Professional Documents
Culture Documents
* FIRST DIVISION.
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the Torrens system does not mean that ownership thereof can no
longer be disputed. Ownership is different from a certificate of
title. The TCT is only the best proof of ownership of a piece of
land. Besides, the certificate cannot always be considered as
conclusive evidence of ownership. Mere issuance of the
certificate of title in the name of any person does not
foreclose the possibility that the real property may be
under co-ownership with persons not named in the
certificate or that the registrant may only be a trustee or
that other parties may have acquired interest subsequent
to the issuance of the certificate of title. To repeat,
registration is not the equivalent of title, but is only the best
evidence thereof. Title as a concept of ownership should not
be confused with the certificate of title as evidence of such
ownership although both are interchangeably used.
Same; Same; Registration does not vest title, it is merely the
evidence of such title; Land registration laws do not give the holder
any better title than what he actually has.—Registration does not
vest title; it is merely the evidence of such title. Land registration
laws do not give the holder any better title than what he actually
has. Consequently, Dr. Rosario must still prove herein his
acquisition of title to Lot No. 356-A, apart from his submission of
TCT No. 52751 in his name.
Civil Law; Trusts; Trust is the right to the beneficial
enjoyment of property, the legal title to which is vested in another;
Trust relations between parties may either be express or implied.—
Trust is the right to the beneficial enjoyment of property, the legal
title to which is vested in another. It is a fiduciary relationship
that obliges the trustee to deal with the property for the benefit of
the beneficiary. Trust relations between parties may either be
express or implied. An express trust is created by the intention of
the trustor or of the parties, while an implied trust comes into
being by operation of law.
Same; Same; It is possible to create a trust without using the
word “trust” or “trustee”; The mere fact that these words are used
does not necessarily indicate an intention to create a trust.—Under
Article 1444 of the Civil Code, “[n]o particular words are required
for the creation of an express trust, it being sufficient that a trust
is clearly intended.” It is possible to create a trust without using
the word “trust” or “trustee.” Conversely, the mere fact that these
words are used does not necessarily indicate an intention to
create a trust. The question in each case is whether the trustor
manifested an intention to create the kind of relationship which
to lawyers is known as trust. It is immaterial whether or not he
knows that the relationship which he intends
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or should have been done earlier; Laches apply only in the absence
of a statutory prescriptive period.—Civil Case No. U-4359 is
likewise not barred by laches. Laches means the failure or
neglect, for an unreasonable and unexplained length of time, to do
that which by exercising due diligence could or should have been
done earlier. It is negligence or omission to assert a right within a
reasonable time, warranting a presumption that the party
entitled to assert it either has abandoned it or declined to assert
it. As the Court explained in the preceding paragraphs, the
Torbela siblings instituted Civil Case No. U-4359 five years after
Dr. Rosario’s repudiation of the express trust, still within the 10-
year prescriptive period for enforcement of such trusts. This does
not constitute an unreasonable delay in asserting one’s right. A
delay within the prescriptive period is sanctioned by law and is
not considered to be a delay that would bar relief. Laches apply
only in the absence of a statutory prescriptive period.
Same; Mortgages; Doctrine of “Mortgagee in Good Faith”;
Under this doctrine, even if the mortgagor is not the owner of the
mortgaged property, the mortgage contract and any foreclosure
sale arising therefrom are given effect by reason of public policy;
Even if the mortgagor is not the rightful owner of, or does not have
a valid title to, the mortgaged property, the mortgagee in good
faith is, nonetheless, entitled to protection.—Under Article 2085 of
the Civil Code, one of the essential requisites of the contract of
mortgage is that the mortgagor should be the absolute owner of
the property to be mortgaged; otherwise, the mortgage is
considered null and void. However, an exception to this rule is the
doctrine of “mortgagee in good faith.” Under this doctrine, even if
the mortgagor is not the owner of the mortgaged property, the
mortgage contract and any foreclosure sale arising therefrom are
given effect by reason of public policy. This principle is based on
the rule that all persons dealing with property covered by a
Torrens Certificate of Title, as buyers or mortgagees, are not
required to go beyond what appears on the face of the title. This is
the same rule that underlies the principle of “innocent purchasers
for value.” The prevailing jurisprudence is that a mortgagee has a
right to rely in good faith on the certificate of title of the
mortgagor to the property given as security and in the absence of
any sign that might arouse suspicion, has no obligation to
undertake further investigation. Hence, even if the mortgagor is
not the rightful owner of, or does not have a valid title to, the
mortgaged property, the mortgagee in good faith is, nonetheless,
entitled to protection.
