buyers occupied the portion they bought, built
improvements thereon, and paid the taxes due thereto. 10
The controversy arose when petitioner Juanita Naval, the great granddaughter
of Ildefonso, was issued on April 1, 1975 by the Register of Deeds of Camarines
Sur an Original Certificate of Title (OCT) No. RP-5386 (29791), covering 733 sq.
m. of the subject land.11 She claimed that she bought the subject land from
Ildefonso in 1972.12
On November 10, 1977, petitioner filed a complaint for recovery of possession
against Bartolome Aguirre, Conrado Balila,13 Ireneo Moya, Jaime Nacion and
Domingo Nacion, which was docketed as Civil Case No. 306. 14However, the
case was dismissed15 without prejudice16 for failure to prosecute the action for an
unreasonable length of time.
Almost 20 years later, or on April 21, 1997, petitioner re-filed the complaint for
recovery of possession with damages before the MCTC of Magarao-Canaman,
Camarines Sur, against Juanita17 Camalla, Diosdado Balila, Conrado Balila,
Forferia18 Aguirre, Jaime Nacion and Ester Moya. The case was docketed as
Civil Case No. 994.
After trial, the MCTC rendered its decision, the dispositive portion reads as
follows:
WHEREFORE, for all the foregoing consideration, decision is hereby rendered
in favor of the plaintiff and against defendants:
1) Declaring the plaintiff to be the legal owner of the land as described
in paragraph 2 of the complaint;
2) Ordering defendants Juanito Camalla, Diosdado Balila, Conrado
Balila, Porferia Aguirre and Jaime Nacion to vacate the property in
question and to deliver its possession to the plaintiff;
3) Ordering Ester Moya to vacate the fifty (50) square meters occupied
by her and to relinquish its possession to the plaintiff;

4) Dismissing the respective claims for damages of the parties.


Pronouncing no costs.
SO ORDERED.19
Aggrieved, respondents appealed the decision to the RTC of Naga City, which
affirmed in toto the assailed decision.20
Respondents thereafter elevated the case to the Court of Appeals via Rule 42 of
the Rules of Court. Finding the prior registration of the deed of sale between
Ildefonso and Gregorio with the Register of Deeds as a constructive notice to
subsequent buyers, the appellate court reversed the decision of the RTC. Thus,
WHEREFORE, premises considered, the present petition is hereby GRANTED.
The appealed decision of the court a quo is hereby REVERSED and SET
ASIDE and a new judgment is hereby entered dismissing respondent's
complaint for recovery of possession with damages. Petitioners' counterclaim for
damages is likewise dismissed for lack of legal and factual bases.
No pronouncement as to costs.
SO ORDERED.21
Hence, this petition assigning the following errors:
I
THE COURT OF APPEALS ERRED IN DECLARING THAT
GREGORIO GALAROSA HAS RIGHTFULLY ACQUIRED OWNERSHIP
OVER THE LOT COVERED BY OCT RP #5386 (29791) AND
DECLARING HIM TO HAVE POSSESSED THE LOT BEFORE THE
ALLEGED SALES TO RESPONDENTS.
II
THE COURT OF APPEALS ERRED IN HOLDING THAT THE
PAYMENT OF TAXES BY RESPONDENTS WERE (sic) EVIDENCE OF
LAWFUL POSSESSION AND OWNERSHIP.

III
THE COURT OF APPEALS ERRED IN DECLARING THAT THE LOTS
CLAIMED BY THE RESPONDENTS HAVE BEEN POSSESSED BY
THEM IN GOOD FAITH DESPITE THEIR KNOWLEDGE OF THE
EXISTENCE OF OCT RP #5386(29791).22
Petitioner claims that she has superior rights over the subject land because the
sale between Ildefonso and Gregorio and the subsequent registration thereof
with the Register of Deeds had no legal effect since the subject land was
declared in the name of Agrifina Avila while the tax declaration cancelled by
Gregorios was that of Gregorio Boaga. Petitioner thus assails the right claimed
by Gregorio over the subject land from which the respondents derived their
respective claims.23
On the other hand, respondents contend that the registered sale by Ildefonso to
Gregorio in 1969 of the subject land, from whom they derive their claims, vests
them with better right than the petitioner; that registration under Act No. 3344
served as constructive notice to the whole world, including the petitioner, who
claimed to have purchased the subject land from Ildefonso in 1972, but failed to
present evidence to prove such acquisition.24
We deny the petition.
Prefatorily, a perusal of the records reveals that during the trial, petitioner
vigorously asserted that the subject land was the exclusive property of Ildefonso
who sold it to her in 1972.25 However, in this appeal, petitioner assails the
ownership not only of Gregorio but also of Ildefonso by alleging that at the time
the latter sold the land to Gregorio, the same was declared in the name of
Agrifina Avila. When a party adopts a certain theory in the court below, he is not
allowed to change his theory on appeal, for to allow him to do so would not only
be unfair to the other party, but it would also be offensive to the basic rules of
fair play, justice and due process.26
In this appeal, the issue for resolution is who has the superior right to a parcel of
land sold to different buyers at different times by its former owner.
It is not disputed that the subject land belonged to Ildefonso and that it was not
registered under the Torrens System27 when it was sold to Gregorio in 1969 and
to the petitioner in 1972. Further, the deed of sale between Ildefonso and

