Traders Royal Bank vs. Court of Appeals, Patria Capay, et al G.R. No. 118862, Sept.

24,
1999 (315 SCRA 190)
"Torrens System"
"latches"
Facts:
A parcel of land owned by the spouses Capay was mortgage to and
subsequently extrajudicially foreclosed by Traders Royal Bank (TRB). To prevent
property sale in public auction, the Capays filed a petition for preliminary injunction
alleging the mortgage was void because they did not receive the proceeds of the loan. A
notice of lis pendens (suit pending) was filed before the Register of Deeds with the
notice recorded in the Day Book. Meanwhile, a foreclosure sale proceeded with the TRB
as the sole and winning bidder. The Capays title was cancelled and a new one was
entered in TRBs name without the notice of lis pendens carried over the title. The
Capays filed recovery of the property and damages. Court rendered a decision declaring
the mortgage was void for want of consideration and thus cancelled TRBs title and
issued a new cert. of title for the Capays.
Pending its appeal before the court, TRB sold the land to Santiago who subsequently
subdivided and sold to buyers who were issued title to the land. Court ruled that the
subsequent buyers cannot be considered purchasers for value and in good faith since
they purchase the land after it became a subject in a pending suit before the court.
Although the lis pendens notice was not carried over the titles, its recording in the Day
Book constitutes registering of the land and notice to all persons with adverse claim over
the property. TRB was held to be in bad faith upon selling the property while knowing it
is pending for litigation. The Capays were issued the cert. of title of the land
in dispute while TRB is to pay damages to Capays.
Issue:
1.
Who has the better right over the land in dispute?
2.
Whether or not TRB is liable for damages
Ruling:
The court ruled that a Torrens title is presumed to be valid which purpose is to avoid
conflicts of title to real properties. When the subsequent buyers bought the property
there was no lis pendens annotated on the title. Every person dealing with
a registered land may safely rely on the correctness of the title and is not obliged to
interpret what is beyond the face of the registered title. Hence the court ruled that the
subsequent buyers obtained the property from a clean title in good faith and for value.
On one hand, the Capays are guilty of latches. After they filed the notice for lis pendens,
the same was not annotated in the TRB title. They did not take any action for 15 years to
find out the status of the title upon knowing the foreclosure of the property. In
consideration to the declaration of the mortgage as null and void for want of
consideration, the foreclosure proceeding has no legal effect. However, in as much as the
Capays remain to be the real owner of the property it has already been passed to

purchasers in good faith and for value. Therefore, the property cannot be taken away to
their prejudice. Thus, TRB is duty bound to pay the Capays the fair market value of the
property at the time they sold it to Santiago.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-46439 April 24, 1984
ANDREA M. MOSCOSO, petitioner,
vs.
COURT OF APPEALS and MAXIMINA L. MORON, respondents.
Jesus B. Velasco for petitioner.
Custodio P. Caete for private respondent.

GUERRERO, J.:+.wph!1
Petition for review on certiorari of the decision of the defunct Court of Appeals 1 (now
the Intermediate Appellate Court) in CAGR No. 52187-B entitled "Application for Land
Registration Under Act No. 496-Andrea M. Moscoso, applicant-appellant versus
Maximina L. Moron, et al., oppositors-appellees" which affirmed the judgment of the
Court of First Instance of Tacloban City in Land Registration Case No. N 134.
Sometime on March 22, 1966, petitioner applied for land registration of a 1,147 square
meters residential lot situated in the poblacion of the municipality of Palo, province of
Leyte, bounded and described in Survey Plan Psu-54699 of the then General Land
Registration Office as verified and approved under date June 16, 1927. Her application
substantially stated that petitioner is the owner in fee simple of the land and
improvements thereon as her acquisition by inheritance from her father, the late Pascual
Monge y Vigera who died on June 9, 1950, and that the same parcel of land is her
share in a partial partition of estate she and her brothers and sisters executed on May
22, 1964 at Palo, Leyte (Exhibit "K"); also, that she and her predecessors in interest
have been in continuous, public, actual and adverse possession of the land applied for
since time immemorial until the present; that at the last assessment for taxation, said lot
was assessed in her name under Tax Declaration No. 28260 dated May 24, 1964
(Exhibit H and that the taxes are fully paid up to the current year; that to the best of her