Same; Adverse Claim; Purpose of annotating the adverse
claim on the title of the disputed land; An adverse claim is a notice
to third persons that any transaction regarding the disputed land
is subject to the outcome of the dis-
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VOL. 661, DECEMBER 7, 2011 641
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1 Rollo (G.R. No. 140528), pp. 39-57; Rollo (G.R. No. 140553), pp. 16-34;
penned by Associate Justice Eugenio S. Labitoria with Associate Justices
Mariano M. Umali and Edgardo P. Cruz, concurring.
2 Id., at pp. 58-59; id., at pp. 35-36.
642
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3 Represented by her heirs: Eulogio Tosino, Claro Tosino, Maximino
Tosino, Cornelio Tosino, Olivia Tosino, Calixta Tosino, Apolonia Tosino
Vda. de Ramirez, and Julita Tosino Dean.
4 Represented by his heirs: Jose Torbela and Dionisio Torbela.
5 Represented by her heirs: Esteban Rosario, Manuel Rosario, and
Andrea Rosario-Haduca.
6 Represented by Sergio Torbela, Eutropia Velasco, Pilar Zulueta,
Candido Torbela, Florentina Torbela, and Pantaleon Torbela.
7 Represented by her heirs: Patricio Agustin, Segundo Agustin,
Consuelo Agustin, and Felix Agustin.
8 Records, Folder of Exhibits, pp. 1047-1050.
9 Id., at pp. 1051-1054.
10 Id., at pp. 1055-1056.
643
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11 Id., at p. 1055.
12 Id., at pp. 1057-1060.
13 Id., at p. 1061.
14 Id.
644
The very next day, on May 17, 1967, the Torbela siblings
had Cornelio’s Affidavit of Adverse Claim dated May 16,
1967 and Dr. Rosario’s Deed of Absolute Quitclaim dated
December 28, 1964 anno-
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15 Id., at p. 1058.
16 Id., at pp. 1062-1063.
17 Id.
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VOL. 661, DECEMBER 7, 2011 645
Torbela vs. Rasario
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18 Id., at pp. 1058, 1059-A.
19 Id.
20 Id., at p. 1059-A.
21 No copies of TCT Nos. 24832 and 104189 can be found in the case
records.
22 Records, Folder of Exhibits, p. 1059-A.
23 Id., at p. 1060.
646
646 SUPREME COURT REPORTS ANNOTATED
Torbela vs. Rasario
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24 Id.
25 Id.
26 Id.
647
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27 Id.
28 Records, pp. 489-492.
29 Id., at pp. 476-477.
30 Records, Folder of Exhibits, p. 1060.
31 Records, pp. 180-188. The Torbela siblings would eventually file a
Second Amended Complaint in Civil Case No. U-4359 on July 29, 1991
(id., at pp. 391-403).
648
648 SUPREME COURT REPORTS ANNOTATED
Torbela vs. Rasario
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32 Records, Folder of Exhibits, p. 1060A.
33 CA Rollo, p. 169.
34 Records, pp. 478-479.
35 Id., at p. 480.
36 Records, Folder of Exhibits, p. 1064.
649
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37 Records, pp. 536-547. The Torbela siblings would subsequently file an
Amended Complaint in Civil Case No. U-4733 on July 29, 1991.
38 CA Rollo, pp. 138-148; penned by Judge Modesto C. Juanson.
650
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39 Id., at p. 148.
40 Id., at pp. 149-150.
41 Id., at p. 149.
42 Id., at pp. 195-213; penned by Associate Justice Eugenio S. Labitoria with
Associate Justices Mariano M. Umali and Edgardo P. Cruz, concurring.
651
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43 Id., at p. 212.
44 Id., at pp. 253-254.
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45 Rollo (G.R. No. 140528), pp. 21-22, 31, and 33.
653
A
THE HON. COURT OF APPEALS PATENTLY ERRED IN NOT
FINDING THAT THE PERIOD TO REDEEM THE PROPERTY
HAS NOT COMMENCED, HENCE, THE CERTIFICATE OF
SALE, THE CONSOLIDATION OF OWNERSHIP BY [BANCO
FILIPINO], ARE NULL AND VOID.
B
THE COURT OF APPEALS PATENTLY ERRED IN REFUSING
TO RULE THAT THE FILING OF THE COMPLAINT BEFORE
THE COURT A QUO BY THE [TORBELA SIBLINGS] HAD
ALREADY BEEN PRESCRIBED.47
“Ordinarily, this Court will not review, much less reverse, the
factual findings of the Court of Appeals, especially where such
findings coincide with those of the trial court. The findings of facts
of the Court of Appeals are, as a
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46 Id., at p. 35.
