GABINO VAGILIDAD, JR.

Promulgated:
and DOROTHY VAGILIDAD,
Respondents. November 16, 2006
x--------------------------------------------------x
DECISION

PUNO, J.:

This is a Petion for Review on Certiorari of the Decision[1] and Resolution[2] of the Court of Appeals in CA-G.R. No. CV-68318
dated March 19, 2003 and November 13, 2003, respectively, reversing and setting aside the decision of the Regional Trial
Court of Antique, Sixth Judicial Region, Branch II, in Civil Case No. 2825 dated January 26, 1999.

The facts are stated in the assailed Decision[3] of the appellate court, viz.:
A parcel of land, Lot No. 1253, situated in Atabay, San Jose, Antique, measuring 4,280 square meters,
was owned by Zoilo [Labiao] (hereafter ZOILO) as per Original Certificate of Title No. RO-2301 issued
on March 3, 1931. Sometime in 1931, ZOILO died. Subsequently, on May 12, 1986, Loreto Labiao (hereafter
LORETO), son of ZOILO, sold to Gabino Vagilidad Jr. (hereafter GABINO JR.) a portion of Lot No. 1253
(hereafter Lot 1253-B), measuring 1,604 square meters as evidenced by the Deed of Absolute Sale executed
by LORETO.
In view of the death of ZOILO, his children, LORETO, Efren Labiao (hereafter EFREN) and
Priscilla Espanueva (hereafter PRISCILLA) executed an Extrajudicial x x x Settlement of Estate dated January
20, 1987, adjudicating the entire Lot No. 1253, covering 4,280 square meters, to LORETO. On January 29,
1987, Transfer Certificate of Title (TCT) No. T-16693 was issued in favor of LORETO, EFREN and PRISCILLA, but
on even date, TCT No. T-16693 was cancelled and TCT No. T-16694, covering the said property, was issued in
the name of LORETO alone.
On July 31, 1987, GABINO JR., as petitioner, filed a Petition for the Surrender of TCT No. T-16694,
covering Lot No. 1253, with the Regional Trial Court of San Jose City, Sixth Judicial Region, against LORETO,
docketed as Cadastral Case No. 87-731-A. The plaintiff alleged that, being the owner of x x x Lot No. 1253-B,
under TCT No. T-16694, by virtue of the sale that took place on May 12, 1986, he is entitled to ask for the
surrender of the owners copy of TCT No. T-16694 to the Register of Deeds of Antique in order to effect the
transfer of title to the name of the petitioner. However, as per motion of both counsels[,] since the parties
seemed to have already reached an amicable settlement without the knowledge of their counsels, the trial
court issued an Order dated March 21, 1994 sending the case to the archives.
On September 21, 1988, [GABINO JR.] paid real estate taxes on the land he bought from LORETO as
per Tax Declaration No. 1038 where the property was specified as Lot No. 1253-B. GABINO JR. thereafter sold
the same lot to Wilfredo Vagilidad (hereafter WILFREDO) as per Deed of Absolute Sale dated December 7,
1989. On even date, Deed of Absolute Sale of a Portion of Land involving the opt-described property was also
executed by LORETO in favor of WILFREDO. The aforementioned deeds, which were both executed on
December 7, 1989 [and] notarized by Atty. Warloo Cardenal[,] [appear] to have been given the same entry
number in his notarial books as both contained the designation Document No. 236, Page No. 49, Book No. XI,
Series of 1989[.]
Corollarily, on February 14, 1990, the sale of Lot No. 1253-B to WILFREDO was registered with the
Registry of Deeds of the Province of Antique under Entry No. 180425. Consequently, TCT No. T-18023,
cancelling TCT No. 16694, was issued in favor of WILFREDO pursuant to the Deed of Absolute Sale
dated December 7, 1989.
On October 24, 1991, spouses WILFREDO and LOLITA obtained a loan from the Philippine National
Bank (PNB for brevity) in the amount of P150,000.00 and mortgaged Lot No. 1253-B as collateral of the said
loan and the transaction was inscribed at the back of TCT No. 18023 as Entry No. 186876. Subsequently, the
xxx real estate mortgage was cancelled under Entry No. 191053 as per inscription dated November 17,
1992 in xxx TCT No. 18023.
Subsequently, WILFREDO obtained another loan from Development Bank of the Philippines (DBP for
brevity) in the amount of P200,000.00 and mortgaged Lot No. 1253-B as collateral of the xxx loan and the
transaction was inscribed at the back of TCT No. 18023 as Entry No. 196268. The said loan was paid and,
consequently, the mortgage was cancelled as Entry No. 202500.

On September 29, 1995, spouses GABINO and Ma. Dorothy Vagilidad (hereafter DOROTHY), as plaintiffs, filed
a Complaint for Annulment of Document, Reconveyance and Damages, with the Regional Trial Court of
Antique, Sixth Judicial Region, Branch 11, against spouses WILFREDO and Lolita Vagilidad (hereafter LOLITA),
docketed as Civil Case No. 2825. The plaintiffs claimed that they are the lawful owners of Lot No. 1253-B
which was sold to him by LORETO in 1986. They alleged that [GABINO JR.] is a nephew of defendant
WILFREDO. They likewise raised that when GABINO SR. died, defendant WILFREDO requested GABINO JR. to
transfer the ownership of Lot No. 1253-B in defendant WILFREDOs name for loaning purposes with the
agreement that the land will be returned when the plaintiffs need the same. They added that, pursuant to
the mentioned agreement, plaintiff GABINO JR., without the knowledge and consent of his spouse,
DOROTHY, executed the Deed of Sale dated December 7, 1989 in favor of defendant WILFREDO receiving
nothing as payment therefor. They pointed out that after defendant WILFREDO was able to mortgage the
property, plaintiffs demanded the return of the property but the defendants refused to return the same. The
plaintiffs claimed that the same document is null and void for want of consideration and the same does not
bind the non-consenting spouse. They likewise prayed that the defendant be ordered to pay the plaintiffs not
less thanP100,000.00 as actual and moral damages, P10,000.00 as attorneys fees and P5,000.00 as litigation
expenses.
For their part, the defendants, on January 15, 1996, filed their Answer, denying the material
allegations of the plaintiffs. Defendants claimed that they are the lawful owners of Lot No. 1253-B. They
alleged that LORETO, with conformity of his wife, sold to them Lot No. 1253 on December 7, 1989
for P5,000.00 and the transaction was registered with the Register of Deeds of the Province of Antique under
Entry No. 180425. They added that, subsequently, TCT No. T-18023, covering Lot No. 1253-B, was issued in
favor of the defendants. Hence, they claimed that the plaintiffs be directed to pay the
defendants P200,000.00 as moral damages, P50,000.00 as exemplary damages, P20,000.00 as attorneys fees
and P30,000.00 for litigation expenses.[4]

The trial court ruled in favor of petitioners WILFREDO and LOLITA and held that LORETO did not validly convey Lot No. 1253-B
to GABINO, JR. on May 12, 1986 since at that time, the heirs of ZOILO had not partitioned Lot No. 1253.[5] It ruled that LORETO
could only sell at that time his aliquot share in the inheritance. He could not have sold a divided part thereof designated by
metes and bounds. Thus, it held that LORETO remained the owner of the subject lot when he sold it to WILFREDO
on December 7, 1989. It further found that there was no proof that WILFREDO knew of the sale that took place between
LORETO and GABINO, JR. on May 12, 1986. The dispositive portion of the decision states:
WHEREFORE, in view of the foregoing pronouncements and a preponderance of evidence, judgment is
hereby rendered:
1. FINDING the defendants WILFREDO VAGILIDAD and LOLITA VAGILIDAD to have duly acquired ownership of
Lot No. 1253-B containing an area of 1,604 square meters, more or less, situated in San Jose, Antique;
2. SUSTAINING the validity of Transfer Certificate of Title No. T-18023 covering the subject Lot No. 1253-B
and issued in the name of the defendant WILFREDO VAGILIDAD, married to the defendant LOLITA
VAGILIDAD;
3. DISMISSING the complaint of the plaintiffs GABINO VAGILIDAD, JR. and MA. DOROTHY VAGILIDAD, as well
as the counterclaims of the defendants WILFREDO VAGILIDAD and LOLITA VAGILIDAD and of the defendants
LORETO LABIAO and FRANCISCA LABIAO; and
4. PRONOUNCING no cost.[6]

GABINO, JR. and DOROTHY filed an appeal with the Court of Appeals. The appellate court reversed and set aside the decision
of the court a quo, viz.:
WHEREFORE, premises considered, the Decision dated January 26, 1999 of the Regional Trial Court of
Antique, Sixth Judicial Region, Branch 11, in Civil Case No. 2825, is hereby REVERSED and SET ASIDE and a
new one is entered: (1) declaring the Deed of Absolute Sale [of Portion of Land] dated December 7, 1989
executed by appellee LORETO in favor of appellee WILFREDO null and void; (2) ordering the defendantsappellees WILFREDO and LOLITA to reconvey Lot No. 1253-B to plaintiffs-appellants GABINO, JR. and
DOROTHY; and (3)
ordering the defendants-appellees to pay the plaintiffs-appellants P100,000.00
damages, P10,000.00 as attorneys fees and P5,000.00 as litigation expenses.[7]

as

moral

The appellate court ruled that the sale made by LORETO in favor of GABINO, JR. on May 12, 1986 is valid. The rights of
LORETO to succession are transmitted from the moment of ZOILOs death in 1931. Thus, when LORETO sold the 1,604-square
meter portion of Lot No. 1253 to GABINO JR., he already had the right as co-owner to his share to Lot No. 1253, even if at that
time the property had not yet been partitioned. Consequently, the sale made by LORETO in favor of WILFREDO on December
7, 1989 is void because LORETO and FRANCISCA were no longer the owners of Lot No. 1253-B as of that time. The appellate
court also held WILFREDO and LOLITA liable for moral damages for falsifying the fictitious deeds of sale on December 7, 1989.

WILFREDO and LOLITA moved for reconsideration but the motion was denied in the questioned Resolution dated November
13, 2003. Hence, this petition for review on certiorari raising the following errors:
I
THE HONORABLE COURT OF APPEALS ERRED IN NOT APPLYING ARTICLE 1349 AND ARTICLE 1460 OF THE
NEW CIVIL CODE IN THE CASE AT BAR.
II
THE HONORABLE COURT OF APPEALS ERRED IN NOT APPLYING THE PROVISION OF ARTICLE 1544 OF THE
NEW CIVIL CODE AND THE DOCTRINE OF DOUBLE SALETHAT THE BUYER WHO IS IN POSSESSION OF
THE TORRENS TITLE AND HAD THE DEED OF SALE REGISTERED MUST PREVAIL.
III
THE HONORABLE COURT OF APPEALS ERRED IN NOT APPLYING ARTICLE 1391 OF THE NEW CIVIL CODE AND
THE DOCTRINE THAT IN CASE OF FRAUD, ACTION FOR RECONVEYANCE MUST BE BROUGHT WITHIN FOUR (4)
YEARS FROM THE DISCOVERY OF THE FRAUD.
IV
THE HONORABLE COURT OF APPEALS ERRED IN AWARDING PRIVATE RESPONDENT MORAL DAMAGES,
ATTORNEYS FEES AND LITIGATION EXPENSES.[8]

We deny the petition.