knowledge and belief, there is no incumbrance or any kind whatsoever affecting said
land nor any other person having interest therein, legal or equitable, in posession,
remainder, reversion or expectancy; and that the land is now being rented by lessees of
the applicant, namely, Angel Encenares, Olanda Bribe, Timoteo Noblejas, Felisa Adre,
Celestina Solana, Baltazar Collado, all of Palo, Leyte.
After due publication of the Notice of Initial Hearing of the petition in the Official Gazette,
Vol. 62, Nos. 46 and 47, issues dated November 14 and 21, 1966 (Exhibit "C"), only the
Highway District Engineer of Leyte as public oppositors, and Concordia Lanuncia,
Flaviano L. Marchadesch, Jr., and herein private respondent Maximina L. Moron as
private oppositors appeared for the initial hearing before the trial court.
The trial court summarily dismissed the opposition of the Highway District Engineer who
merely sought to secure a reservation for a road right-of-way in favor of the national
government in view of petitioner's willingness to annotate the same on the certificate of
title which might issue. The opposition of the private parties thus remained.
The written opposition substantially allege that they, including one Mrs. Apolonia L.
Marchadesch who died in 1963 and survived by her only issue, oppositor Flaviano L.
Marchadesch, are the illegitimate children of the late Zenona Lanuncia and the
recognized natural children of the late Pascual Monge who died in 1950 and father of
applicant Andrea M. Moscoso; that the late Zenona Lanuncia, from the age of three,
became a protegee of the late spouses, Saturnino Monge and Isidra Vigera Monge,
letigimate parents of Pascual Monge and Juan Monge, now deceased; that Isidra
Vigera Monge was the original owner of the parcel of land applied for; that Isidra
Monge, long before she died on April 15, 1915, and after Pascual Monge legally got
married to the mother of the applicant and brother and sisters, and in order to provide a
home and subsistence to the oppositors, their sister and mother, all of which are girls,
effected a verbal partition of her lands with her sons, Pascual, Juan and with the herein
oppositor, who were already at their teens, which, by virtue of said partition, the land
herein applied for registration passed to the hands of the oppositors for their home; that
the oppositors have no knowledge that this parcel of land forms part of the inheritance
of the applicant and of a partial partition among the applicant and her brother and
sisters; that the oppositors have, if not legal, an equitable title to the land as judged from
the circumstances surrounding the oppositors' case; they deny the allegation that
applicant and her predecessors in interest have been in continuous, public, actual and
adverse possession of the land from time immemorial, the truth being that the
oppositors exercised exclusive dominion over the land and are in actual and continuous
possession over it from time immemorial to the present and that should the verbal
partition effected before the death of Isidra Vigera Monge in 1915 being insufficient to
pass title to the oppositor, then by virtue of acquisitive prescription caused by the open,

continuous, uninterrupted, peaceful and adverse possession in favor of oppositors, they

are entitled to the land invoking the benefits of Chapter VIII of Commonwealth Act No.
141. 2
Upon the termination of the hearing on the merits, the Hon. Jesus N. Borromeo, then
Presiding Judge of the CFI, Tacloban City, rendered his decision dated December 22,
1971, directing that the title over the land should not be registered exclusively in the
name of the applicant since "it has been overwhelmingly established by them (the
private oppositors) that they and their sister Apolonia, who died in 1963, are the children
of Zenona Lanuncia and Pascual Monge resulting from the relations between the two
prior to the marriage of the latter with Guadalupe Oliver, mother of herein petitioner and
her brothers, Elpidio, Salvador, Remedios, Ruperto, and Abelardo (deceased), all
surnamed Monge. 3 Hence, the judgment decreed: t.hqw
IN VIEW OF ALL THE FOREGOING, judgment is hereby rendered
ordering the registration of title over the parcel of land situated in the
poblacion of the municipality of Palo, Province of Leyte, as described in
the Plan Psu-54699, Exhibit "E", and the technical description Exhibit "F",
in the name of the co-ownership of: (1) Andrea M. Moscoso, Filipino
citizen, of legal age, married to Salvador Moscoso, with postal address at
Bupsong, Antique for three-fourth (3/4) share; (2) Concordia Lanuncia,
Filipino citizen, of legal age, single, and a resident of Palo, Leyte, for onetwelfth (1/12) share; (3) Maximina L. Moron, Filipino citizen, of legal age,
married, and a resident of Palo, Leyte, for (1/12) share; and, (4) Flaviano
L. Marchadesch, Jr., son of the late Apolonia L. Marchadesch, for onetwelfth (1/12) share, subject to a reservation of a road right-of-way in favor
of the Government of the Republic of the Philippines.
After this judgment shall have become final, let the corresponding decree
of registration be issued.
SO ORDERED. 4
The trial court ruled that the verbal donation made by Isidra Vigera Vda, de Monge in
favor of Zenona Lanuncia and the latter's daughters by Pascual Monge because they
are of weaker sex, was ineffectual to transmit title of ownership over the land in question
and that their adverse claim of ownership even under extraordinary prescription of over
thirty years could not favor them because such claim is disputable due to their failure to
declare the property for tax purposes in their name after the death of Isidra Monge. The
trial court, however, gave significant weight to the carbon copy of a power of attorney
executed and signed by the late Pascual Monge on February 11, 1945 (Exhibit "2", "2-