Gregorio was registered with the Register of Deeds of Camarines Sur pursuant
to Act No. 3344, as shown by Inscription No. 54609 dated December 3, 1969,
Page 119, Volume 186, File No. 55409 at the back thereof.
In holding that respondents have a better right to possess the subject land in
view of the bona fide registration of the sale with the Register of Deeds of
Camarines Sur by Ildefonso and Gregorio, the Court of Appeals applied Article
1544 of the Civil Code, which provides:
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 the possession; and, in the absence thereof, to the person
who presents the oldest title, provided there is good faith.
While we agree with the appellate court that respondents have superior right
over the petitioner on the subject property, we find Article 1544 inapplicable to
the case at bar since the subject land was unregistered at the time of the first
sale. The registration contemplated under this provision has been held to refer
to registration under the Torrens System, which considers the act of registration
as the operative act that binds the land.28 Thus, inCarumba v. Court of
Appeals,29 we held that Article 1544 of the Civil Code has no application to land
not registered under Torrens System.
The law applicable therefore is Act No. 3344, which provides for the registration
of all instruments on land neither covered by the Spanish Mortgage Law nor the
Torrens System. Under this law, registration by the first buyer is constructive
notice to the second buyer that can defeat his right as such buyer in good faith.
Applying the law, we held in Bautista v. Fule30 that the registration of an
instrument involving unregistered land in the Registry of Deeds creates
constructive notice and binds third person who may subsequently deal with the
same property. We also held in Bayoca v. Nogales31 that:

Verily, there is absence of prior registration in good faith by petitioners of the


second sale in their favor. As stated in the Santiago case, registration by the first
buyer under Act No. 3344 can have the effect of constructive notice to the
second buyer that can defeat his right as such buyer. On account of the
undisputed fact of registration under Act No. 3344 by [the first buyers],
necessarily, there is absent good faith in the registration of the sale by the
[second buyers] for which they had been issued certificates of title in their
names. It follows that their title to the land cannot be upheld. x x x.
Even if petitioner argues that she purchased and registered the subject land in
good faith and without knowledge of any adverse claim thereto, respondents still
have superior right over the disputed property. We held in Rayos v. Reyes32 that:
"[T]he issue of good faith or bad faith of the buyer is relevant only where the
subject of the sale is registered land and the purchaser is buying the same from
the registered owner whose title to the land is clean x x x in such case the
purchaser who relies on the clean title of the registered owner is protected if he
is a purchaser in good faith for value." Since the properties in question are
unregistered lands, petitioners as subsequent buyers thereof did so at their
peril. Their claim of having bought the land in good faith, i.e., without notice that
some other person has a right to or interest in the property, would not protect
them if it turns out, as it actually did in this case, that their seller did not own the
property at the time of the sale.
It is an established principle that no one can give what one does not
have, nemo dat quod non habet. Accordingly, one can sell only what one owns
or is authorized to sell, and the buyer can acquire no more than what the seller
can transfer legally.33 In the case at bar, since Ildefonso no longer owned the
subject land at the time of the sale to the petitioner, he had nothing to sell and
the latter did not acquire any right to it.
Even if we apply Article 1544, the facts would nonetheless show that
respondents and their predecessors-in-interest registered first the source of
their ownership and possession, i.e., the 1969 deed of sale, and possessed the
subject land at the earliest time. Applying the doctrine of "priority in time, priority
in rights" or "prius tempore, potior jure," respondents are entitled to the
ownership and possession of the subject land.34