I
First, petitioners contend that the Deed of Absolute Sale between LORETO and GABINO, JR. does not have a determinate
object. They anchor their claim on the following discrepancies: (1) the object of the Deed of Absolute Sale between LORETO
and GABINO, JR. is Lot No. 1253 with an area of 1,604 square meters; (2) the object of the Deed of Absolute Sale of Portion of
Land between LORETO and WILFREDO is a portion of Lot No. 1253, known as Lot No. 1253-B, also with an area of 1,604
square meters;[9] (3) the Deed of Absolute Sale between LORETO and GABINO, JR. shows that its object, Lot No. 1253, is not
registered under the Land Registration Act nor under the Spanish Mortgage Law; and (4) the property subject of this action,
Lot No. 1253-B, was taken from Lot No. 1253 containing an area of 4,280 square meters previously registered in the name of
ZOILO under Original Certificate of Title (OCT) No. RO-2301.[10] With these discrepancies, petitioners contend that either the
Deed of Absolute Sale between LORETO and GABINO, JR. does not have a determinate object or that Lot No. 1253-B, the
subject parcel, is not the object thereof. Hence, absent a determinate object, the contract is void. They rely on Articles 1349
and 1460 of the Civil Code, viz.:
Art. 1349. The object of every contract must be determinate, as to its kind. The fact that the quantity is not
determinate shall not be an obstacle to the existence of the contract, provided it is possible to determine the
same, without the need of a new contract between the parties.

Art. 1460. A thing is determinate when it is particularly designated or physically segregated from all others of
the same class.

The requisite that a thing be determinate is satisfied if at the time the contract is entered into, the thing is
capable of being made determinate without the necessity of a new or further agreement between the
parties.
Petitioners err. The evidence on record shows that Lot No. 1253-B, the subject parcel, and the lot described as Lot No. 1253 in
the Deed of Absolute Sale of May 12, 1986between LORETO and GABINO, JR., are the same. In the Deed of Absolute Sale, Lot
No. 1253 is described, viz.:
A parcel of land (Lot No. 1253 of the Cadastral Survey of San Jose), with the improvements thereon. Bounded
on the North [by] 1254 and 1255; on the South by road; on the East by 1253 and road on the West by 1240Angel Salazar; containing an area of 1,604 square meters more or less declared under Tax Declaration No.
4159.[11]

In the Deed of Absolute Sale of Portion of Land of December 7, 1989 between LORETO and WILFREDO, the subject parcel is
described, viz.:
A parcel of land (Lot No. 1253. Ap-06-00271) of the Cadastral Survey of San Jose, LRC Cad.
Rec. No. 936), situated at Atabay, San Jose, Antique. Bounded on the N. and E. along lines 12-3 by lot 1255; San Jose Cadastre; on the S. along line 3-4 by Road; on the W. along line 4-5
by Lot 1240; San Jose Cadastre; and on the N. along line 5-1 by Lot 1254, San Jose Cadastre
containing an area of [Four] Thousand Two Hundred Eighty (4,280) square meters, more or
less.
of which a portion of land subject of this sale is hereinbelow (sic) particularly described as follows, to wit:
A portion of Lot No. 1253-B of the Cadastral Survey of San Jose, situated at Atabay, San Jose,
Antique. Bounded on the North by Lot No. 1254; South by Road; West by Lot1253-A; and on
the East by Lot No. 1253-C; containing an area of 1,604 square meters, more or less.[12]

The description of Lot No. 1253, the object of the Deed of Absolute Sale, as not registered under Act No. 196[,] otherwise
known as the Land Registration Act, nor under the Spanish Mortgage Law[13] is a stray description of the subject parcel. It is
uncorroborated by any evidence in the records. This description solely appears on the Deed of Absolute Sale and the
discrepancy was not explained by LORETO who signed the Deed of Absolute Sale as vendor. LORETO does not, in fact, deny
the existence of the Deed of Absolute Sale. He merely counters that the Deed of Absolute Sale was purportedly a mortgage.
However, LORETOs claim that it was one of mortgage is clearly negated by a Certification[14] issued by the Bureau of Internal
Revenue dated May 12, 1986. It certified that LORETO was not required to pay the capital gains tax on the transfer of Lot No.
1253 to GABINO, JR. because the property was classified as an ordinary asset.

To be sure, petitioners could have easily shown that LORETO owned properties other than Lot No. 1253 to bolster their claim
that the object of the Deed of Absolute Sale was different from Lot No. 1253-B which is the object described in the Deed of
Absolute Sale of Portion of Land. They did not proffer any evidence.
The trial court itself comprehensively traced the origin of Lot No. 1253-B. It clearly demonstrated that the subject parcel was
originally part of the registered lot of ZOILO. It also showed how the subject parcel was eventually bounded by Lot No. 1253-A
on the West and by Lot No. 1253-C on the East, as the lot would be later described in the Deed of Absolute Sale of Portion of
Land.
The trial court found that ZOILO previously owned Lot No. 1253 under OCT No. RO-2301 issued on March 3, 1931.
On November 14, 1986, Entry No. 167922 was inscribed in the certificate of title, per Order dated March 30, 1978 of
Judge Noli Ma. Cortes of the then Court of First Instance of Antique, stating that it was a reconstituted certificate of

title.[15] Lot No. 1253 was subdivided by virtue of a subdivision plan dated June 19, 1987. On January 20, 1987, an Extrajudicial
Settlement of Estate executed by LORETO, EFREN and PRISCILLA was entered as Entry No. 170722. The OCT of ZOILO was
cancelled by TCT No. T-16693 in the names of LORETO, EFREN and PRISCILLA onJanuary 29, 1987. TCT No. T-16693 was
cancelled on the same day by TCT No. T-16694 in the name of LORETO alone. The TCT was partially cancelled by the issuance
ofTCTs covering Lot Nos. 1253-A, 1253-C and 1253-D. The TCT of Lot No. 1253-B was issued in the name of WILFREDO married
to LOLITA on February 15, 1990.WILFREDOs TCT No. T-18023 appears to be a transfer from LORETOs TCT No. T-16694.
II
Next, petitioners contend that the appellate court should have upheld the title of WILFREDO under Article 1544 of the Civil
Code and the doctrine of double sale where the buyer who is in possession of the Torrens Title must prevail. [16] First,
petitioners title was issued pursuant to the purported Deed of Absolute Sale of Portion of Land datedDecember 7, 1989.
Second, WILFREDO did not see any encumbrance at the back of the title of the subject lot when he purchased it from LORETO
on December 7, 1989. Thus, since he is not bound to go beyond the certificate of title, he has acquired the subject property in
due course and in good faith.

We disagree. Article 1544 of the Civil Code states, viz.:

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
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.

Petitioners reliance on Article 1544 is misplaced. While title to the property was issued in WILFREDOs name
on February 15, 1990, the following circumstances show that he registered the subject parcel with evident bad faith.

First, the Deed of Absolute Sale of Portion of Land dated December 7, 1989 between LORETO and WILFREDO is
tainted with blatant irregularities. It is a fact that the Deed of Absolute Sale of Portion of Land and the Deed of Absolute Sale
between GABINO, JR. and WILFREDO are of even date. Both Deeds had the same object Lot No. 1253-B. Both deeds were
notarized by Atty. Warloo Cardenal and bear the same entry in his notarial register: Document No. 236, Page No. 49, Book No.
XI, Series of 1989.
Second, the testimony of a disinterested witness, Febe Mabuhay, established the irregularity. Mabuhay used to work
as secretary for Atty. Cardenal and co-signed as witness in both Deeds. She stated that Atty. Cardenal instructed her to
prepare the two documents in the last week of November 1989. She was present when GABINO, JR. signed the Deed of
Absolute Sale. She testified that after GABINO, JR. left, LORETO and his wife FRANCISCA arrived and signed the Deed of
Absolute Sale of Portion of Land.[17] The Decision of the court a quo further states, viz.:
[Mabuhay testified that when she prepared the two documents, she] noticed the similarity of Lot No. 1253 as
technically described in both documents but she did not call the attention of Atty.Warlo[o] Cardenal. [She
likewise stated that Atty. Cardenal] specifically instructed her to assign the same document number to the
two documents notarized on December 7, 1989.[18]

Third, the testimony of Atty. Ernesto Estoya, then Clerk of Court of the Regional Trial Court of Antique, supports the claim that
there was bad faith in the execution of the Deed of Absolute Sale of Portion of Land. Atty. Estoya brought the notarial record
of Atty. Cardenal for the year 1989 pursuant to a subpoena. He stated that he had not brought both Deeds as required in the
subpoena because Doc. No. 236; Page No. 49; Book No. XI; Series of 1989 as entered in the notarial register of Atty. Cardenal
could not be found in the files. He further explained that the last document on page 48 of the notarial register of Atty.
Cardenal is Document No. 235, while the first document on page 49 is Document No. 239, leaving three unexplained gaps for
document numbers 236, 237 and 238. Atty. Estoya stated that he was not the one who received the 1989 notarial register of
Atty. Cardenal when the latter surrendered it since he assumed office only in 1994.[19]

Fourth, we give credence to the testimony of GABINO, JR. that LORETO and WILFREDO had employed the scheme to deprive
him and his wife of their lawful title to the subject property. The facts speak for themselves. WILFREDO knew that he could
not use the Deed of Absolute Sale executed in his favor by GABINO, JR. because the latter had no title to transfer. Without a
title, WILFREDO could not use the subject property as collateral for a bank loan. Hence, LORETO, who had refused to
surrender the title to GABINO, JR. and in whose name the land remained registered, had to execute the Deed of Absolute Sale
of Portion of Land in favor of WILFREDO. Hence, it was convenient for WILFREDO to deny the existence of the Deed of
Absolute Sale of December 7, 1989 between him and GABINO, JR. But the evidence on record shows that after he was able to
register the subject property in his name on February 15, 1990, WILFREDO used the title as collateral in the loans that he
contracted with the Philippine National Bank onOctober 24, 1991 and the Development Bank of the Philippines on December
1, 1993. This supports the claim of GABINO, JR. that WILFREDO needed the lot for loaning purposes.
With these corroborating circumstances and the following irrefragable documents on record, the evidence
preponderates in favor of GABINO, JR. One, he acquired Lot No.1253-B from LORETO on May 12, 1986[20] by virtue of the Deed
of Absolute Sale. Two, the Bureau of Internal Revenue issued a Certification, also on May 12, 1986, for the exemption from
the payment of capital gains tax when LORETO sold to him the subject parcel. Three, GABINO, JR. paid the real estate tax on
the subject parcel in 1987. Four, he filed a Petition for the Surrender of LORETOs title on July 31, 1987 so he could transfer the
title of the property in his name.