A" to "2-C" in favor of Maximina L. Moron, wherein he stated that Maximins is his
daughter and appointed her as his Attorney-in-Fact to transact with the United States
Armed Forces in the Philippines in his behalf for the collection of rentals and other war
damage claims due and payable to him. The court ruled that the power of attorney was
an authentic writing wherein Maximina Lanuncia was voluntarily recognized as the
daughter of Pascual Monge. As found by the trial court thus, t.hqw
Precisely, it would appear that, in his power of attorney executed on
February 11, 1945 in favor of Maximina L. Moron, Exhibit "2", Pascual
Monge stated that Maximina is his daughter. The contention of petitioner
that said power of attorney was fraudulently altered in order to inse therein
the words "my daughter . . ." does not seem to be well-taken because,
from an examination of the document, the Court does not notice concrete
indications of alteration having been made in order to suit the ends of the
herein oppositors.
Thus, the Court is of the view that the late Pascual Monge, who had no
impediment to marry Zenona Lanuncia when Maximina was conceived
(Art. 119, Old Civil Code; Art, 269, New Civil Code) had voluntarily
recognized Maximina Lanuncia Moron as his child when in his power of
attorney executed on February 11, 1945, he mentioned her as his
daughter. ... 5
Petitioner assailed the Court's decision in his motion for reconsideration, contending
that the disposition of the estate should be governed by the Old Civil Code (Spanish
Civil Code of 1889) since he died on June 9, 1950 while the New Civil Code took effect
only on August, 1950; that assuming that the New Civil Code applies in the case at bar
the power of attorney (Exhibit "2") is not an authentic document to support voluntary
recognition because the words "my daughter" reveals a clear sign of erasure and is a
product of falsification as presented in the rebuttal testimony of her brother Elpidio
Monge and that said document is not even a public document because it was merely
acknowledged by the Municipal Mayor of Palo, Leyte who had no authority to
authenticate writings as public documents which could be done only by a notary public.
Acting upon the aforesaid motion for reconsideration, the Court modified its decision in
the Order dated May 25, 1972 with the following dispositive portion: t.hqw
IN VIEW OF THE FOREGOING, the judgment of December 22, 1971 is
hereby amended in the sense that the Court hereby orders the registration
of title over the parcel of land situated in the poblacion of the municipality
of Palo, Province of Leyte, as described in the Plan Psu-54699, Exhibit

"E", and the technical description Exhibit "F" in the name of the coownership of (1) Andrea M. Moscoso, Filipino citizen, of legal age, married
to Salvador Moscoso, with postal address at Bugasong, Antique, for 13/14
share; and (2) Maximina L. Moron for for share, subject to the reservation
of a road right-of-way in favor of the government of the Philippines.
After this judgment shall have become final, let the corresponding decree
of registration be issued.
SO ORDERED.1wph1.t
Not satisfied with the amended judgment, petitioner elevated the case to the defunct
Court of Appeals which affirmed the judgment of the lower court. Hence, the instant
petition before Us.
Petitioner assigns practically the same errors allegedly committed by the trial court
which were presented before the respondent Court of Appeals, to wit: t.hqw
I. The lower court erred in holding that Pascual Monge voluntarily
recognized Maximina Lanuncia Moron as his natural child by virtue of the
power of attorney (Exhibit "2") executed by him in favor of the latter.
II. The lower court erred in holding that said power of attorney (Exhibit "2")
is not materially altered when in fact it was erased to suit the ends of the
oppositors.
III. The lower court erred in appreciating said power of attorney (Exhibit
"2") as a public document.
IV. The lower court erred in making judicial pronouncements that
Maximina Lanuncia Moron as the acknowledged natural child of Pascual
Monge conferring upon her legal right to inherit from the whole estate of
the late Pascual Monge who died on June 9, 1950 when her claim over
the land subject of this land registration proceeding is that it was given to
their mother Zenona Lanuncia by Isidra Vigera and for their long
continuous possession acquired the same by acquisitive prescription.
V. The lower court err in making judicial pronouncement of recognition
without a formal complaint, hearing on the merit and neither has Maximina
Lanuncia Moron the status of a continuous possession of a natural child.

