PRESCRIPTION DISTINGUISHED FROM LACHES

PRESCRIPTION LACHES

Effect of delay Fact of delay

Question of inequity of
Matter of time permitting a
to be enforced, this
claim inequity
bein founded on
g some change in
the condition of the property or
the

relation of the parties

Statutory Not statutory

Applies at law Applies at equity

Based on a fixed time Not fixed time

SECTION 14 (2) AUTHORIZES ACQUISITION OF OWNERSHIP BY

PRESCRIPTION
PD1529 and its amendatory PD1073 didn’t preclude application for
registration of alienable lands of the public domain, possession
over which commenced only after June 12, 1945, considering
Section 14 (2) which governs and authorizes the application of
those who have acquired ownership of private lands by
prescription under the provisions of existing
laws
against
While as a rule, prescription doesn’t run the State, the
exception is when the law expressly
provides

Prescription—mode of acquiring ownership; properties classified as

alienable public land may be converted into private property by

ordinary prescription of 10 years, or extraordinary prescription of

30 years, without need of title or good
faith. With such

conversion, such property may now fall within the contemplation

of private lands and may be registered
even if the possession

commenced after June 12, 1945.

PRESCRIPTION, GENERALLY.
By prescription, one acquires
ownership and other real rights

through the lapse of time in the manner and under the action laid

down by law
 All things within the commerce of men are susceptible of
prescription, unless otherwise
provided
Acquisitive prescription—ordinary or extraordinary

Ordinary prescription—requires possession of things in good faith

and with just title for the time fixed by law; possession of 10

years
Extraordinar prescription—
y uninterrupted adverse possession

thereof within 30 years without need of title or of good faith

Good faith—consists in the reasonable belief that the person from

whom he received the thing was the owner thereof, and he could
transmit his ownership

HOMESTEAD
PATENT
the Public Land Act governs dispositio
Chapter 4 of the n of
alienable public lands through
homestead
Any citizen of the Philippines over the age of 18 years, or the
head
of a family, may enter a homestead of not exceeding 12
hectares
of agricultural land of the public
domain
The applicant must have cultivated and improved at least
1/5 of
the land continuously since the approval of the application
and
resided for at least 1 year in the municipality in which the
land is
located, or in a municipality in which the land is located, or
in a
municipality adjacent to the same, and then, upon payment
of the
required fee, he shall be entitled to a
patent

EFFECT OF COMPLIANCE WITH LEGAL

REQUIREMENTS
Whe a homesteader complied with all term
n has the s and
conditions which entitle him to a patent for a particular tract
of
public land, he acquires a vested therein,
interest and is to be
regarded as the equitable owner
thereof
The deliver of the th
execution and y patent, after e right to a
particular piece land has become ar
of complete, e the mere
 ministerial acts of the officer charged with
that duty
perfected
Even without the patent, a homestead is a property
fullest unaffected by
right in the sense, the fact that the
paramount title to the land is still in the
government

FREE PATENT
Any natural born citizen of the Philippines who is the owner of
more than 12 hectares and who, for at least 30 years prior to the
effectivity of this amendatory Act, has continuously occupied and
cultivated, either by himself or through his predecessors-in-
interest a tract or tracts of agricultural public lands subject to
disposition, who shall have paid the real estate tax thereon while
the same hasn’t been occupied by any person shall be entitled,
under the provisions of this Chapter, to have a free patent issued
to him for such tract or tracts of such land not to exceed 12
hectares
PD 1073—apply only to A and D lands of the public domain which
have been in open, continuous, exclusive, and notorious
possession and occupation by the applicant himself or thru his
predecessors-in-interest, under a bona fide claim of
ownership

FORECLOSURE

> Remedy available to the mortgagee by which he subjects the mortgaged property to the
satisfaction of the obligation to secure which the mortgage was given
> Denotes a procedure adopted by the mortgagee to terminate the rights of the mortgagor on the
property and includes the sale itself

VALIDITY AND EFFECT OF FORECLOSURE

> The right to foreclose the mortgage and to have the property seized and sold with a view
to applying the proceeds to the payment of the principal obligation
> A mortgage contract may contain an acceleration clause—on occasion of the mortgagor’s
default, the whole sum remaining unpaid automatically becomes due and payable
> Essence of mortgage contract—property has been identified and separated from a
mass of the property of the mortgagor to secure the payment of a principal obligation
> Once the proceeds have been applied to the payment of the principal obligation, the
debtor cannot anymore be asked to pay unless there is deficiency