Petitioners likewise err in their argument that the contract of sale between LORETO and GABINO, JR. is void on the ground
that at the time of the sale on May 12, 1986, LORETO had a right to dispose only an aliquot part of the yet undivided property
of ZOILO. The subject parcel, being an inherited property, is subject to the rules of co-ownership under the Civil Code.

Co-ownership is the right of common dominion which two or more persons have in a spiritual part of a thing, not materially or
physically divided.[21] Before the partition of the property held in common, no individual or co-owner can claim title to any
definite portion thereof. All that the co-owner has is an ideal or abstract quota or proportionate share in the entire
property.[22]

LORETO sold the subject property to GABINO, JR. on May 12, 1986 as a co-owner. LORETO had a right, even before the
partition of the property on January 19, 1987,[23] to transfer in whole or in part his undivided interest in the lot even without
the consent of his co-heirs. This right is absolute in accordance with the well-settled doctrine that a co-owner has full
ownership of his pro-indiviso share and has the right to alienate, assign or mortgage it, and substitute another person for its
enjoyment.[24] Thus, what GABINO, JR. obtained by virtue of the sale on May 12, 1986 were the same rights as the vendor
LORETO had as co-owner, in an ideal share equivalent to the consideration given under their transaction.[25]

LORETO sold some 1,604 square meters of Lot No. 1253 to GABINO, JR. Consequently, when LORETO purportedly sold to
WILFREDO on December 7, 1989 the same portion of the lot, he was no longer the owner of Lot No. 1253-B. Based on the
principle that no one can give what he does not have,[26] LORETO could not have validly sold to WILFREDO on December 7,
1989 what he no longer had. As correctly pointed out by the appellate court, the sale made by LORETO in favor of WILFREDO
is void as LORETO did not have the right to transfer the ownership of the subject property at the time of sale.
III
Petitioners contend that since the subdivision plan of Lot No. 1253 was only approved on January 19, 1987, the appellate
court can not presume
that the aliquot part of LORETO was the parcel designated as Lot 1253-B.[27]
Petitioners err. The mere fact that LORETO sold a definite portion of the co-owned lot by metes and bounds before partition
does not, per se, render the sale a nullity. We held inLopez v. Vda. De Cuaycong[28] that the fact that an agreement purported
to sell a concrete portion of a co-owned property does not render the sale void, for it is well-established that the binding force
of a contract must be recognized as far as it is legally possible to do so.[29]

In the case at bar, the contract of sale between LORETO and GABINO, JR. on May 12, 1986 could be legally recognized. At the
time of sale, LORETO had an aliquot share of one-third of the 4,280-square meter property or some 1,426 [30] square meters
but sold some 1,604 square meters to GABINO, JR. We have ruled that if a co-owner sells more than his aliquot share in the
property, the sale will affect only his share but not those of the other co-owners who did not consent to the sale.[31] Be that as
it may, the co-heirs of LORETO waived all their rights and interests over Lot No. 1253 in favor of LORETO in an Extrajudicial
Settlement of Estate dated January 20, 1987. They declared that they have previously received their respective shares from
the other estate of their parents ZOILO and PURIFICACION.[32] The rights of GABINO, JR. as owner over Lot No. 1253-B are thus
preserved. These rights were not effectively transferred by LORETO to WILFREDO in the Deed of Absolute Sale of Portion of
Land. Nor were these rights alienated from GABINO, JR. upon the issuance of the title to the subject property in the name of
WILFREDO. Registration of property is not a means of acquiring ownership. [33] Its alleged incontrovertibility cannot be
successfully invoked by WILFREDO because certificates of title cannot be used to protect a usurper from the true owner or be
used as a shield for the commission of fraud.[34]

IV
On the issue of prescription, petitioners contend that the appellate court failed to apply the rule that an action for
reconveyance based on fraud prescribes after the lapse of four years. [35] They cite Article 1391[36] of the Civil Code and the
case of Gerona v. De Guzman.[37]

We disagree. This Court explained in Salvatierra v. Court of Appeals,[38] viz.:

An action for reconveyance based on an implied or constructive trust must perforce prescribe in ten years
and not otherwise. A long line of decisions of this Court, and of very recent vintage at that, illustrates this
rule. Undoubtedly, it is now well-settled that an action for reconveyance based on an implied or constructive
trust prescribes in ten years from the issuance of the Torrenstitle over the property. The only discordant
note, it seems, is Balbin v. Medalla, which states that the prescriptive period for a reconveyance action is
four years. However, this variance can be explained by the erroneous reliance on Gerona v. de Guzman.
But in Gerona, the fraud was discovered on June 25, 1948, hence Section 43(3) of Act No. 190 was applied,

the New Civil Code not coming into effect until August 30, 1950 xxx. It must be stressed, at this juncture,
that Article 1144 and Article 1456 are new provisions. They have no counterparts in the old Civil Code or in
the old Code of Civil Procedure, the latter being then resorted to as legal basis of the four-year prescriptive
period for an action for reconveyance of title of real property acquired under false pretenses.[39]
[Thus,] under the present Civil Code, xxx just as an implied or constructive trust is an offspring of xxx Art.
1456, xxx so is the corresponding obligation to reconvey the property and the title thereto in favor of the true
owner. In this context, and vis--vis prescription, Article 1144 of the Civil Code is applicable[, viz.:]
Art. 1144. The following actions must be brought within ten years from the time the right of action accrues:
1) Upon a written contract;
2) Upon an obligation created by law;
3) Upon a judgment.[40] (emphases supplied)

Thus, in the case at bar, although the TCT of WILFREDO became indefeasible after the lapse of one year from the date
of registration, the attendance of fraud in its issuance created an implied trust in favor of GABINO, JR. under Article 1456 [41] of
the Civil Code. Being an implied trust, the action for reconveyance of the subject property therefore prescribes within a period
of ten years from February 15, 1990. Thus, when respondents filed the instant case with the court a quo on September 26,
1995, it was well within the prescriptive period.

V
On the issue of damages, petitioners contend that the grant is erroneous and the alleged connivance between Atty. Cardenal
and WILFREDO lacks basis.

We disagree. The evidence on record is clear that petitioners committed bad faith in the execution of the purported Deed of
Absolute Sale of Portion of Land dated December 7, 1989 between LORETO and WILFREDO. As stated by the appellate
court, viz.:
xxxx From the series of events, it can be reasonably inferred that appellees WILFREDO, LORETO and Atty.
Cardenal connived in attempting to deprive appellants of Lot No. 1253-B, hence, the appellants entitlement
to moral damages. Further, it is a well-settled rule that attorneys fees are allowed to be awarded if the
claimant is compelled to litigate with third persons or to incur expenses to protect his interest by reason of
an unjustified act or omission of the party for whom it is sought. xxxx To protect themselves, the appellants
engaged the services of counsel and incurred expenses in the course of litigation. Hence, we deem it
equitable to award attorneys fees to the appellant xxx.[42]
IN VIEW WHEREOF, the petition is DENIED. The assailed Decision and Resolution of the Court of Appeals in CA-G.R. No. CV68318 dated March 19, 2003 and November 13, 2003, respectively, are AFFIRMED in toto. Costs against petitioners.

SO ORDERED.

G.R. No. 144057

January 17, 2005
REPUBLIC OF THE PHILIPPINES, petitioner,
vs.
THE HONORABLE COURT OF APPEALS and CORAZON NAGUIT, respondents.
DECISION
TINGA, J.:
This is a Petition for Review on Certiorari under Rule 45 of the 1997 Rules of Civil Procedure, seeking to review the Decision1
of the Sixth Division of the Court of Appeals dated July 12, 2000 in CA-G.R. SP No. 51921. The appellate court affirmed the

decisions of both the Regional Trial Court (RTC),2 Branch 8, of Kalibo, Aklan dated February 26, 1999, and the 7th Municipal
Circuit Trial Court (MCTC)3 of Ibajay-Nabas, Aklan dated February 18, 1998, which granted the application for registration of a
parcel of land of Corazon Naguit (Naguit), the respondent herein.
The facts are as follows:
On January 5, 1993, Naguit, a Filipino citizen, of legal age and married to Manolito S. Naguit, filed with the MCTC of IbajayNabas, Aklan, a petition for registration of title of a parcel of land situated in Brgy. Union, Nabas, Aklan. The parcel of land is
designated as Lot No. 10049, Cad. 758-D, Nabas Cadastre, AP 060414-014779, and contains an area of 31,374 square
meters. The application seeks judicial confirmation of respondents imperfect title over the aforesaid land.
On February 20, 1995, the court held initial hearing on the application. The public prosecutor, appearing for the government,
and Jose Angeles, representing the heirs of Rustico Angeles, opposed the petition. On a later date, however, the heirs of
Rustico Angeles filed a formal opposition to the petition. Also on February 20, 1995, the court issued an order of general
default against the whole world except as to the heirs of Rustico Angeles and the government.
The evidence on record reveals that the subject parcel of land was originally declared for taxation purposes in the name of
Ramon Urbano (Urbano) in 1945 under Tax Declaration No. 3888 until 1991.4 On July 9, 1992, Urbano executed a Deed of
Quitclaim in favor of the heirs of Honorato Maming (Maming), wherein he renounced all his rights to the subject property and
confirmed the sale made by his father to Maming sometime in 1955 or 1956.5 Subsequently, the heirs of Maming executed a
deed of absolute sale in favor of respondent Naguit who thereupon started occupying the same. She constituted Manuel
Blanco, Jr. as her attorney-in-fact and administrator. The administrator introduced improvements, planted trees, such as
mahogany, coconut and gemelina trees in addition to existing coconut trees which were then 50 to 60 years old, and paid the
corresponding taxes due on the subject land. At present, there are parcels of land surrounding the subject land which have
been issued titles by virtue of judicial decrees. Naguit and her predecessors-in-interest have occupied the land openly and in
the concept of owner without any objection from any private person or even the government until she filed her application
for registration.
After the presentation of evidence for Naguit, the public prosecutor manifested that the government did not intend to
present any evidence while oppositor Jose Angeles, as representative of the heirs of Rustico Angeles, failed to appear during
the trial despite notice. On September 27, 1997, the MCTC rendered a decision ordering that the subject parcel be brought
under the operation of the Property Registration Decree or Presidential Decree (P.D.) No. 1529 and that the title thereto
registered and confirmed in the name of Naguit.6
The Republic of the Philippines (Republic), thru the Office of the Solicitor General (OSG), filed a motion for reconsideration.
The OSG stressed that the land applied for was declared alienable and disposable only on October 15, 1980, per the
certification from Regional Executive Director Raoul T. Geollegue of the Department of Environment and Natural Resources,
Region VI.7 However, the court denied the motion for reconsideration in an order dated February 18, 1998.81awphi1.nt
Thereafter, the Republic appealed the decision and the order of the MCTC to the RTC, Kalibo, Aklan, Branch 8. On February 26,
1999, the RTC rendered its decision, dismissing the appeal.9
Undaunted, the Republic elevated the case to the Court of Appeals via Rule 42 of the 1997 Rules of Civil Procedure. On July 12,
2000, the appellate court rendered a decision dismissing the petition filed by the Republic and affirmed in toto the assailed
decision of the RTC.
Hence, the present petition for review raising a pure question of law was filed by the Republic on September 4, 2000.10
The OSG assails the decision of the Court of Appeals contending that the appellate court gravely erred in holding that there is
no need for the governments prior release of the subject lot from the public domain before it can be considered alienable or
disposable within the meaning of P.D. No. 1529, and that Naguit had been in possession of Lot No. 10049 in the concept of
owner for the required period.11
Hence, the central question for resolution is whether is necessary under Section 14(1) of the Property Registration Decree that
the subject land be first classified as alienable and disposable before the applicants possession under a bona fide claim of
ownership could even start.
The OSG invokes our holding in Director of Lands v. Intermediate Appellate Court12 in arguing that the property which is in
open, continuous and exclusive possession must first be alienable. Since the subject land was declared alienable only on
October 15, 1980, Naguit could not have maintained a bona fide claim of ownership since June 12, 1945, as required by
Section 14 of the Property Registration Decree, since prior to 1980, the land was not alienable or disposable, the OSG argues.
Section 14 of the Property Registration Decree, governing original registration proceedings, bears close examination. It
expressly provides:
SECTION 14. Who may apply. The following persons may file in the proper Court of First Instance an application for
registration of title to land, whether personally or through their duly authorized representatives:
(1) those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive and notorious
possession and occupation of alienable and disposable lands of the public domain under a bona fide claim of ownership since
June 12, 1945, or earlier.
(2) Those who have acquired ownership over private lands by prescription under the provisions of existing laws.
....
There are three obvious requisites for the filing of an application for registration of title under Section 14(1) that the
property in question is alienable and disposable land of the public domain; that the applicants by themselves or through their

predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation, and; that such
possession is under a bona fide claim of ownership since June 12, 1945 or earlier.
Petitioner suggests an interpretation that the alienable and disposable character of the land should have already been
established since June 12, 1945 or earlier. This is not borne out by the plain meaning of Section 14(1). "Since June 12, 1945,"
as used in the provision, qualifies its antecedent phrase "under a bonafide claim of ownership." Generally speaking, qualifying
words restrict or modify only the words or phrases to which they are immediately associated, and not those distantly or
remotely located.13 Ad proximum antecedents fiat relation nisi impediatur sentencia.
Besides, we are mindful of the absurdity that would result if we adopt petitioners position. Absent a legislative amendment,
the rule would be, adopting the OSGs view, that all lands of the public domain which were not declared alienable or
disposable before June 12, 1945 would not be susceptible to original registration, no matter the length of unchallenged
possession by the occupant. Such interpretation renders paragraph (1) of Section 14 virtually inoperative and even precludes
the government from giving it effect even as it decides to reclassify public agricultural lands as alienable and disposable. The
unreasonableness of the situation would even be aggravated considering that before June 12, 1945, the Philippines was not
yet even considered an independent state.
Instead, the more reasonable interpretation of Section 14(1) is that it merely requires the property sought to be registered as
already alienable and disposable at the time the application for registration of title is filed. If the State, at the time the
application is made, has not yet deemed it proper to release the property for alienation or disposition, the presumption is that
the government is still reserving the right to utilize the property; hence, the need to preserve its ownership in the State
irrespective of the length of adverse possession even if in good faith. However, if the property has already been classified as
alienable and disposable, as it is in this case, then there is already an intention on the part of the State to abdicate its exclusive
prerogative over the property.
This reading aligns conformably with our holding in Republic v. Court of Appeals .14 Therein, the Court noted that "to prove
that the land subject of an application for registration is alienable, an applicant must establish the existence of a positive act
of the government such as a presidential proclamation or an executive order; an administrative action; investigation reports of
Bureau of Lands investigators; and a legislative act or a statute."15 In that case, the subject land had been certified by the
DENR as alienable and disposable in 1980, thus the Court concluded that the alienable status of the land, compounded by the
established fact that therein respondents had occupied the land even before 1927, sufficed to allow the application for
registration of the said property. In the case at bar, even the petitioner admits that the subject property was released and
certified as within alienable and disposable zone in 1980 by the DENR.16
This case is distinguishable from Bracewell v. Court of Appeals,17 wherein the Court noted that while the claimant had been in
possession since 1908, it was only in 1972 that the lands in question were classified as alienable and disposable. Thus, the bid
at registration therein did not succeed. In Bracewell, the claimant had filed his application in 1963, or nine (9) years before the
property was declared alienable and disposable.1awphi1.nt Thus, in this case, where the application was made years after
the property had been certified as alienable and disposable, the Bracewell ruling does not apply.
A different rule obtains for forest lands,18 such as those which form part of a reservation for provincial park purposes19 the
possession of which cannot ripen into ownership.20 It is elementary in the law governing natural resources that forest land
cannot be owned by private persons. As held in Palomo v. Court of Appeals,21 forest land is not registrable and possession
thereof, no matter how lengthy, cannot convert it into private property, unless such lands are reclassified and considered
disposable and alienable.22 In the case at bar, the property in question was undisputedly classified as disposable and
alienable; hence, the ruling in Palomo is inapplicable, as correctly held by the Court of Appeals.23
It must be noted that the present case was decided by the lower courts on the basis of Section 14(1) of the Property
Registration Decree, which pertains to original registration through ordinary registration proceedings. The right to file the
application for registration derives from a bona fide claim of ownership going back to June 12, 1945 or earlier, by reason of
the claimants open, continuous, exclusive and notorious possession of alienable and disposable lands of the public domain.
A similar right is given under Section 48(b) of the Public Land Act, which reads:
Sec. 48. The following described citizens of the Philippines, occupying lands of the public domain or claiming to own any such
land or an interest therein, but those titles have not been perfected or completed, may apply to the Court of First Instance of
the province where the land is located for confirmation of their claims and the issuance of a certificate of title therefor, under
the Land Registration Act, to wit:
xxx xxx xxx
(b) Those who by themselves or through their predecessors in interest have been in open, continuous, exclusive, and
notorious possession and occupation of agricultural lands of the public domain, under a bona fide claim of acquisition of
ownership, for at least thirty years immediately preceding the filing of the application for confirmation of title except when
prevented by war or force majeure. These shall be conclusively presumed to have performed all the conditions essential to a
Government grant and shall be entitled to a certificate of title under the provisions of this chapter.
When the Public Land Act was first promulgated in 1936, the period of possession deemed necessary to vest the right to
register their title to agricultural lands of the public domain commenced from July 26, 1894. However, this period was
amended by R.A. No. 1942, which provided that the bona fide claim of ownership must have been for at least thirty (30) years.
Then in 1977, Section 48(b) of the Public Land Act was again amended, this time by P.D. No. 1073, which pegged the reckoning
date at June 12, 1945. This new starting point is concordant with Section 14(1) of the Property Registration Decree.

Indeed, there are no material differences between Section 14(1) of the Property Registration Decree and Section 48(b) of the
Public Land Act, as amended. True, the Public Land Act does refer to "agricultural lands of the public domain," while the
Property Registration Decree uses the term "alienable and disposable lands of the public domain." It must be noted though
that the Constitution declares that "alienable lands of the public domain shall be limited to agricultural lands."24 Clearly, the
subject lands under Section 48(b) of the Public Land Act and Section 14(1) of the Property Registration Decree are of the same
type.
Did the enactment of the Property Registration Decree and the amendatory P.D. No. 1073 preclude the application for
registration of alienable lands of the public domain, possession over which commenced only after June 12, 1945? It did not,
considering Section 14(2) of the Property Registration Decree, which governs and authorizes the application of "those who
have acquired ownership of private lands by prescription under the provisions of existing laws."
Prescription is one of the modes of acquiring ownership under the Civil Code.25 There is a consistent jurisprudential rule that
properties classified as alienable public land may be converted into private property by reason of open, continuous and
exclusive possession of at least thirty (30) years.26 With such conversion, such property may now fall within the
contemplation of "private lands" under Section 14(2), and thus susceptible to registration by those who have acquired
ownership through prescription. Thus, even if possession of the alienable public land commenced on a date later than June
12, 1945, and such possession being been open, continuous and exclusive, then the possessor may have the right to register
the land by virtue of Section 14(2) of the Property Registration Decree.
The land in question was found to be cocal in nature, it having been planted with coconut trees now over fifty years old.27
The inherent nature of the land but confirms its certification in 1980 as alienable, hence agricultural. There is no impediment
to the application of Section 14(1) of the Property Registration Decree, as correctly accomplished by the lower
courts.l^vvphi1.net
The OSG posits that the Court of Appeals erred in holding that Naguit had been in possession in the concept of owner for the
required period. The argument begs the question. It is again hinged on the assertionshown earlier to be unfoundedthat
there could have been no bona fide claim of ownership prior to 1980, when the subject land was declared alienable or
disposable.
We find no reason to disturb the conclusion of both the RTC and the Court of Appeals that Naguit had the right to apply for
registration owing to the continuous possession by her and her predecessors-in-interest of the land since 1945. The basis of
such conclusion is primarily factual, and the Court generally respects the factual findings made by lower courts. Notably,
possession since 1945 was established through proof of the existence of 50 to 60-year old trees at the time Naguit purchased
the property as well as tax declarations executed by Urbano in 1945. Although tax declarations and realty tax payment of
property are not conclusive evidence of ownership, nevertheless, they are good indicia of the possession in the concept of
owner for no one in his right mind would be paying taxes for a property that is not in his actual or at least constructive
possession. They constitute at least proof that the holder has a claim of title over the property. The voluntary declaration of a
piece of property for taxation purposes manifests not only ones sincere and honest desire to obtain title to the property and
announces his adverse claim against the State and all other interested parties, but also the intention to contribute needed
revenues to the Government. Such an act strengthens ones bona fide claim of acquisition of ownership.28
Considering that the possession of the subject parcel of land by the respondent can be traced back to that of her
predecessors-in-interest which commenced since 1945 or for almost fifty (50) years, it is indeed beyond any cloud of doubt
that she has acquired title thereto which may be properly brought under the operation of the Torrens system. That she has
been in possession of the land in the concept of an owner, open, continuous, peaceful and without any opposition from any
private person and the government itself makes her right thereto undoubtedly settled and deserving of protection under the
law.
WHEREFORE, foregoing premises considered, the assailed Decision of the Court of Appeals dated July 12, 2000 is hereby
AFFIRMED. No costs.
SO ORDERED.
G.R. No. L-8936

October 2, 1915

CONSUELO LEGARDA, with her husband MAURO PRIETO, plaintiffs-appellants,

vs.
N.M. SALEEBY, defendant-appellee.
Singson, Ledesma and Lim for appellants.
D.R. Williams for appellee.