47 Rollo (G.R. No. 140553), p. 10.
48 G.R. No. 169481, February 22, 2010, 613 SCRA 314.
654
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49 Id., at pp. 324-325.
50 This was repealed by Republic Act No. 7160, otherwise known as the
Local Government Code of 1991, which took effect on January 1, 1992.
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51 202 Phil. 943; 117 SCRA 613 (1982).
657
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52 Id., at pp. 947-948; pp. 616-617.
658
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53 354 Phil. 556; 292 SCRA 544 (1998).
659
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54 Id., at pp. 561-562; pp. 547-578.
55 Heirs of Rosa Dumaliang v. Serban, G.R. No. 155133, February 21,
2007, 516 SCRA 343, 357-358.
56 RULES OF COURT, Rule 130, Section 9.
57 Id.
660
660 SUPREME COURT REPORTS ANNOTATED
Torbela vs. Rasario
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58 TSN, September 25, 1991, p. 21.
59 Declaro v. Court of Appeals, 399 Phil. 616, 623; 346 SCRA 57, 63
(2000).
60 Spouses Gomez v. Duyan, 493 Phil. 819, 828; 453 SCRA 708, 718
(2005).
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Torbela vs. Rasario
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61 Heirs of Tranquilino Labiste v. Heirs of Jose Labiste, G.R. No.
162033, May 8, 2009, 587 SCRA 417, 425.
62 Id.
63 Heirs of Maximo Labanon v. Heirs of Constancio Labanon, G.R. No.
160711, August 14, 2007, 530 SCRA 97, 107.
64 150-B Phil. 31, 37-38; 46 SCRA 27, 31 (1972).
662
662 SUPREME COURT REPORTS ANNOTATED
Torbela vs. Rasario
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65 Supra note 63.
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Torbela vs. Rasario
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66 Id., at pp. 108-109.
67 Secuya v. De Selma, 383 Phil. 126, 137; 326 SCRA 244, 254 (2000).
68 Diaz v. Gorricho and Aguado, 103 Phil. 261, 266 (1958).
664
664 SUPREME COURT REPORTS ANNOTATED
Torbela vs. Rasario
“[P]rescription and laches will run only from the time the express
trust is repudiated. The Court has held that for acquisitive
prescription to bar the action of the beneficiary against the
trustee in an express trust for the recovery of the property held in
trust it must be shown that: (a) the trustee has performed
unequivocal acts of repudiation amounting to an ouster of the
cestui que trust; (b) such positive acts of repudiation have been
made known to the cestui que trust, and (c) the evidence thereon
is clear and conclusive. Respondents cannot rely on the fact
that the Torrens title was issued in the name of Epifanio
and the other heirs of Jose. It has been held that a trustee
who obtains a Torrens title over property held in trust by
him for another cannot repudiate the trust by relying on
the reg-
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69 G.R. No. 147863, August 13, 2004, 436 SCRA 484.
70 Id., at pp. 500-501.
71 Supra note 61.
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72 Id., at p. 426.
73 CA Rollo, p. 105.
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74 Section 52 of Presidential Decree No. 1529, otherwise known as the
Property Registration Decree, reads:
SEC. 52. Constructive notice upon registration.—Every conveyance,
mortgage, lease, lien, attachment, order, judgment, instrument or entry
affecting registered land shall, if registered, filed or entered in the office of
the Register of Deeds for the province or city where the land to which it
relates lies, be constructive notice to all persons from the time of such
registering, filing, or entering.
667
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75 De Castro v. Court of Appeals, 434 Phil. 53, 68; 384 SCRA 607, 619
(2002).
668
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76 Llanto v. Alzona, 490 Phil. 696, 703; 450 SCRA 288, 295 (2005).
669
ADVERSE CLAIM
“SEC. 110. Whoever claims any part or interest in registered
land adverse to the registered owner, arising subsequent to the
date of the original registration, may, if no other provision is
made in this Act for registering the same, make a statement in
writing setting forth fully his alleged right or interest, and how or
under whom acquired, and a reference to the volume and page of
the certificate of title of the registered owner, and a description of
the land in which the right or interest is claimed.
The statement shall be signed and sworn to, and shall state the
adverse claimant’s residence, and designate a place at which all
notices may be served upon him. This statement shall be entitled
to registration as an adverse claim, and the court, upon a petition
of any party in interest, shall grant a speedy hearing upon the
question of the validity of such adverse claim and shall enter such
decree therein as justice and equity may require. If the claim is
adjudged to be invalid, the registration shall be cancelled. If in
any case the court after notice and hearing shall find that a claim
thus registered was frivolous or vexatious, it may tax the adverse
claimant double or treble costs in its discretion.”