KINDS OF FORECLOSURE

1. Judicial
2. Extrajudicial

AN ACT TO AUTHORIZE THE MORTGAGE OF PRIVATE REAL PROPERTY IN FAVOR OF

ANY INDIVIDUAL, CORPORATION, OR ASSOCIATION SUBJECT TO CERTAIN CONDITIONS

Section 1. Any provision of law to the contrary notwithstanding, private real property
may be mortgaged in favor of any individual, corporation, or association, but the mortgagee or his
successor in interest, if disqualified to acquire or hold lands of the public domain in the
Philippines, shall not take possession of the mortgaged property during the existence of the
mortgage and shall not
take possession of the mortgaged property except after default and for the sole
purpose of foreclosure, receivership, enforcement or other proceedings and in no case for a
period of more than 5 years from actual possession and shall not bid or take part in any sale of
such real property in case of foreclosure: Provided, that said mortgagee or successor in interest
may take possession of said property after default in accordance with the prescribed
judicial procedures for foreclosure and receivership and in no case exceeding 5 years
from actual
possession.

Section 2. All laws, orders, or regulations, or parts thereof inconsistent with the provisions of this
Act, are repealed or modified accordingly.

Section 3. This Act shall take effect upon its approval.

NOTES ON RA 133:

1. You can mortgage to a foreigner. RA 133 sanctions this. Ownership is not equivalent to
mortgage. Nonetheless, he can only institute judicial proceedings and not extrajudicially
foreclose the mortgage. Furthermore, he cannot bid or take part in the sale of the real property.
2. The foreigner may not take possession of the property during the mortgage. He could only
possess the same as a lessee.
3. The foreigner may only take possession of the mortgaged property after default, and for
the sole purpose of foreclosure, enforcement or other proceedings. This should not exceed
the period of 5 years from actual possession.

JUDICIAL FORECLOSURE UNDER RULE 68, RULES OF COURT

1. The mortgagee should file a petition for judicial foreclosure in the court which has jurisdiction over
the area where the property is situated
2. The court will conduct a trial. If, after trial, the court finds merit in the petition, it will render
judgment ordering the mortgagor/debtor to pay the obligation within a period not less than 90 nor
more than 120 days from the finality of judgment.
3. Within this 90 to 120 day period, the mortgagor has the chance to pay the obligation to
prevent his property from being sold. This is called the EQUITY OF REDEMPTION PERIOD.
4. If mortgagor fails to pay within the 90-120 days given to him by the court, the property shall be
sold to the highest bidder at public auction to satisfy the judgment.
5. There will be a judicial confirmation of the sale. After the confirmation of the sale, the purchaser
shall be entitled to the possession of the property, and all the rights of the mortgagor with
respect to the property are severed or terminated. The equity of redemption period actually
extends until the sale is confirmed. Even after the lapse of the 90 to 120 day period, the mortgagor
can still redeem the property, so long as there has been no confirmation of the sale yet. Therefore,
the equity of redemption can be
considered as the right of the mortgagor to redeem the property BEFORE the confirmation of
the sale.

a. After the confirmation of the sale, the mortgagor does not have a right to redeem the
property anymore. This is the general rule in judicial foreclosures – there is no right of
redemption after the sale is confirmed.

The proceeds of the sale of the property will be disposed as follows:

a. First, the costs of the sale will be deducted from the price at which the property was sold
b. The amount of the principal obligation and interest will be deducted
c. The junior encumbrances will be satisfied
d. If there is still an excess, the excess will go back to the mortgagor. In mortgage, the mortgagee
DOES
NOT get the excess (unlike in pledge).
i. If there is a deficiency, the mortgagee can ask for a DEFICIENCY JUDGMENT which can be
imposed on other property of the mortgagor. The rule on extrajudicial foreclosure is
different. The mortgagee must go to court and file another action for the collection of the deficiency.

ONE WOULD SHY AWAY FROM A JUDICIAL FORECLOSURE:

1. Judicial foreclosure is costly, since the parties would need to hire lawyers. But then again, the
present rules provide that court fees are needed to be paid in extrajudicial proceedings also.
2. The parties have very little control over the sale because there is court intervention.

3. More susceptible to stalling/dilatory tactics by the mortgagor, since he can file all sorts of
motions in court to prevent the sale.
4. It is more efficient to have extrajudicial proceedings since for judicial proceedings, there is a
minimum lapse of time of 6 years.
EXTRAJUDICIAL FORECLOSURE

(UNDER ACT 3135/4118 AND SC ADMINISTRATIVE CIRCULAR)

WHERE SHOULD AN EXTRAJUDICIAL FORECLOSURE SALE BE DONE?