JOHNSON, J.:
From the record the following facts appear:

First. That the plaintiffs and the defendant occupy, as owners, adjoining lots in the district of Ermita in the city of Manila.
Second. That there exists and has existed a number of years a stone wall between the said lots. Said wall is located on the lot
of the plaintiffs.
Third. That the plaintiffs, on the 2d day of March, 1906, presented a petition in the Court of Land Registration for the
registration of their lot. After a consideration of said petition the court, on the 25th day of October, 1906, decreed that the
title of the plaintiffs should be registered and issued to them the original certificate provided for under the torrens system.
Said registration and certificate included the wall.
Fourth. Later the predecessor of the defendant presented a petition in the Court of Land Registration for the registration of
the lot now occupied by him. On the 25th day of March, 1912, the court decreed the registration of said title and issued the
original certificate provided for under the torrens system. The description of the lot given in the petition of the defendant also
included said wall.
Fifth. Several months later (the 13th day of December, 1912) the plaintiffs discovered that the wall which had been included in
the certificate granted to them had also been included in the certificate granted to the defendant .They immediately
presented a petition in the Court of Land Registration for an adjustment and correction of the error committed by including
said wall in the registered title of each of said parties. The lower court however, without notice to the defendant, denied said
petition upon the theory that, during the pendency of the petition for the registration of the defendant's land, they failed to
make any objection to the registration of said lot, including the wall, in the name of the defendant.
Sixth. That the land occupied by t he wall is registered in the name of each of the owners of the adjoining lots. The wall is not a
joint wall.
Under these facts, who is the owner of the wall and the land occupied by it?
The decision of the lower court is based upon the theory that the action for the registration of the lot of the defendant was a
judicial proceeding and that the judgment or decree was binding upon all parties who did not appear and oppose it. In other
words, by reason of the fact that the plaintiffs had not opposed the registration of that part of the lot on which the wall was
situate they had lost it, even though it had been theretofore registered in their name. Granting that theory to be correct one,
and granting even that the wall and the land occupied by it, in fact, belonged to the defendant and his predecessors, then the
same theory should be applied to the defendant himself. Applying that theory to him, he had already lost whatever right he
had therein, by permitting the plaintiffs to have the same registered in their name, more than six years before. Having thus
lost hid right, may he be permitted to regain it by simply including it in a petition for registration? The plaintiffs having secured
the registration of their lot, including the wall, were they obliged to constantly be on the alert and to watch all the
proceedings in the land court to see that some one else was not having all, or a portion of the same, registered? If that
question is to be answered in the affirmative, then the whole scheme and purpose of the torrens system of land registration
must fail. The real purpose of that system is to quiet title to land; to put a stop forever to any question of the legality of the
title, except claims which were noted at the time of registration, in the certificate, or which may arise subsequent thereto.
That being the purpose of the law, it would seem that once a title is registered the owner may rest secure, without the
necessity of waiting in the portals of the court, or sitting in the "mirador de su casa," to avoid the possibility of losing his land.
Of course, it can not be denied that the proceeding for the registration of land under the torrens system is judicial (Escueta vs.
.Director of Lands, 16 Phil. Rep., 482). It is clothed with all the forms of an action and the result is final and binding upon all
the world. It is an action in rem. (Escueta vs. Director of Lands (supra); Grey Alba vs. De la Cruz, 17 Phil. rep., 49 Roxas vs.
Enriquez, 29 Phil. Rep., 31; Tyler vs. Judges, 175 Mass., 51 American Land Co. vs. Zeiss, 219 U.S., 47.)
While the proceeding is judicial, it involves more in its consequences than does an ordinary action. All the world are parties,
including the government. After the registration is complete and final and there exists no fraud, there are no innocent third
parties who may claim an interest. The rights of all the world are foreclosed by the decree of registration. The government
itself assumes the burden of giving notice to all parties. To permit persons who are parties in the registration proceeding (and
they are all the world) to again litigate the same questions, and to again cast doubt upon the validity of the registered title,
would destroy the very purpose and intent of the law. The registration, under the torrens system, does not give the owner any
better title than he had. If he does not already have a perfect title, he can not have it registered. Fee simple titles only may be
registered. The certificate of registration accumulates in open document a precise and correct statement of the exact status of
the fee held by its owner. The certificate, in the absence of fraud, is the evidence of title and shows exactly the real interest of
its owner. The title once registered, with very few exceptions, should not thereafter be impugned, altered, changed, modified,
enlarged, or diminished, except in some direct proceeding permitted by law. Otherwise all security in registered titles would
be lost. A registered title can not be altered, modified, enlarged, or diminished in a collateral proceeding and not even by a
direct proceeding, after the lapse of the period prescribed by law.

For the difficulty involved in the present case the Act (No. 496) providing for the registration of titles under the torrens system
affords us no remedy. There is no provision in said Act giving the parties relief under conditions like the present. There is
nothing in the Act which indicates who should be the owner of land which has been registered in the name of two different
persons.
The rule, we think, is well settled that the decree ordering the registration of a particular parcel of land is a bar to future
litigation over the same between the same parties .In view of the fact that all the world are parties, it must follow that future
litigation over the title is forever barred; there can be no persons who are not parties to the action. This, we think, is the rule,
except as to rights which are noted in the certificate or which arise subsequently, and with certain other exceptions which
need not be dismissed at present. A title once registered can not be defeated, even by an adverse, open, and notorious
possession. Registered title under the torrens system can not be defeated by prescription (section 46, Act No. 496). The title,
once registered, is notice to the world. All persons must take notice. No one can plead ignorance of the registration.
The question, who is the owner of land registered in the name of two different persons, has been presented to the courts in
other jurisdictions. In some jurisdictions, where the "torrens" system has been adopted, the difficulty has been settled by
express statutory provision. In others it has been settled by the courts. Hogg, in his excellent discussion of the "Australian
Torrens System," at page 823, says: "The general rule is that in the case of two certificates of title, purporting to include the
same land, the earlier in date prevails, whether the land comprised in the latter certificate be wholly, or only in part,
comprised in the earlier certificate. (Oelkers vs. Merry, 2 Q.S.C.R., 193; Miller vs. Davy, 7 N.Z.R., 155; Lloyd vs. Myfield, 7 A.L.T.
(V.) 48; Stevens vs. Williams, 12 V.L. R., 152; Register of Titles, vs. Esperance Land Co., 1 W.A.R., 118.)" Hogg adds however
that, "if it can be very clearly ascertained by the ordinary rules of construction relating to written documents, that the
inclusion of the land in the certificate of title of prior date is a mistake, the mistake may be rectified by holding the latter of
the two certificates of title to be conclusive." (See Hogg on the "Australian torrens System," supra, and cases cited. See also
the excellent work of Niblack in his "Analysis of the Torrens System," page 99.) Niblack, in discussing the general question,
said: "Where two certificates purport to include the same land the earlier in date prevails. ... In successive registrations, where
more than one certificate is issued in respect of a particular estate or interest in land, the person claiming under the prior
certificates is entitled to the estate or interest; and that person is deemed to hold under the prior certificate who is the holder
of, or whose claim is derived directly or indirectly from the person who was the holder of the earliest certificate issued in
respect thereof. While the acts in this country do not expressly cover the case of the issue of two certificates for the same
land, they provide that a registered owner shall hold the title, and the effect of this undoubtedly is that where two certificates
purport to include the same registered land, the holder of the earlier one continues to hold the title" (p. 237).
Section 38 of Act No. 496, provides that; "It (the decree of registration) shall be conclusive upon and against all persons,
including the Insular Government and all the branches thereof, whether mentioned by name in the application, notice, or
citation, or included in the general description "To all whom it may concern." Such decree shall not be opened by reason of
the absence, infancy, or other disability of any person affected thereby, nor by any proceeding in any court for reversing
judgments or decrees; subject, however, to the right of any person deprived of land or of any estate or interest therein by
decree of registration obtained by fraud to file in the Court of Land Registration a petition for review within one year after
entry of the decree (of registration), provided no innocent purchaser for value has acquired an interest.
It will be noted, from said section, that the "decree of registration" shall not be opened, for any reason, in any court, except
for fraud, and not even for fraud, after the lapse of one year. If then the decree of registration can not be opened for any
reason, except for fraud, in a direct proceeding for that purpose, may such decree be opened or set aside in a collateral
proceeding by including a portion of the land in a subsequent certificate or decree of registration? We do not believe the law
contemplated that a person could be deprived of his registered title in that way.
We have in this jurisdiction a general statutory provision which governs the right of the ownership of land when the same is
registered in the ordinary registry in the name of two persons. Article 1473 of the Civil Code provides, among other things,
that when one piece of real property had been sold to two different persons it shall belong to the person acquiring it, who
first inscribes it in the registry. This rule, of course, presupposes that each of the vendees or purchasers has acquired title to
the land. The real ownership in such a case depends upon priority of registration. While we do not now decide that the
general provisions of the Civil Code are applicable to the Land Registration Act, even though we see no objection thereto, yet
we think, in the absence of other express provisions, they should have a persuasive influence in adopting a rule for governing
the effect of a double registration under said Act. Adopting the rule which we believe to be more in consonance with the
purposes and the real intent of the torrens system, we are of the opinion and so decree that in case land has been registered
under the Land Registration Act in the name of two different persons, the earlier in date shall prevail.
In reaching the above conclusion, we have not overlooked the forceful argument of the appellee. He says, among other things;
"When Prieto et al. were served with notice of the application of Teus (the predecessor of the defendant) they became
defendants in a proceeding wherein he, Teus, was seeking to foreclose their right, and that of orders, to the parcel of land