permitted by law.35 Moreover, Section 32 of Presidential Decree No. 1529


provides that "[u]pon the expiration of said period of one year, the decree of
registration and the certificate of title shall become incontrovertible."
However, it does not deprive an aggrieved party of a remedy in law. What
cannot be collaterally attacked is the certificate of title and not the title or
ownership which is represented by such certificate. Ownership is different from
a certificate of title.36 The fact that petitioner was able to secure a title in her
name did not operate to vest ownership upon her of the subject land.
Registration of a piece of land under the Torrens System does not create or vest
title, because it is not a mode of acquiring ownership. A certificate of title is
merely an evidence of ownership or title over the particular property described
therein.37 It cannot be used to protect a usurper from the true owner; nor can it
be used as a shield for the commission of fraud; neither does it permit one to
enrich himself at the expense of others.38 Its issuance in favor of a particular
person does not foreclose the possibility that the real property may be co-owned
with persons not named in the certificate, or that it may be held in trust for
another person by the registered owner.39
As correctly held by the Court of Appeals, notwithstanding the indefeasibility of
the Torrens title, the registered owner may still be compelled to reconvey the
registered property to its true owners. The rationale for the rule is that
reconveyance does not set aside or re-subject to review the findings of fact of
the Bureau of Lands. In an action for reconveyance, the decree of registration is
respected as incontrovertible. What is sought instead is the transfer of the
property or its title which has been wrongfully or erroneously registered in
another persons name, to its rightful or legal owner, or to the one with a better
right.40
Finally, the Court of Appeals correctly held that an action for reconveyance does
not prescribe when the plaintiff is in possession of the land to be reconveyed, as
in this case. Thus, in Leyson v. Bontuyan:41
x x x [T]his Court declared that an action for reconveyance based on fraud is
imprescriptible where the plaintiff is in possession of the property subject of the
acts. In Vda. de Cabrera v. Court of Appeals, the Court held:

... [A]n action for reconveyance of a parcel of land based on implied or


True, a certificate of title, once registered, should not thereafter be impugned,
constructive trust prescribes in ten years, the point of reference being the date
altered, changed, modified, enlarged or diminished except in a direct proceeding of registration of the deed or the date of the issuance of the certificate of title

over the property, but this rule applies only when the plaintiff or the person
enforcing the trust is not in possession of the property, since if a person claiming
to be the owner thereof is in actual possession of the property, as the
defendants are in the instant case, the right to seek reconveyance, which in
effect seeks to quiet title to the property, does not prescribe. The reason for this
is that one who is in actual possession of a piece of land claiming to be the
owner thereof may wait until his possession is disturbed or his title is attacked
before taking steps to vindicate his right, the reason for the rule being, that his
undisturbed possession gives him a continuing right to seek the aid of a court of
equity to ascertain and determine the nature of the adverse claim of a third party
and its effect on his own title, which right can be claimed only by one who is in
possession.
Similarly, in the case of David v. Malay, the same pronouncement was reiterated
by the Court:
... There is settled jurisprudence that one who is in actual possession of a piece
of land claiming to be owner thereof may wait until his possession is disturbed
or his title is attacked before taking steps to vindicate his right, the reason for
the rule being, that his undisturbed possession gives him a continuing right to
seek the aid of the court of equity to ascertain and determine the nature of the
adverse claim of a third party and its effect on his own title, which right can be
claimed only by one who is in possession. No better situation can be conceived
at the moment for Us to apply this rule on equity than that of herein petitioners
whose ... possession of the litigated property for no less than 30 years and was

suddenly confronted with a claim that the land she had been occupying and
cultivating all these years, was titled in the name of a third person. We hold that
in such a situation the right to quiet title to the property, to seek its reconveyance
and annul any certificate of title covering it, accrued only from the time the one
in possession was made aware of a claim adverse to his own, and it is only then
that the statutory period of prescription commences to run against such
possessor.
The paramount reason for this exception is based on the theory that registration
proceedings could not be used as a shield for fraud. Moreover, to hold otherwise
would be to put premium on land-grabbing and transgressing the broader
principle in human relations that no person shall unjustly enrich himself at the
expense of another.
WHEREFORE, in view of the foregoing, the petition is DENIED. The Decision of
the Court of Appeals dated December 14, 2004, in CA-G.R. SP No. 86736,
dismissing petitioners complaint for recovery of possession and respondents
counterclaim for damages for lack of legal and factual bases, and the Resolution
dated February 17, 2005 denying the motion for reconsideration,
are AFFIRMED.
SO ORDERED.