VI. The lower court erred in ordering the registration of the land applied for
registration in favor of the applicant, Andrea M. Moscoso, only 13/14 share
and to oppositor Maximina Lanuncia Moron 1/14 share in co-ownership.
The principal or decisive issue to be resolved herein is whether or not oppositorappellee Maximina L. Moron had been acknowledged by her illegitimate father, Pascual
Monge (now deceased) in view of which, as held by the trial court and affirmed by the
respondent appellate court, being an acknowledged natural daughter, she would be
entitled to 1/14 share in the land in question as her inheritance. In resolving this issue,
We are guided and must comply with the well-established rule that findings of fact of the
Court of Appeals may not be reviewed by the Supreme Court in an appeal by certiorari
where such findings are ably supported by substantial evidence on record, the same
being binding, final and conclusive. 6
Hence, the finding of the appellate court that the power of attorney, Exhibit "2", was not
materially altered before the same was presented to the court below; that it is "more
likely that a mistake was committed in the preparation thereof; that the person who
typed the document had to make a slight erasure and correction in typing correctly the
word "daughter" and that t e power of attorney, as corrected, was then given to Pascual
Monge and Maximina L. Moron for their signature. As such, the correction cannot be
considered a deliberate alteration or falsification as depicted by appellant", is a finding
of fact which cannot be disturbed. We agree with the court that said power of attorney is
an authentic writing wherein the father, Pascual Monge, voluntarily recognized
Maximina L. Moron as his daughter, and since Pascual Monge had the legal capacity to
contract marriage at the time of the conception, Maximina is a natural child, entitled to
share in the inheritance of the property in question.
It may be so as argued by the petitioner that where the findings of the Court of Appeals
are contrary to those of the trial court, a minute scrutiny by the Supreme Court is in
order and resort to the duly proven evidence becomes necessary, citing Gonlalez vs.
CA, G.R. No. 37453, May 25, 1979, 90 SCRA 183 and cases cited therein. We have in
fact noted that the trial court found no alteration in the power of attorney, Exhibit "2",
when it ruled that "from an examination of the document, the court does not notice
concrete indication of alteration having been made therein in order to suit the ends of
the herein oppositor." (Decision, pp. 21-22, Record on Appeal), whereas respondent
appellate court held that "(w)e find it more likely that a mistake was committed in the
preparation of the power of attorney that the person who typed the document had to
make a slight erasure and correction in typing correctly the word "daughter" and that the
power of attorney, as corrected was then given to Pascual Monge and Maximina L.
Moron for their signature. As such, correction cannot be considered a deliberate
falsification, as depicted by appellant. "(CA Decision, p. 8)

We have indeed scrutinized minutely the documentary evidence in question, Exhibit "2",
as We have ordered the elevation of the original records before Us. We affirm the
holding of the appellate court that "What clearly appears to be the case, upon clear
examination, is that there is no erasure of the portion whereon "my" was typed. If, really,
such 14-letter word was erased and in lieu thereof the word "daughter" was typed or
superimposed, the erasure would be very noticeable and visible as the word "daughter",
which is shorter by six letters, cannot fully cover the space occupied by 1,
administratrix". This could be easily seen by the naked eye when the document, as in
the instant case, was executed more than 25 years ago and has turned yellow with age.
But this is not the case." There is no inconsistency between the two findings of the trial
and appellate courts. Both support the authenticity of the document in ruling that there
was no deliberate falsification, which We uphold.
Petitioner's contention that the Court of First Instance, acting as a land registration
court, has no jurisdiction to pass upon the issue whether the oppositor is the
acknowledged natural child of Pascual Monge, is untenable. We have a number of
cases that answer petitioner's position. Thus, in the case of Florentino vs. Encarnacion,
G.R. No. L-27697, Sept. 30,1977, 79 SCRA 193, 204-205, We ruled: t.hqw
Petitioner-appellants' third assignment of error is not well taken. Firstly, the
otherwise rigid rule that the jurisdiction of the Land Registration Court,
being special and limited in character and proceedings thereon summary
in nature, does not extend to cases involving issues properly litigable in
other independent suits or ordinary civil actions, has time and again been
relaxed in special and exceptional circumstances, (See Government of P.I.
vs. Serafica, 61 Phil. 93 (1934); Caoibes vs. Sison, 102 Phil. 19 (1957);
Luna vs. Santos, 102 Phil. 588 (1957); Cruz vs. Tan, 93 Phil. 348 (1953);
Gurbax Singh Pabla and Co. vs. Reyes, 92 Phil. 117 (1952)). From these
cases, it may be gleaned and gathered that the peculiarity of the
exceptions is based not alone on the fact that the Land Registration
Courts are likewise the same Courts of First Instance, but also the
following premises: (1) Mutual consent of the parties or their acquiescence
in submitting the aforesaid issues for the determination by the court in the
registration proceedings; (2) Full opportunity given to the parties in the
presentation of their respective sides of the issues and of the evidence in
support thereto; (3) Consideration by the court that the evidence already
of record is sufficient and adequate for rendering a decision upon these
issues. (Aglipay vs. De Los Reyes, L-12776, March 23, 1960) ...
Upon a scrutiny of the proceedings in the trial court, We find that petitioner filed a
Motion for New Trial and/or Reconsideration wherein she assailed the ruling of the trial