described in his application. Through their failure to appear and contest his right thereto, and the subsequent entry of a
default judgment against them, they became irrevocably bound by the decree adjudicating such land to Teus. They had their
day in court and can not set up their own omission as ground for impugning the validity of a judgment duly entered by a court
of competent jurisdiction. To decide otherwise would be to hold that lands with torrens titles are above the law and beyond
the jurisdiction of the courts".
As was said above, the primary and fundamental purpose of the torrens system is to quiet title. If the holder of a certificate
cannot rest secure in this registered title then the purpose of the law is defeated. If those dealing with registered land cannot
rely upon the certificate, then nothing has been gained by the registration and the expense incurred thereby has been in vain.
If the holder may lose a strip of his registered land by the method adopted in the present case, he may lose it all. Suppose
within the six years which elapsed after the plaintiff had secured their title, they had mortgaged or sold their right, what
would be the position or right of the mortgagee or vendee? That mistakes are bound to occur cannot be denied, and
sometimes the damage done thereby is irreparable. It is the duty of the courts to adjust the rights of the parties under such
circumstances so as to minimize such damages, taking into consideration al of the conditions and the diligence of the
respective parties to avoid them. In the present case, the appellee was the first negligent (granting that he was the real
owner, and if he was not the real owner he can not complain) in not opposing the registration in the name of the appellants.
He was a party-defendant in an action for the registration of the lot in question, in the name of the appellants, in 1906.
"Through his failure to appear and to oppose such registration, and the subsequent entry of a default judgment against him,
he became irrevocably bound by the decree adjudicating such land to the appellants. He had his day in court and should not
be permitted to set up his own omissions as the ground for impugning the validity of a judgment duly entered by a court of
competent jurisdiction." Granting that he was the owner of the land upon which the wall is located, his failure to oppose the
registration of the same in the name of the appellants, in the absence of fraud, forever closes his mouth against impugning
the validity of that judgment. There is no more reason why the doctrine invoked by the appellee should be applied to the
appellants than to him.
We have decided, in case of double registration under the Land Registration Act, that the owner of the earliest certificate is
the owner of the land. That is the rule between original parties. May this rule be applied to successive vendees of the owners
of such certificates? Suppose that one or the other of the parties, before the error is discovered, transfers his original
certificate to an "innocent purchaser." The general rule is that the vendee of land has no greater right, title, or interest than
his vendor; that he acquires the right which his vendor had, only. Under that rule the vendee of the earlier certificate would
be the owner as against the vendee of the owner of the later certificate.
We find statutory provisions which, upon first reading, seem to cast some doubt upon the rule that the vendee acquires the
interest of the vendor only. Sections 38, 55, and 112 of Act No. 496 indicate that the vendee may acquire rights and be
protected against defenses which the vendor would not. Said sections speak of available rights in favor of third parties which
are cut off by virtue of the sale of the land to an "innocent purchaser." That is to say, persons who had had a right or interest
in land wrongfully included in an original certificate would be unable to enforce such rights against an "innocent purchaser,"
by virtue of the provisions of said sections. In the present case Teus had his land, including the wall, registered in his name. He
subsequently sold the same to the appellee. Is the appellee an "innocent purchaser," as that phrase is used in said sections?
May those who have been deprived of their land by reason of a mistake in the original certificate in favor of Teus be deprived
of their right to the same, by virtue of the sale by him to the appellee? Suppose the appellants had sold their lot, including the
wall, to an "innocent purchaser," would such purchaser be included in the phrase "innocent purchaser," as the same is used in
said sections? Under these examples there would be two innocent purchasers of the same land, is said sections are to be
applied .Which of the two innocent purchasers, if they are both to be regarded as innocent purchasers, should be protected
under the provisions of said sections? These questions indicate the difficulty with which we are met in giving meaning and
effect to the phrase "innocent purchaser," in said sections.
May the purchaser of land which has been included in a "second original certificate" ever be regarded as an "innocent
purchaser," as against the rights or interest of the owner of the first original certificate, his heirs, assigns, or vendee? The first
original certificate is recorded in the public registry. It is never issued until it is recorded. The record notice to all the world. All
persons are charged with the knowledge of what it contains. All persons dealing with the land so recorded, or any portion of
it, must be charged with notice of whatever it contains. The purchaser is charged with notice of every fact shown by the
record and is presumed to know every fact which the record discloses .This rule is so well established that it is scarcely
necessary to cite authorities in its support (Northwestern National Bank vs. Freeman, 171 U.S., 620, 629; Delvin on Real Estate,
sections 710, 710 [a]).
When a conveyance has been properly recorded such record is constructive notice of its contents and all interests, legal and
equitable, included therein. (Grandin vs. Anderson, 15 Ohio State, 286, 289; Orvis vs. Newell, 17 Conn., 97; Buchanan vs.
Intentional Bank, 78 Ill., 500; Youngs vs. Wilson, 27 N.Y., 351; McCabe vs. Grey, 20 Cal., 509; Montefiore vs. Browne, 7 House
of Lords Cases, 341.)

Under the rule of notice, it is presumed that the purchaser has examined every instrument of record affecting the title. Such
presumption is irrebutable. He is charged with notice of every fact shown by the record and is presumed to know every fact
which an examination of the record would have disclosed. This presumption cannot be overcome by proof of innocence or
good faith. Otherwise the very purpose and object of the law requiring a record would be destroyed. Such presumption
cannot be defeated by proof of want of knowledge of what the record contains any more than one may be permitted to show
that he was ignorant of the provisions of the law. The rule that all persons must take notice of the facts which the public
record contains is a rule of law. The rule must be absolute. Any variation would lead to endless confusion and useless
litigation.
While there is no statutory provision in force here requiring that original deeds of conveyance of real property be recorded,
yet there is a rule requiring mortgages to be recorded. (Arts. 1875 and 606 of the Civil Code.) The record of a mortgage is
indispensable to its validity. (Art .1875.) In the face of that statute would the courts allow a mortgage to be valid which had
not been recorded, upon the plea of ignorance of the statutory provision, when third parties were interested? May a
purchaser of land, subsequent to the recorded mortgage, plead ignorance of its existence, and by reason of such ignorance
have the land released from such lien? Could a purchaser of land, after the recorded mortgage, be relieved from the mortgage
lien by the plea that he was a bona fide purchaser? May there be a bona fide purchaser of said land, bona fide in the sense
that he had no knowledge of the existence of the mortgage? We believe the rule that all persons must take notice of what the
public record contains in just as obligatory upon all persons as the rule that all men must know the law; that no one can plead
ignorance of the law. The fact that all men know the law is contrary to the presumption. The conduct of men, at times, shows
clearly that they do not know the law. The rule, however, is mandatory and obligatory, notwithstanding. It would be just as
logical to allow the defense of ignorance of the existence and contents of a public record.
In view, therefore, of the foregoing rules of law, may the purchaser of land from the owner of the second original certificate
be an "innocent purchaser," when a part or all of such land had theretofore been registered in the name of another, not the
vendor? We are of the opinion that said sections 38, 55, and 112 should not be applied to such purchasers. We do not believe
that the phrase "innocent purchaser should be applied to such a purchaser. He cannot be regarded as an "innocent purchaser"
because of the facts contained in the record of the first original certificate. The rule should not be applied to the purchaser of
a parcel of land the vendor of which is not the owner of the original certificate, or his successors. He, in nonsense, can be an
"innocent purchaser" of the portion of the land included in another earlier original certificate. The rule of notice of what the
record contains precludes the idea of innocence. By reason of the prior registry there cannot be an innocent purchaser of land
included in a prior original certificate and in a name other than that of the vendor, or his successors. In order to minimize the
difficulties we think this is the safe rule to establish. We believe the phrase "innocent purchaser," used in said sections, should
be limited only to cases where unregistered land has been wrongfully included in a certificate under the torrens system. When
land is once brought under the torrens system, the record of the original certificate and all subsequent transfers thereof is
notice to all the world. That being the rule, could Teus even regarded as the holder in good fifth of that part of the land
included in his certificate of the appellants? We think not. Suppose, for example, that Teus had never had his lot registered
under the torrens system. Suppose he had sold his lot to the appellee and had included in his deed of transfer the very strip of
land now in question. Could his vendee be regarded as an "innocent purchaser" of said strip? Would his vendee be an
"innocent purchaser" of said strip? Certainly not. The record of the original certificate of the appellants precludes the
possibility. Has the appellee gained any right by reason of the registration of the strip of land in the name of his vendor?
Applying the rule of notice resulting from the record of the title of the appellants, the question must be answered in the
negative. We are of the opinion that these rules are more in harmony with the purpose of Act No. 496 than the rule
contended for by the appellee. We believe that the purchaser from the owner of the later certificate, and his successors,
should be required to resort to his vendor for damages, in case of a mistake like the present, rather than to molest the holder
of the first certificate who has been guilty of no negligence. The holder of the first original certificate and his successors should
be permitted to rest secure in their title, against one who had acquired rights in conflict therewith and who had full and
complete knowledge of their rights. The purchaser of land included in the second original certificate, by reason of the facts
contained in the public record and the knowledge with which he is charged and by reason of his negligence, should suffer the
loss, if any, resulting from such purchase, rather than he who has obtained the first certificate and who was innocent of any
act of negligence.
The foregoing decision does not solve, nor pretend to solve, all the difficulties resulting from double registration under the
torrens system and the subsequent transfer of the land. Neither do we now attempt to decide the effect of the former
registration in the ordinary registry upon the registration under the torrens system. We are inclined to the view, without
deciding it, that the record under the torrens system, supersede all other registries. If that view is correct then it will be
sufficient, in dealing with land registered and recorded alone. Once land is registered and recorded under the torrens system,
that record alone can be examined for the purpose of ascertaining the real status of the title to the land.
It would be seen to a just and equitable rule, when two persons have acquired equal rights in the same thing, to hold that the
one who acquired it first and who has complied with all the requirements of the law should be protected.
In view of our conclusions, above stated, the judgment of the lower court should be and is hereby revoked. The record is
hereby returned to the court now having and exercising the jurisdiction heretofore exercised by the land court, with direction

to make such orders and decrees in the premises as may correct the error heretofore made in including the land in the second
original certificate issued in favor of the predecessor of the appellee, as well as in all other duplicate certificates issued.
Without any findings as to costs, it is so ordered.
Land Titles and Deeds Purpose of the Torrens System of Registration)
Facts: A stone wall stands between the adjoining lot of Legarda and Saleeby. The said wall and the strip of land where it stands
is registered in the Torrens system under the name of Legarda in 1906. Six years after the decree of registration is released in
favor of Legarda, Saleeby applied for registration of his lot under the Torrens system in 1912, and the decree issued in favor of
the latter included the stone wall and the strip of land where it stands.
Issue: Who should be the owner of a land and its improvement which has been registered under the name of two persons?
Held: For the issue involved, The Land Registration Act (Act 496) affords no remedy. However, it can be construed that where
two certificates purports to include the same registered land, the holder of the earlier one continues to hold title and will
prevail.
The real purpose of the Torrens system of registration, is to quiet title to land; to put a stop forever to any question of the
legality of the title, except claims which were noted at the time of registration, in the certificate, or which may arise
subsequent thereto. That being the purpose of the law, once a title is registered the owner may rest secure, without the
necessity of waiting in the portals of the court, or sitting in the mirador de su casa, to avoid the possibility of losing his land.
The law guarantees the title of the registered owner once it has entered into the Torrens system.