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77 Arrazola v. Bernas, 175 Phil. 452, 456-457; 86 SCRA 279, 284
(1978).
78 103 Phil. 858, 867 (1958).
670
671
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79 327 Phil. 689; 258 SCRA 79 (1996).
672
673
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80 Id., at pp. 708-712; pp. 95-98.
674
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81 Crisostomo v. Court of Appeals, 274 Phil. 1134, 1142-1143; 197
SCRA 833, 840 (1991).
82 Philippine Trust Company v. Court of Appeals, G.R. No. 150318,
November 22, 2010, 635 SCRA 518, 530.
83 Cruz v. Bancom Finance Corporation, 429 Phil. 225, 239; 379 SCRA
490, 505 (2002).
675
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84 Metropolitan Bank and Trust Co. v. Pascual, G.R. No. 163744,
February 29, 2008, 547 SCRA 246, 261.
676
security; and with the proceeds of the loan, Dr. Rosario had
a building constructed on Lot No. 356-A, initially used as a
hospital, and then later for other commercial purposes. Dr.
Rosario supervised the construction of the building, which
began in 1965; fully liquidated the loan from DBP; and
maintained and administered the building, as well as
collected the rental income therefrom, until the Torbela
siblings instituted Civil Case No. U-4359 before the RTC on
February 13, 1986.
When it comes to the improvements on Lot No. 356-A,
both the Torbela siblings (as landowners) and Dr. Rosario
(as builder) are deemed in bad faith. The Torbela siblings
were aware of the construction of a building by Dr. Rosario
on Lot No. 356-A, while Dr. Rosario proceeded with the
said construction despite his knowledge that Lot No. 356-A
belonged to the Torbela siblings. This is the case
contemplated under Article 453 of the Civil Code, which
reads:
“ART. 453. If there was bad faith, not only on the part of the
person who built, planted or sowed on the land of another, but
also on the part of the owner of such land, the rights of one and
the other shall be the same as though both had acted in
good faith.
It is understood that there is bad faith on the part of the
landowner whenever the act was done with his knowledge and
without opposition on his part.” (Emphasis supplied.)
677
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85 Bernardo v. Bataclan, 66 Phil. 598, 602 (1938).
678
“Article 546 does not specifically state how the value of the
useful improvements should be determined. The respondent court
and the private respondents espouse the belief that the cost of
construction of the apartment building in 1965, and not its
current market value, is sufficient reimbursement for necessary
and useful improvements made by the petitioner. This position is,
however, not in consonance with previous rulings of this Court in
similar cases. In Javier vs. Concepcion, Jr., this Court pegged the
value of the useful improvements consisting of various fruits,
bamboos, a house and camarin made of strong material based on
the market value of the said improvements. In Sarmiento vs.
Agana, despite the finding that the useful improvement, a
residential house, was built in 1967 at a cost of between eight
thousand pesos (P8,000.00) to ten thousand pesos (P10,000.00),
the landowner was ordered to reimburse the builder in the
amount of forty thousand pesos (P40,000.00), the value of the
house at the time of the trial. In the same way, the landowner
was required to pay the “present value” of the
_______________
86 Briones v. Spouses Macabagdal, G.R. No. 150666, August 3, 2010, 626 SCRA
300, 307-308.
87 314 Phil. 313; 244 SCRA 407 (1995).
679
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88 Id., at pp. 323-325; pp. 415-416.
89 Article 441(3) of the Civil Code provides that “To the owner belongs
x x x (t)he civil fruits.” Article 442 of the same Code describes “civil fruits”
as “the rents of buildings, the price of leases of lands and other property
and the amount of perpetual or life annuities or other similar income.”
90 Id.
680
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91 Metropolitan Bank and Trust Company v. Tan, G.R. No. 178449,
October 17, 2008, 569 SCRA 814, 831.
92 The year 1988 was a leap-year.
93 Ysmael v. Court of Appeals, 376 Phil. 323, 334; 318 SCRA 215, 226
(1999).
94 BPI Family Savings Bank Inc. v. Sps. Veloso, 479 Phil. 627, 634; 436
SCRA 1, 7 (2004).
683
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95 Banco Filipino Savings & Mortgage Bank v. Court of Appeals, 501
Phil. 372, 384; 463 SCRA 64, 75 (2005).
96 Sarrosa v. Dizon, G.R. No. 183027, July 26, 2010, 625 SCRA 556,
564-565.
684
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97 Fernandez v. Espinoza, G.R. No. 156421, April 14, 2008, 551 SCRA
136, 150.
685