court that based upon Exhibit "2", the power of attorney, the oppositor was an
acknowledged natural child of the late Pascual Monge and entitled to a portion of the
land subject of the land registration proceedings. She claimed that the document was
not authentic and not a public document. In effect, petitioner acquiesced in submitting
the issue as to the status of the oppositor as an acknowledged natural child entitled to
successional rights and had the full opportunity to dispute the authenticity of the
document in question as in fact, applicant's brother, Elpidio Monge, gave rebuttal
testimony to support petitioner's theory that the document was a product of a
falsification, which the trial court did not believe. Moreover, the court considered and
deemed the evidence already of record sufficient and adequate for rendering a decision
upon the issue thus raised. In doing so, We find no abuse of discretion committed by
the trial court.
In addition, considerations of speedy justice and avoidance of multiplicity of suits impel
Us to hold and rule that under the facts of the case at bar, the trial court, acting as a
land registration court, may adjudicate the land sought to be registered to either or both
of the applicant and oppositor, in whole or in part, based on evidence submitted to the
court showing that the party has proper title for registration. (Section 37, Act 496.)
In any event, as the Supreme Court said in Nicanor T. Santos vs. Rosa Ganayo, L31854, Sept. 9. 1972, 116 SCRA 431, "Whether a particular matter should be resolved
by the Court of First Instance in the exercise of its general jurisdiction or of its limited
jurisdiction as a special court (Probate, Land Registration, etc.) is in reality not a
jurisdictional question. It is in essence a procedural question involving a mode of ppractice which may be waived." In meeting the issue raised by the oppositor as to her
status as an acknowledged natural child as a result of her voluntary recognition
appearing in Exhibit "2", the oppositor (now the petitioner herein) had waived the
procedural question and she may not be allowed to raise the same in the present
petition.
The proceedings for the registration of title to land under the Torrens system is an action
in rem not in personamhence, personal notice to all claimants of the res is not
necessary to give the court jurisdiction to deal with and dispose of the res, and neither
may lack of such personal notice vitiate or invalidate the decree or title issued in a
registration proceeding, for the State, as sovereign over the land situated within it, may
provide for the adjudication of title in a proceeding in rem or in the nature of a
proceeding in rem which shall be binding upon all persons, known or unknown. (City of
Manila vs. Lack et al., 19 Phil. 324, 337; Roxas vs. Enriquez, 29 Phil. 31; Director of
Lands vs. Roman Catholic Archbishop of Manila, 41 Phil. 120; Aguilar vs. Caogdan, 105
Phil. 661).