> Sale cannot be made legally outside the city or province wherein the property sold is
situated. In case the place has been stipulated, it shall be made in the municipal building of
the said place
NOTICE OF THE SALE

1. POSTING of the notices of the sale FOR NOT LESS THAN 20 DAYS in at least 3 public
places of the municipality or city where the property is situated
2. IF THE PROPERTY IS WORTH MORE THAN P400, such notice shall also be published once
a week at least 3 consecutive weeks in a newspaper of general circulation in the municipality or
city. (You don't need to count 6 days between publications.)
NOTE: there is jurisprudence, which held that there is sufficient notice when there is
publication.
PUBLIC AUCTION/SALE

1. Time shall be between 9AM and 4PM. It shall be made in the direction of the sheriff of the
province, the justice or auxiliary justice of the peace of the municipality, or of the notary public
of the municipality, who shall be compensated with P5 for each day of actual work or
performance in addition to his expenses.

2. Anyone may bid at the sale, unless there are stipulations in the agreement.

POSSESSION

> Upon foreclosure, if the mortgagor is in possession of the property, he will retain possession
during the redemption period—1 year from the date of sale
> If the winning bidder wants possession during the redemption period, he may execute a
bond in the amount equivalent to the use of the property for 12 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 the Act. Upon approval, a writ of possession will be issued in his
favor.
> If the winning bidder is able to secure possession, the mortgagor may petition that the sale
is set aside and the writ of possession be cancelled on the ground that he wasn't in default
or that the sale wasn't made in accordance with Act 3135. This must be filed within 30
days from issuance of the writ of possession.

RIGHT OF REDEMPTION

> The debtor, his successors-in-interest, or any judicial creditor or judgment creditor of said
debtor, or any person having a lien on the property subsequent to the mortgage or deed of trust
under which the property is sold, may redeem the same at any time WITHIN THE TERM OF
1 YEAR FROM AND AFTER THE DATE OF THE SALE and such will be governed by the Rules of Court
> When the property is redeemed after the purchaser has been given possession, the redeemer
is entitled to deduct from the price of redemption any rentals that said purchaser may have
collected in case the property or any part thereof was rented. If the property was used as his own
dwelling, it being town property, or used it gainfully, it being rural property, the redeemer may
deduct from the
price the interest of 1% per month provided in the Rules of Court.
RULES OF COURT, RULE 39, SECTIONS 29 TO 31, AND 35

Sec. 29. Effect of redemption by judgment obligor, and a certificate to be delivered and
recorded thereupon; to whom payments on redemption made. If the judgment obligor redeems,
he must make the same payments as are required to effect a redemption by a
redemptioner, whereupon, no further redemption shall be allowed and he is restored to his
estate. The person to whom the
redemption payment is made must execute and deliver to him a certificate of redemption
acknowledged before a notary public or other officer authorized to take acknowledgments of
conveyances of real property. Such certificate must be filed and recorded in the registry of deeds of
the place in which the property is situated, and the registrar of deeds must note the record thereof on
the margin of the record of the certificate of sale. The payments mentioned in this and the last
preceding sections may be made to the purchaser r redemptioner, or for him to the officer who made
the sale.

Sec. 30. Proof required of redemptioner.

A redemptioner must produce to the officer, or person from whom he seeks to redeem, and serve with
his notice to the officer a copy of the judgment or final order under which he claims the right to
redeem, certified by the clerk of the court wherein the judgment or final order is entered; or, if he
redeems upon a mortgage or other lien, a memorandum of the record thereof, certified by the
registrar of deeds; or an original or certified copy of any assignment necessary to establish
his claim; and an affidavit
executed by him or his agent, showing the amount then actually due on the lien.

Sec. 31. Manner of using premises pending redemption; waste restrained.

Until the expiration of the time allowed for redemption, the court may, as in other proper cases,
restrain the commission of waste on the property by injunction, on the application of the purchaser
or the judgment obligee, with or without notice; but it is not waste for a person in possession of the
property at the time of the sale, or entitled to possession afterwards, during the period allowed for
redemption, to continue to use it in the same manner in which it was previously used; or to use
it in the ordinary course of husbandry; or to make the necessary repairs to buildings thereon while
he occupies the property.

Sec. 35. Right to contribution or reimbursement.