Grey Alba vs Dela Cruz, 17 Phil 61; GR No. 5246, September 16, 1910
Posted by Pius Morados on November 27, 2011
(Land Titles and Deeds Registration under the Torrens system is a proceeding in rem)
Facts: Petitioner heirs sought the registration of two parcels of agricultural land and the court entered a decree directing the
registration in favor of the petitioners, as co-owners subject to the usufructuary rights if the widower of the petitioners sister.
Respondent tenant filed a motion for the revision of the case upon the ground that he is the absolute owner of the disputed
lands, having inherited them from his father, who had a state grant for the same.
Issue: WON modification of the decree as to exclude said land will prosper.

Held: No, the main principle of registration is to make registered titles indefeasible. Upon the presentation in court if an
application for the registration of the title to lands, the theory under the Torrens system is that all occupants, adjoining
owners, adverse claimants, and other interested persons are notified of the proceedings, and have a right to appear in
opposition to such application. In other words, the proceeding is against the world.
A proceeding is in rem when the object of the action is to bar indifferently all who might be minded to make an objection of
any sort against the right sought to be established, and if anyone in the world has a right to be heard on the strength of
alleging facts which, if true, show an inconsistent interest.
G.R. No. 5246
September 16, 1910
MANUELA GREY ALBA, ET AL., petitioners-appellants,
vs.
ANACLETO R. DE LA CRUZ, objector-appellee.
Ramon Salinas, for appellants.
Aniceto G. Reyes, for appellee.
TRENT, J.:
These petitioners, Manuela, Jose, Juan, and Francisco, surnamed Grey y Alba, are the only heirs of Doa Segunda Alba
Clemente and Honorato Grey, deceased. Remedios Grey y Alba, a sister of the petitioners, was married on the 21st day of
March, 1903, to Vicente Reyes and died on the 13th of July, 1905, without leaving any heirs except her husband. The four
petitioners, as coowners, sought to have registered the following-described property:

A parcel of land situated in the barrio of Talampas, municipality of Baliuag, Province of Bulacan, upon which are situated three
houses and one camarin of light material, having a superficial area of 52 hectares, 51 ares, and 22 centares; bounded on the
north by the highway (calzada) of Talampas and the lands of Rita Ruiz Mateo; on the east by the lands of the said Rita Ruiz
Mateo, Hermenegildo Prado, Policarpo de Jesus, and a stream called Sapang Buslut; on the south by the same stream and the
lands of the capellania; and on the west by the stream called Sapang Buslut, and the lands of Vicente de la Cruz, Jose Camacho
and Domingo Ruiz Mateo.
This parcel of agricultural land is used for the raising of rice and sugar cane and is assessed at $1,000 United States currency.
The petition, which was filed on the 18th of December, 1906, was accompanied by a plan and technical description of the
above-described parcel of land.
After hearing the proofs presented, the court entered, on the 12th of February, 1908, a decree in accordance with the
provisions of paragraph 6 of section 54 of Act No. 926, directing that the land described in the petitioner be registered in the
names of the four petitioners, as coowners, subject to the usufructuary right of Vicente Reyes, widower of Remedios Grey.
On the 16th of June, 1908, Anacleto Ratilla de la Cruz filed a motion in the Court of Land Registration asking for a revision of
the case, including the decision, upon the ground that he is the absolute owner of the two parcels of land which are described
in said motion, and which, according to his allegations, are included in the lands decreed to the petitioners. He alleged that
the decree of February 12, 1908, was obtained maliciously and fraudulently by the petitioners, thereby depriving him of said
two parcels of land. He further alleged that he was the absolute owner of the two parcels of land, having inherited them from
his father, Baldomero R. de la Cruz, who had a state grant for the same. He therefore asked, under the provisions of section 38
of the Land Registration Act (No. 496), a revision of the case, and that the said decree be modified so as to exclude the two
parcels of land described in said motion. The Land Court upon this motion reopened the case, and after hearing the additional
evidence presented by both parties, rendered, on the 23rd of November, 1908, its decision modifying the former decree by
excluding from the same the two parcels of land claimed by Anacleto Ratilla de la Cruz. From this decision and judgment the
petitioners appealed and now insist, first, that the trial court erred in reopening the case and modifying its decree dated the
12th of February, 1908, for the reason that said decree was not obtained by means of fraud; and, second, that the court erred
in holding that the two parcels of land described in the appellee's motion are not their property.
It was agreed by counsel that the two small parcels now in dispute forma part of the land described in the petition and were
included in the decree of February 12, 1908, and that the petitioners are the owners of the remainder of the land described in
the said decree.
The petitioners inherited this land from their parents, who acquired the same, including the two small parcels in question, by
purchase, as is evidenced by a public document dated the 26th of November, 1864, duly executed before Francisco Iriarte,
alcalde mayor and judge of the Court of First Instance of the Province of Bulacan.
Baldomero R. de la Cruz, father of the appellee, obtained in march, 1895, a state grant for several parcels of land, including
the two parcels in question. This grant was duly inscribed in the old register of property in Bulacan on the 6th of April of the
same year.
It is admitted that at the time the appellants presented their petition in this case the appellee was occupying the two parcels
of land now in question. It is also admitted that the name of the appellee does not appear in the said petition as an occupant
of the said two parcels. The petitioners insist that the appellee was occupying these parcels as their tenant and for this reason
they did not include his name in their petition, as an occupant, while the appellee contends that he was occupying the said
parcels as the absolute owner under the estate grant by inheritance.
The court below held that the failure on the part of the petitioners to include the name of the appellee in their petition, as an
occupant of these two parcels of land, was a violation of section 21 of Act No. 496, and that this constituted fraud within the
meaning of section 38 of said Land Registration Act. The trial court further held that the grant from the estate should prevail
over the public document of purchase of 1864.
The mother of the petitioners died on November 15, 1881; their father died prior to that time. Manuela, the oldest of the
petitioners, was about six years of age when their mother died. So these children were minors when the father of the appellee
obtained the estate grant.
On the 13th of June, 1882, Jose Grey, uncle and representative of the petitioners, who were then minors, rented the land
owned by the petitioners' deceased parents to one Irineo Jose for a period of three years. On the 23d of March, 1895, the said
Jose Grey, as the representative of the petitioners, rented the same land for a period of six years to Baldomero R. de la Cruz,
father of the appellee. This rental contract was duly executed in writing. This land was cultivated during these six years by

Baldomero R. de la Cruz and his children, one of whom is the appellee. On the 14th of December, 1905, Jose Grey, for himself
and the other petitioners, rented the same land to Estanislao R. de la Cruz for a period of two years. Estanislao de la Cruz on
entering into this rental contract with Jose Grey did so for himself and his brothers, one of whom is the appellee. While the
appellee admits that his father and brother entered into these rental contracts and did, in fact, cultivate the petitioners' land,
nevertheless he insists that the two small parcels in question were not included in these contracts. In the rental contract
between the uncle of the petitioners and he father of the appellee the land is not described. In the rental contract between
Jose Grey, one of the petitioners, and Estanislao R. de la Cruz, brother of the appellee, the two small parcels of land in
question are included, according to the description given therein. This was found to be true by the court below, but the said
court held that as this contract was made by Estanislao R. de la Cruz it was not binding upon Anacleto R. de la Cruz, the
appellee.
The two small parcels of land in question were purchased by the parents of the petitioners in 1864, as is evidenced by the
public document of purchase and sale of that year. The same two parcels of land are included in the state grant issued in favor
of Baldomero Ratilla de la Cruz in 1895. This grant was obtained after the death of the petitioners' parents and while they
were minors. So it is clear that the petitioners honestly believed that the appellee was occupying the said parcels as their
lessee at the time they presented their application for registration. They did not act in bad faith, nor with any fraudulent
intent, when they omitted to include in their application the name of the appellee as one of the occupants of the land. They
believed that it was not necessary nor required that they include in their application the names of their tenants. Under these
circumstances, did the court below commit an error in reopening this case in June, 1908, after its decree had been entered in
February of the same year?
The application for the registration is to be in writing, signed and sworn to by the applicant, or by some person duly
authorized in his behalf. It is to contain an accurate description of the land. It shall contain the name in full and the address of
the applicant, and also the names and addresses of all occupants of land and of all adjoining owners, if known; and, if not
known, it shall state what search has been made to find them. In the form of notice given by statute, which shall be sworn to,
the applicant is required to state and set forth clearly all mortgages or encumbrances affecting said land, if any, the rights and
interests, legal or equitable, in the possession, remainder, reversion, or expectancy of all persons, with their names in full,
together with their place of residence and post office addresses. Upon receipt of the application the clerk shall cause notice of
the filling to be published twice in the Official Gazette. This published notice shall be directed to all persons appearing to have
an interest in the land sought to be registered and to the adjoining owners, and also "to all whom it may concern." In addition
to the notice in the Official Gazette the Land Court shall, within seven days after said publication, cause a copy of the notice, in
Spanish, to be mailed by the clerk to every person named in the application whose address is known; to cause a duly attested
copy of the notice, in Spanish, to be posted in a conspicuous place on every parcel of land included in the application, and in a
conspicuous place on the chief municipal building of the town in which the land is situated. The court may also cause other or
further notice of the application to be given in such manner and to such persons as it may deem proper. The certificate of the
clerk that he has served the notice as directed by the court by publication or mailing shall be conclusive proof of such service.
Within the time allowed in the notices, if no person appears and answers, the court may at once, upon motion of the
applicant, no reason to the contrary appearing, order a general default. By the description in the published notice "to all
whom it may concern," and by express provisions of law "all the word are made parties defendant and shall be concluded by
the default an order." If the court, after hearing, finds that the applicant has title, as stated in his application, a decree or
registration shall be entered.
Every decree of registration shall bind the land and quiet title thereto, subject only to the exceptions stated in the following
section. It shall be conclusive upon and against all persons, including the Insular Government, and all the branches thereof,
whether mentioned by name in the application, notice, or citation, or included in the general description "to all whom it may
concern." Such decree shall not be opened by reason of the absence, infancy, or other disability of any person affected
thereby, nor by any proceedings in any court for reversing judgments or decrees; subject, however, to the right of any person
deprived of land or of any estate or interest therein by decree of registration obtained by fraud to file in the Court of Land
Registration a petition for review within one year. . . . (Sec. 38 of Act No. 496.)
The appellee is not included in any of the exceptions named in section 38 referred to above.
It will be seen that the applicant is required to mention not only the outstanding interest which he admits but also all claims of
interest, though denied by him. By express provision of law the world are made parties defendant by the description in the
notice "to all whom it may concern."
Although the appellee, occupying the two small parcels of land in question under the circumstances as we have set forth, was
not served with notice, he was made a party defendant by publication; and the entering of a decree on the 12th of February,
1908, must be held to be conclusive against all persons, including the appellee, whether his (appellee's) name is mentioned in
the application, notice, or citation.