Under the above doctrine, petitioner's assailment that "(t)he judicial pronouncement
(referring to the holding that the oppositor Maximins L. Moron is the acknowledged
natural child of Pascual Monge) which will become conclusive and far-reaching and in
effect binds the other heirs of Pascual Monge consisting of the brothers and sisters as
well as the nephews and nieces of the petitioner who are not parties in this prayer
proceedings " is untenable.
Earlier, We have affirmed the ruling of the appellate court that Exhibit "2" which is the
power of attorney is an authentic writing wherein the father, Pascual Monge, voluntarily
recognized Maximina L. Moron as his daughter, applying the provisions of Article 278,
New Civil Code, which provides that recognition shall be made in the record of birth, a
will, a statement before a court of record, or in any authentic writing. We apply Article
278, New Civil Code retroactively to the case of Maximina L. Moron although she was
born before the effectivity of the New Civil Code in view of the provisions of Article 2260
of the New Civil Code, which states: t.hqw
Art. 2260. The voluntary recognition of a natural child shall take place
according to this Code, even if the child was born before the effectivity of
this body of laws.
The reason for giving retroactive effect to Article 2260 is indicated in the Report of the
Code Commission, page 169, thus: "The liberalized mode of recognition is in harmony
with the aim of the proposed code to do justice to illegitimate children. Hence, its
retroactive effect." (See Civil Code Annotated by Padilla, Vol. VII, 1975 Ed., p. 709).
In Caridad Cruz Vda. de Sy-Quia vs. Court of Appeals and Jose Pedro Reynaldo SyQuia, G.R. No. 62283, Nov. 25, 1983, the Supreme Court squarely held: t.hqw
... Article 2260 of (the Civil Code of the Philippines) provides that 'the
voluntary recognition of a natural child shall take place according to this
Code, even if the child was born before the effectivity of this body of laws'
or before August 30, 1950. Hence, Article 278 may be given retroactive
effect (p. 169, Report of the Code Commission, 7 Padilla, Civil Code, 1975
Ed., p. 709).
Under the Spanish Civil Code of 1889, an acknowledged natural child is entitled to ... "3.
To receive the hereditary portion determined by this Code." (Article 134). This hereditary
portion is fixed under Article 840 which states: t.hqw
Art. 840. When the testator leaves legitimate children or descendants, and
also natural children, legally acknowledged, each of the latter shall be

entitled to one-half of the portion pertaining to each of the legitimate

children who have not received any betterment, provided that it may be
included within the freely disposable portion, from which it must be taken
after the burial and funeral expenses have been paid.
The same share which is one-half of the legitime of each of the legitimate children or
descendants is given to each of the acknowledged natural children under Article 895 of
the New Civil Code, which reads: t.hqw
Art. 895. The legitime of each of the acknowledged natural children and
each of the natural children by legal fiction shall consist of one-half of the
legitime of each of the legitimate children or descendants.
The final adjudication made by the trial court in its Order dated May 25, 1975 (affirmed
by the Court of Appeals) directed the registration of the land in question in the name of
the co-ownership of petitioner Andrea M. Moscoso for 13/14 share and Maximina L.
Moron, the oppositor, for 1/14 share in view of the court's realization that no
documentary evidence was presented to prove that the other oppositors, Concordia
Lanuncia and Apolonia Lanuncia (decease) and mother of oppositor Flaviano
Marchadesch, Jr. were acknowledged by Pascual Monge, In the interest of justice, We
must modify the above sharing in order to give the legal share of the oppositor as an
acknowledged natural child.
Since there are six (6) legitimate children including the petitioner Andrea M. Moscoso
who had previously acquired the shares of her five (5) co-heirs, and one (1)
acknowledged natural child, the oppositor Maximina L. Moron, herein private
respondent who is entitled to one-half (1/2) the share of each of the legitimate children
(Article 840, Spanish Civil Code; Article 895, New Civil Code), the proper sharing should
be 12/13 to Andrea M. Moscoso and 1/13 to Maximina L. Moron.
WHEREFORE, IN VIEW OF THE FOREGOING, the decision appealed from is hereby
MODIFIED in the sense that the adjudication of the land subject of the land registration
proceedings shall be in the co-ownership of petitioner-applicant Andrea M. Moscoso for
12/13 share and to oppositor-private respondent Maximina L. Moron for 1/13 share. In
all other aspects, the decision appealed from is hereby AFFIRMED. Costs against
petitioner.
SO ORDERED.1wph1.t
Heirs of Leopoldo Vencilao, Sr. vs. Court of Appeals, Spouses Sabas Gepalago, G.R. No.
123713, April 1, 1998
Fact:

Both petitioner and respondent claim ownership over a 3,625 sq.m land
located at Bohol. Petitioner claims ownership by virtue of inheritance from their father
who, during his lifetime took an uninterrupted possession over the land, declared the
property for taxation purpose and religiously paid the real estate tax. The respondent
claims ownership as registered owner of said lot as a portion of the lot owned by Pedro
Luspo who mortgaged his land to PNB and subsequently was foreclosed. The
respondents won as the highest bidder and they became the owner of that portion of
land. The lower court ruled in favor to the petitioners holding that they were in
continuous possession and cultivating the land for more than 30 years. Thus they
acquired the land by prescription. Although a Torrens Title is indefeasible and not
subject for prescription it is not when the respondents purchased the land from PNB
with prior knowledge that the land was in possession of the petitioners father.
Upon appeal the CA reversed the court ruling and declared the petitioners as the true
owners of the property.
Issue: Whether or not a land registered under the Torrens system can prescribe in the
instance case.
Held:
The court ruled that the land in dispute has been covered by a Torrens Title more than
30 yrs before the petitioners instituted the present action. Sec. 47 of PD 1529, otherwise
known as the Property Registration Decree states that no land under the Torrens
System be acquired through prescription. Such title is indefeasible. It is wrong to
contend that the prior knowledge of the respondents on the possession of the
petitioners father defies the Torrens titles inprescriptibility because there is no flaw on
the title when they purchased it from PNB that was the registered owner of the land. The
vendee for value mainly relies on what appears on the face of the title and is not
compelled to go beyond that. Moreover, the petitioner was unusually silent with the
previous transactions involving the property when Luspo mortgaged the land to PNB,
when it was sold in public auction and the sale of the land to the vendees. The court
affirmed the decision of the CA declaring the respondents as the true owners of the land
in dispute.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION

G.R. No. L-54276 August 16, 1991

DIRECTOR OF LANDS, petitioner,
vs.

IGLESIA NI KRISTO and HON. DOMINGO D. PANIS, Presiding Judge, Court of

First Instance of Zambales and Olongapo, Br. III, respondents.

NARVASA, J.:p
Application of the doctrine laid down in 1986 in Director of Lands v. I.A.C. 1 is all that is
necessary to resolve the issue presented in the appeal at bar.
The petitioner takes no issue with the factual findings of the Registration Court. In its
petition 2 it makes the following recitation of the relevant facts, viz.:
Respondent Iglesia ni Kristo filed an application for the registration and
confirmation of title over a parcel of land, with an area of 280 sq. meters,
situated at Barrio Consuelo Sur, Municipality of San Marcelino, Province of
Zambales. The application ... was docketed in the Court of First Instance
of Zambales & Olongapo, Branch III (presided by respondent Judge) as
LRC No. N-187-0.
Petitioner (Republic) opposed the application on the ground that the
** Iglesia ni Kristo is a private corporation, and that under Art. XIV, sec.
11, of the Constitution, private corporations cannot acquire lands of the
public domain but can only hold them by lease in an area not exceeding
1,000 hectares. ... It appears that the applicant acquired the property in
question from Gregorio Rolls and Romualdo Rolls (both of San Marcelino,
Zambales) on May 23,1946, as shown by the Deed of Sale (Exhibit 'I').
After acquiring the land, applicant had it declared for taxation
purposes. ... ... The latest tax declaration of this same parcel of land starts
with the year 1974 as per Tax Dec. No. 4763 .... The land is exempt from
payment of Realty Tax, being devoted primarily for religious purposes
(Exhibit N).
Without passing upon the Government's contention that respondent
Iglesia ni Kristo was disqualified from acquiring the land in question, the
trial court rendered judgment on June 2,1980 decreeing the registration of
the land in the name of the respondent (Iglesia). The dispositive portion of
the decision reads:
WHEREFORE, judgment is hereby rendered registering and
confirming the title of the applicant, Iglesia ni Kristo with its