When property liable to an execution against several persons is sold thereon, and more than a
due proportion of the judgment is satisfied out of the proceeds of the sale of the property of one of
them, or one of them pays, without a sale, more than his proportion, he may compel a
contribution from the others; and when a judgment is upon an obligation of one of them, as
security for another, and the surety pays the amount, or any part thereof, either by sale of his
property or before sale, he may compel repayment from the principal.
GENERAL BANKING LAW OF 2000, SECTION 47

Sec. 47. Foreclosure of Real Estate Mortgage. - In the event of foreclosure, whether judicially
or extra-judicially, of any mortgage on real estate which is security for any loan or other
credit accommodation granted, the mortgagor or debtor whose real property has been sold
for the full or partial payment of his obligation shall have the right within one year after the sale
of the real estate, to redeem the property by paying the amount due under the mortgage deed,
with interest thereon at rate specified in the mortgage, and all the costs and expenses incurred by the
bank or institution from the sale and custody of said property less the income derived therefrom.
However, the purchaser at the auction sale concerned whether in a judicial or extra-judicial
foreclosure shall have the right to enter upon and take possession of such property
immediately after the date of the confirmation of the auction sale and administer the same in
accordance with law. Any petition in court to enjoin or restrain the conduct of foreclosure
proceedings instituted pursuant to this provision shall be given due
course only upon the filing by the petitioner of a bond in an amount fixed by the court
conditioned that he will pay all the damages which the bank may suffer by the enjoining or
the
restraint of the foreclosure proceeding.

Notwithstanding Act 3135, juridical persons whose property is being sold pursuant to an
extrajudicial foreclosure, shall have the right to redeem the property in accordance with this
provision
until, but not after, the registration of the certificate of foreclosure sale with the applicable Register of
Deeds which in no case shall be more than three (3) months after foreclosure, whichever is earlier.
Owners of property that has been sold in a foreclosure sale prior to the effectivity of this Act shall
retain their redemption rights until their expiration.

NOTES:
1. For judicial foreclosure, the redemption period is within one year. For extrajudicial, its
90 days from sale or registration.
2. The purpose is to give concession to the banks. Banks cannot get properties mortgaged
by those in financial distress.
3. The redemption price would be the mortgaged obligation plus the interest as stipulated in
the original obligation. Compare this with judicial foreclosure wherein the redemption price
is the original price. In this case, you have to pay more when redeeming from a bank.
4. There is immediate possession
5. A motion to enjoin would not be entertained unless secured by a bond.
6. Court will fix the amount of the bond. Normally, this would be the liability of the bank
plus costs. This remedied the loopholes in Act 3135—protect the bank during foreclosures.
This makes it hard to secure injunctions and it shortens the redemption period.

The action to quiet title, or remove clouds from title, to real estate, is a well-established remedy in

American law. It has for its purpose the quieting of title or removal of a cloud therefrom when there is

an apparently valid or effective instrument or other claim which in reality is void, ineffective, voidable

or unenforceable.[1]

In the Philippines, Article 476 of the New Civil Code provides the substantive law on the matter, while

Rule 63 of the Rules of Court provides for the procedure in bringing an action to quiet title, or to

remove clouds, from title to real property.

Litigants, however, commonly ask: is a quiet title suit the proper and speedy remedy to enforce one’s

claim over a property? And, can one, in the same quiet title suit, ask for reconveyance of title, or, for

settlement of a boundary?

A. QUIETING TITLE: ITS ORIGIN AND BASIS.

A quiet title action, or an action to remove cloud on title, is a remedy which originated in the courts of

equity. Such proceedings have for their purpose an adjudication that a claim of title to or an interest

in property, adverse to that of the claimant, is invalid, with the result that the claimant and those

claiming under him may forever be free from danger of the hostile claim.[2]

The basis of equitable relief for removal of a cloud in title is the principle that, because of the

inadequacy of the remedy at law, a deed or other instrument or proceedings constituting the cloud

may not be used injuriously or vexatiously to embarrass or affect the title of a plaintiff in

possession.[3] Stated differently, such remedy was developed by courts of equity, to prevent

multiplicity of actions, and, against repeated or continued trespasses or continuing or recurring

invasion of property rights. Suits to quiet or remove a cloud from title developed from what were

anciently termed “bills quia timet” or “bills of peace”, remedies which originated in and appertained to

the jurisdiction of the courts of chancery.[4]

B. THE APPLICABLE PHILIPPINE LAWS AND JURISPRUDENTIAL RULES ON QUIETING TITLE.

Article 476 and 478 of the New Civil Code provide that, “whenever there is a cloud on title to real

property or any interest therein, by reason of any instrument, record, claim, encumbrance or

proceeding which is apparently valid or effective but is in truth and in fact invalid, ineffective,

voidable, or unenforceable,” or “has been extinguished or has terminated, or has been barred by

extinctive prescription”, “and may be prejudicial to said title, an action may be brought to remove

such cloud or to quiet the title.”

Article 477 of the same Code provides that, the party who may bring an action to quiet title “must

have legal or equitable title to, or interest in the real property which is the subject matter of the

action.”