The said decree of February 12, 1908, should not have been opened on account of the absence, infancy, or other disability of
any person affected thereby, and could have been opened only on the ground that the said decree had been obtained by
fraud. That decree was not obtained by fraud on the part of the applicants, inasmuch as they honestly believed that the
appellee was occupying these two small parcels of land as their tenant. One of the petitioner went upon the premises with the
surveyor when the original plan was made.
Proof of constructive fraud is not sufficient to authorize the Court of Land Registration to reopen a case and modify its decree.
Specific, intentional acts to deceive and deprive anther of his right, or in some manner injure him, must be alleged and
proved; that is, there must be actual or positive fraud as distinguished from constructive fraud.
The question as to the meaning of the word "fraud" in the Australian statutes has been frequently raised. Two distinctions
have been noted by the Australian courts; the first is the distinction between the meaning of the word "fraud" in the sections
relating to the conclusive effect of certificates of title, and its meaning in the sections relating to the protection of bona fide
purchasers from registered proprietors. The second is the distinction between "legal," "equitable," or "constructive" fraud,
and "actual" or "moral" fraud. In none of the groups of the sections of the Australian statutes relating to the conclusive effect
of certificates of title, and in which fraud is referred to, is there any express indication of the meaning of "fraud," with the sole
exception of that of the South Australian group. (Hogg on Australian Torrens System, p. 834.)
With regard to decisions on the sections relating to the conclusive effect of certificates of title, it has been held in some cases
that the "fraud" there mentioned means actual or moral fraud, not merely constructive or legal fraud. In other cases "fraud"
has been said to include constructive, legal, and every kind of fraud. In other cases, against, knowledge of other persons' right,
and the deliberate acquisition of registered title in the face of such knowledge, has been held to be "fraud" which rendered
voidable the certificates of title so obtained; and voluntary ignorance is, for this purpose, the same as knowledge. But in none
of these three classes of cases was there absent the element of intention to deprive another of just rights, which constitutes
the essential characteristics of actual as distinguished from legal-fraud. (Id., p. 835, and cases cited in notes Nos. 85, 86, 87,
88, and 89 at bottom of pages 835 and 836.)
By "fraud" is meant actual fraud-dishonesty of some sort. (Judgment of Privy Council in Assets Co. vs. Mere Roihi, and Assets
Co. vs. Panapa Waihopi, decided in March, 1905, cited by Hogg in his Supplementary Addendum to his work on Australian
Torrens System, supra.) The same meaning should be given to the word "fraud" used in section 38 of our statutes (Act No.
496).
The question as to whether any particular transaction shows fraud, within the meaning of the word as used in our statutes,
will in each case be a question of fact. We will not attempt to say what acts would constitutes this kind of fraud in other cases.
This must be determined from the fact an circumstances in each particular case. The only question we are called upon to
determine, and have determined, is whether or not, under the facts and circumstances in this case, the petitioners did obtain
the decree of February 12, 1908, by means of fraud.
It might be urged that the appellee has been deprived of his property without due process of law, in violation of section 5 of
the Act of Congress of July 1, 1902, known as the Philippine Bill," which provides "that no law shall be enacted in the said
Islands which shall deprive any person of life, liberty, or property without due process of law."
The Land Registration Act requires that all occupants be named in the petition and given notice by registered mail. This did not
do the appellee any good, as he was not notified; but he was made a party defendant, as we have said, by means of the
publication "to all whom it may concern." If this section of the Act is to be upheld this must be declared to be due process of
law.
Before examining the validity of this part of the Act it might be well to note the history and purpose of what is known as the
"Torrens Land Registration System." This system was introduced in South Australia by Sir Robert Torrens in 1857 and was
there worked out in its practicable form.
The main principle of registration is to make registered titles indefeasible. As we have said, upon the presentation in the Court
of Land Registration of an application for the registration of the title to lands, under this system, the theory of the law is that
all occupants, adjoining owners, adverse claimants, and other interested persons are notified of the proceedings, and have
have a right to appear in opposition to such application. In other words, the proceeding is against the whole word. This system
was evidently considered by the Legislature to be a public project when it passed Act No. 496. The interest of the community
at large was considered to be preferred to that of private individuals.
At the close of this nineteenth century, all civilized nations are coming to registration of title to land, because immovable
property is becoming more and more a matter of commercial dealing, and there can be no trade without security. (Dumas's
Lectures, p. 23.)

The registered proprietor will no longer have reasons to fear that he may evicted because his vendor had, unknown to him,
already sold the and to a third person. . . The registered proprietor may feel himself protected against any defect in his
vendor's title. (Id., p. 21.)
The following summary of benefits of the system of registration of titles, made by Sir Robert Torrens, has been fully justified in
its use:
First. It has substituted security for insecurity.
Second. It has reduced the costs of conveyances from pounds to shillings, and the time occupied from months to days.
Third. It has exchanged brevity and clearness for obscurity and verbiage.
Fourth. It has so simplified ordinary dealings that he who has mastered the "three R's" can transact his own conveyancing.
Fifth. It affords protection against fraud.
Sixth. It has restored to their just value many estates held under good holding titles, but depreciated in consequence of some
blur or technical defect, and has barred the reoccurrence of any similar faults. (Sheldon on Land Registration, pp. 75, 76.)
The boldest effort to grapple with the problem of simplification of title to land was made by Mr. (afterwards Sir Robert)
Torrens, a layman, in South Australia in 1857. . . . In the Torrens system title by registration takes the place of "title by deeds"
of the system under the "general" law. A sale of land, for example, is effected by a registered transfer, upon which a certificate
of title is issued. The certificate is guaranteed by statute, and, with certain exceptions, constitutes indefeasible title to the land
mentioned therein. Under the old system the same sale would be effected by a conveyance, depending for its validity, apart
from intrinsic flaws, on the correctness of a long series of prior deeds, wills, etc. . . . The object of the Torrens system, them, is
to do away with the delay, uncertainty, and expense of the old conveyancing system. (Duffy & Eagleson on The Transfer of
Land Act, 1890, pp. 2, 3, 5, 7.)
By "Torrens" system generally are meant those systems of registration of transactions with interest in land whose declared
object . . . is, under governmental authority, to establish and certify to the ownership of an absolute and indefeasible title to
realty, and to simplify its transfer. (Hogg on Australian Torrens system, supra, pp. 1, 2.)
Compensation for errors from assurance funds is provided in all countries in which the Torrens system has been enacted.
Cases of error no doubt will always occur. The percentage of errors, as compared with the number of registered dealings in
Australia, is very small. In New South Wales there were, in 1889, 209, 894 registered dealings, the average risk of error being
only 2 cents for each dealing. In Queensland the risk of error was only 1 cents, the number of registered dealings being
233,309. In Tasmania and in Western Australia not a cent was paid for compensation for errors during the whole time of
operation, (Dumas's Lectures, supra, p. 96.) This system has been adopted in various countries of the civilized world, including
some of the States of the American Union, and practical experience has demonstrated that it has been successful as a public
project.
The validity of some of the provisions of the statutes adopting the Torrens system has been the subject of judicial decision in
the courts of the United States. (People vs. Chase, 165 Ill., 527; State vs. Guilbert, 56 Ohio St., 575; People vs. Simon, 176 Ill.,
165; Tyler vs. Judges, 175 Mass., 71.)
Act No. 496 of the Philippine Commission, known as the "Land Registration Act," was copied substantially from the
Massachussetts law of 1898.
The Illinois and Massachusetts statutes were upheld by the supreme courts of those States.
It is not enough to show a procedure to be unconstitutional to say that we never heard of it before. (Tyler vs. Judges, supra;
Hurtado vs. California, 110 U. S., 516.)
Looked at either from the point of view of history or of the necessary requirements of justice, a proceeding in rem dealing
with a tangible res may be instituted and carried to judgment without personal service upon claimants within the State or
notice by name to those outside of it, and not encounter any provision of either constitution. Jurisdiction is secured by the
power of the court over the res. As we have said, such a proceeding would be impossible, were this not so, for it hardly would
do to make a distinction between the constitutional rights of claimants who were known and those who were not known to
the plaintiff, when the proceeding is to bar all. (Tyler vs. Judges, supra.)

This same doctrine is annunciated in Pennoyer vs. Neff (95 U. S., 714); The Mary (9 Cranch, 126); Mankin vs. Chandler (2
Brock., 125); Brown vs. Levee Commission (50 Miss., 468); 2 Freeman, Judgments, 4th ed., secs. 606, 611.
If the technical object of the suit is to establish a claim against some particular person, with a judgment which generally, in
theory at least, binds his body, or to bar some individual claim or objection, so that only certain persons are entitled to be
heard in defense, the action is in personam, although it may concern the right to or possession of a tangible thing. If, on the
other hand, the object is to bar indifferently all who might be minded to make an objection of any sort against the right
sought to be established, and if anyone in the world has a right to be heard on the strenght of alleging facts which, if true,
show an inconsistent interest, the proceeding is in rem. (Tyler vs. Judges, supra.)
In the case of Hamilton vs. Brown (161 U. S., 256) a judgment of escheat was held conclusive upon persons notified by
advertisement to all persons interested. In this jurisdiction, by the provisions of the Code of Civil Procedure, Act No. 190, a
decree allowing or disallowing a will binds everybody, although the only notice of the proceedings given is by general notice to
all persons interested.
The supreme court Massachusetts, in the case of Tyler vs. Judges (supra), did not rest its judgment as to the conclusive effect
of the decree upon the ground that the State has absolute power to determine the persons to whom a man's property shall go
at his death, but upon the characteristics of a proceeding in rem. So we conclude that the proceedings had in the case at bar,
under all the facts and circumstances, especially the absolute lack on the part of the petitioners of any dishonest intent to
deprive the appellee of any right, or in any way injure him, constitute due process of law.
As to whether or not the appellee can succesfully maintain an action under the provisions of sections 101 and 102 of the Land
Registration Act (secs. 2365, 2366, Compilation) we do not decide.
For these reasons we are of the opinion, and so hold, that the judgment appealed from should be, and the same is hereby
reversed and judgment entered in favor of the petitioners in conformity with the decree of the lower court of February 12,
1908, without special ruling as to costs. It is so ordered.
Arellano, C.J., Torres, Johnson and Moreland, JJ., concur.