Executive Minister Erao G. Manalo as corporation sole with

office and postal address at corner of Central and Don
Mariano Marcos Avenues, Diliman, Quezon City, over the
parcel of land situated at Barrio Consuelo Sur, Municipality
of San Marcelino, Province of Zambales, with an area of 280
sq. m. covered by Plan PSU-03-000947. (Exhibit "F").
SO ORDERED.
(N.B. The decision also makes the finding that since acquiring the land,
the Iglesia ni Kristo "has been in open, public, adverse, peaceful and
continuous possession in the concept of an owner thereof to the present
time," having in fact "put up a chapel made of concrete materials and
galvanized iron for its roofing;" and that the land is not also within any
military or naval reservation.)
It is this decision of June 2, 1980 that is subject of the Government's petition for review
on certiorari at bar.
The petition will have to be denied, in accordance with the judgment of this Court en
banc in Director of Lands v. Intermediate Appellate Court handed down on December
29, 1986, 3 involving substantially similar facts. That judgment reconsidered and
declared "no longer ... binding precedent," Manila Electric Company v. CastroBartolome, et al., promulgated on June 29, 1982, 4 and instead adopted the dissenting
opinion therein 5 (based on a line of cases beginning with Carino v. Insular
Government in 1909 6 thru Susi v. Razon in 1925 7down to Herico v. Dar in 1980. 8
In that case, Director of Lands v. I.A.C. a private corporation, Acme Plywood & Veneer
Co., Inc. purchased a tract of land in 1962 from Mariano Infiel and Acer Infiel, two
members of the Dumagat tribe, but applied with the Court for registration of its title over
the land under the Torrens Act only in July, 1981, long after the effectivity of the 1973
Constitution-which inter alia prohibits private corporations from holding alienable lands
of the public domain, except by lease not to exceed 1,000 hectares (a prohibition not
found in the 1935 Constitution, in force in 1962 when Acme purchased the land in
question). There being no question that Acme and its predecessors-in-interest had
possessed and occupied the land for more than the required 30-year period prescribed
in Section 48 of the Public Land Act (Commonwealth Act No. 141, as amended), 9 the
question presented to the Court en banc was whether or not the title that Acme had
acquired in 1962 could be confirmed in its favor in proceedings instituted by it in 1981
when the 1973 Constitution was already in effect, having in mind the prohibition therein

against private corporations holdings lands of the public domain. That question the
Court en banc answered in this wise:
... (The weight of authority is) that open, exclusive and undisputed
possession of alienable public land for the period prescribed by law
creates the legal fiction whereby the land, upon completion of the requisite
period ipso jure and without the need of judicial or other auction, ceases to
be public land and becomes private property.
Herico (supra), in particular, appears to be squarely affirmative:
... Secondly, under the provisions of Republic Act No. 1942,
which the respondent Court held to be inapplicable to the
petitioner's case, with the latter's proven occupation and
cultivation for more than 30 years since 1914, by himself and
by his predecessors-in-interest, title over the lands has
vested on petitioner so as to segregate the land from the
mass of public land. Thereafter, it is no longer disposable
under the Public Land Act as by free patent. ...
As interpreted in several cases when the conditions as
specified in the foregoing provision are complied with, the
possessor is deemed to have acquired, by operation of law a
right to a grant, a government grant, without the necessity of
a certificate of title being issued. The land, therefore, ceased
to be of the public domain and beyond the authority of the
Director of Lands to dispose of. The application for
confirmation is a mere formality, the lack of which does not
affect the legal sufficiency of the title as would be evidenced
by the patent and the Torrens title to be issued upon the
strength of said patent.
Nothing can more clearly demonstrate the logical inevitability of
considering possession of public land which is of the character and
duration prescribed by statute as the equivalent of an express grant from
the State than the dictum of the statute itself (Section 48 (b) of C.A. No.
141) that the possessor(s) "... shall be conclusively presumed to have
performed all the conditions essential to a Government grant and shall be
entitled to a certificate of title ... ." No proof being admissible to overcome
a conclusive presumption, confirmation proceedings would, in truth, be
little more than a formality, at the most limited to ascertaining whether the

possession claimed is of the required character and length of time; and

registration thereunder would not confer title, but simply recognize a title
already vested. The proceedings would not originally convert the land from
public to private land, but only confirm such a conversion already effected
by operation of law from the moment the required period of possession
became complete. As was so well put in Carino, '... (T)here are indications
that registration was expected from all, but none sufficient to show that, for
want of it, ownership actually gained would be lost. The effect of the proof,
wherever made, was not to confer title, but simply to establish it, as
already conferred by the decree, if not by earlier law.
xxx xxx xxx
... The purely accidental circumstance that confirmation proceedings were
brought under the aegis of the 1973 Constitution which forbids
corporations from owning lands of the public domain cannot defeat a right
already vested before that law came into effect, or invalidate transactions
then perfectly valid and proper. This Court has already held, in analogous
circumstances, that the Constitution cannot impair vested rights.
The substantial identity of the facts and issues between the case at bar and Director of
Lands v. I.A.C. being undeniable, and being cited to no persuasive reason to decline to
apply the doctrine in the latter to the former, the Court, as aforesaid, has no alternative
except to rule adversely to the petitioner.
WHEREFORE, the petition is DENIED and the judgment of the respondent Court dated
June 2, 1980 in LRC No. N-187-0 entitled, "Iglesia ni Kristo, etc. v. Director of Lands, et
al.," is AFFIRMED. No costs.
SO ORDERED.
Cruz, Gancayco, Grio-Aquino and Medialdea, JJ., concur.