Thus, for an action to quiet title to prosper, two (2) indispensable requisites must concur, namely: (1)

the plaintiff or complainant has a legal or an equitable title to or interest in the real property subject of

action, and (2) the deed, claim, encumbrance or proceeding claimed to be casting cloud on his title
must be shown to be in fact invalid or inoperative despite its prima facie appearance of validity or

legal efficacy.

C. QUIETING TITLE AS AN ACTION TO ENFORCE OWNERSHIP OVER ONE’S PROPERTY.

To reiterate, the ground or reason for filing a complaint for quieting of title must be “an instrument,

record, claim, encumbrance or proceeding.” Thus, under recent laws and rules, and pursuant to the

maxim expresio mius est exclusio alterius, these grounds are EXCLUSIVE so that other reasons

outside of the purview of these reasons may not be considered valid for the same action.[5]

At present, the rule is, a quieting title action cannot be availed of for settling boundary disputes.[6]

Thus, in a situation where a party files an action against current possessors of a property he is

claiming, the proper action to be filed is not a quieting title action, but an action for ejectment.

Indeed, there is no instrument, record, claim, encumbrance or proceeding the existence of which

clouds the title of the landowner over the accretion or alluvion.[7] The subject matter in this situation

is merely the physical or material possession or possession de facto over the property.[8]

But, can the landowner seek a declaration of his ownership over the property in the same ejectment

case? The answer, of course, is, he cannot, as, after all, in ejectment cases, the questions to be

resolved simply are these: First, who had actual possession over the piece of real property? Second,

was the possessor ousted therefrom within one year from the filing of the complaint by force, threat,

strategy, or stealth? And lastly, does he ask for the restoration of his possession? Any controversy

over ownership rights should be settled after the party who had the prior, peaceful and actual

possession is returned to the property.[9]

Now, if the situation is, the party wants to file an action against current possessors and/or registered

owners of the property he is claiming, an ejectment case will of course not suffice. There must be a

separate action for him to be able to enforce his legal title over the property.

But then again, is an action for reconveyance the proper remedy, and not a quieting title action? And,

in a situation where the person already filed an action to quiet title, is there a need for him to

subsequently file a separate action for reconveyance of title?

An action for reconveyance is one that seeks to transfer property, wrongfully registered by another, to

its rightful and legal owner. Reconveyance is an action distinct from an action for quieting of title,

which is filed whenever there is a cloud on title to real property or any interest therein, by reason of

any instrument, record, claim, encumbrance or proceeding which is apparently valid or effective but is
in truth and in fact, invalid, ineffective, voidable, or unenforceable, and may be prejudicial to said title

for purposes of removing such cloud or to quiet title.[10]

To be sure, in several cases, the Supreme Court has allowed the treatment or characterization of an

action for reconveyance as an action to quiet title.[11] The question, however, is, in like manner, can

an action to quiet title be treated or characterized as an action for reconveyance, or even an action to

settle boundary disputes, so as to eliminate the need to file another action to enforce ownership or

effect transfer of title over a property?

It is the considered view that, the higher and nobler purpose of avoiding multiplicity of suits and

prevention of litigation must be taken into account in resolving this issue. After all, such purpose is,

in fact, one of the reasons for which equity interferes to remove a cloud on title.[12] Thus, it was held,

“equity will interfere in actions to quiet title to prevent multiplicity of suits where ample and perfect

justice can be done, or, as otherwise stated, it will interpose, in a proper case, to prevent a

multiplicity of suits, excessive litigation or circuitry of action.”[13]

Verily, multiplicity of suits may be avoided when a court taking cognizance of a quieting title case will

no longer be precluded from adjudicating the issue of transferring the title of the subject property to

its rightful owner, or even settling boundary disputes.

As held under American jurisprudence, “if a multiplicity of suits is inherent in a reference of the parties

to their legal remedies, a court of equity may take jurisdiction to determine confused boundaries.”[14]

Indeed, for as long as it can be shown that, there is an “instrument, record, claim, encumbrance or

proceeding” which constitutes a cloud on one’s title, the ancillary issue of disputed boundaries, which

is necessarily produced as an offshoot of such existence of a cloud, the same court where the action to

quiet title was instituted may likewise settle the issue of boundaries, or reconvey title to the rightful

owner.

Thus, in a scenario where a party, for example, institutes a special civil action for quieting of title,

because of the existence of another certificate of title over his property, which on its face is valid, but

which is in truth and in fact, invalid and prejudicial to his legal or equitable title, he may seek the

declaration of nullity of such title, and in the same case, seek settlement of the boundary dispute

between him and the registered owner, and even the reconveyance of the title to his name.