[G.R. No. 39095. September 27, 1934.

A. A. ADDISON, Plaintiff-Appellant, v. THE PAYATAS ESTATE IMPROVEMENT CO.,ET AL., Defendants-Appellees.

J. W. Ferrier and Daniel M. Gomez for Appellant.

Benedicto M. Javier and Vicente Santiago for appellees the Payatas Estate Improvement Co., G. Cruz and J. Rodriguez.

No appearance for the other appellees.

SYLLABUS

1. LAND; REGISTERED OWNER CANNOT BE DIVESTED OF HIS TITLE BY SUBSEQUENT CADASTRAL PROCEEDINGS.
— A land which has been duly registered and for which a Torrens certificate of title has been issued cannot be given to another
person in a cadastral proceeding. (Legarda and Prieto v. Saleeby, 31 Phil., 590; Reyes and Nadres v. Borbon and Director of
Lands, 50 Phil., 791.)

DECISION

HULL, J.:

Plaintiff brought suit in the Court of First Instance of Rizal claiming to be the owner of a strip of land situated in that province,
then in the possession of defendants, and for damages for its unlawful detention. After the case had been pending in the trial
court for many years, an agreed statement of facts was entered into between the parties and signed by themselves and by
their various attorneys of record.

Defendants are the owners of a parcel of land described in the original certificate of title No. 333 of the office of the register of
deeds of the Province of Rizal, issued on the 31st of January, 1905, pursuant to land registration proceedings. Subsequently,
in cadastral proceedings, plaintiff claimed to be the owner of a large tract of land, part of which was claimed to have been
included in the certificate of title No. 333, above mentioned.

In the statement of facts it was agreed that the strip of land in dispute was included within the original certificate of title of
defendants, and in view of this stipulation of fact, the trial court held that defendants were the owners of the land in question
and therefore were entitled to its possession and were not responsible in damages for its detention.

Section 134 of the Code of Civil Procedure authorizes judgment on an agreed statement of facts. This appeal therefore raises
only the narrow question of law, "Can land which has been duly registered and for which Torrens certificate of title has been
issued be given to another in a cadastral proceeding?"

This question has been repeatedly answered by this court. The two cases of Legarda and Prieto v. Saleeby (31 Phil., 590),
and Reyes and Nadres v. Borbon and Director of Lands (50 Phil., 791), are sufficient to show that the original owner cannot
be divested of title by subsequent cadastral proceedings. The judgment appealed from is therefore affirmed. No expression
as to costs. So ordered.

Avanceña, C.J., Abad Santos, Vickers and Diaz, JJ., concur.

FIRST DIVISION

[G.R. No. L-47847 : July 31, 1981.]

DIRECTOR OF LANDS, Petitioner, vs. COURT OF APPEALS and MANUELA PASTOR, Respondents.

DECISION

MAKASIAR, J.:

By this petition for review on certiorari, the Director of Lands seeks to set aside the decision of the Court of Appeals in C.A.G.R.
No. 59853-R affirming the decision of the Court of First Instance of Batangas in LRC Case No. N-893 granting the application
for registration under R.A. 496 of thirteen cranad(13) parcels of land in the name of herein private respondent Manuela Pastor.

It appears that on May 8, 1974, respondent Manuela Pastor filed with the Court of First Instance of Batangas LRC Case No.
N-893, an application for confirmation of imperfect title over thirteen cranad(13) lots situated in Gulod and Pallocan, Batangas
City.

The application shows that seven cranad(7) of the lots, specifically Lots Nos. 9186-A, 9186-B, 9186-D, 9330-A, 9330-C, 9402-
A and 9402-D were allegedly inherited by respondent Manuela Pastor from her parents Rafael Pastor and Natalia Quinio who
died on July 1, 1938 and July 12, 1908, respectively. The other six cranad(6) lots, namely Lots Nos. 9402-B, 9402-E, 9397-B,
9397-D, 9367 and 9360 were allegedly inherited by respondent from her aunt Rosario Pastor who died on January 13, 1950
without any surviving heir except respondent herein. In her application, the respondent claims that she and her predecessors-
in-interest had been in continuous, uninterrupted, open, public, adverse and notorious possession of the lots under claim of
ownership for more than thirty cranad(30) years.
On June 24, 1974 the application was amended to correct the description of two lots.

The Director of Lands filed an opposition to the application on the ground that applicant Manuela Pastor and her predecessors-
in-interest neither had title in fee simple nor imperfect title under Section 48 of the Public Land Law, as amended, over the lots
in question.

No other persons filed opposition to the application.

Accordingly, the Court of First Instance of Batangas, acting as a land registration court, issued an order of general default with
the exception of the Director of Lands, and then proceeded to hear the applicant, her witnesses, and oppositor Director of
Lands.

During the hearings, the applicant presented as her witnesses her nephew Antonio M. Pastor, and Geodetic Engineer Quirino
P. Clemeneo. Applicant Manuela Pastor testified on her behalf that she has remained the owner and possessor of the lots in
question; that her possession has been peaceful, public, open, continuous, adverse against the whole world and in the concept
of owner; that she had paid the taxes thereon; and that the said lots were planted to sugar cane.

Witness Antonio M. Pastor corroborated in all material respects the testimony of his aunt Manuela Pastor.

The Geodetic Engineer, Quirino P. Clemeneo, testified that he conducted the survey of some of the lots and verified the survey
conducted by the Bureau of Lands on the others. He found that the lots did not encroach upon private and public lands.

As part of her documentary evidence, applicant Manuela Pastor presented the certifications of the Treasurer of Batangas City
showing payments of the real estate tax on the lots from 1965 to 1974 cranad(Exhibits J, J-1, J-2, J-3, J-4 and J-5) and official
receipts of payments of real estate tax on the same lots for 1975 cranad(Exhibits K, K-1 and K-2).

Apart from the foregoing, applicant presented, however, a certification from the Land Registration Commission cranad(Exhibit
L) stating that Lot No. 9330 of the Cadastral Survey of Batangas, Province of Batangas, was declared public land in Cadastral
Case No. 41, LRC Cad. Record No. 1706. She likewise submitted another certification from the Land Registration Commission
cranad(Exhibit L-1) to the effect that Lots Nos. 9186, 9360, 9367, 9397 and 9402 of the Cadastral Survey of Batangas, Province
of Batangas, were the subject of a decision in Cad. Case No. 43, LRC Cad. Record No. 1712, although no decree of registration
has as yet been issued.

On August 6, 1975 the Court of First Instance of Batangas rendered a decision pertinent portions of which read as follows:

“From the evidence presented, it has been established that as early as in the year 1913, the original owners of the seven
cranad(7) parcels of land located in the barrio of Gulod, Batangas City, designated as Lots Nos. 9330-A, 9330-C, 9186-A,
9186-B, 9186-D, 9402-A and 9402-D, as reflected in the plan Csd-12122 Sheet 1 cranad(Exhibit ‘E’), were spouses Rafael
Pastor and Natalia Quinio. Natalia Quinio died on July 12, 1908. Since then, Rafael Pastor possessed the said lots peacefully,
openly, continuously, adversely against the whole world and in the concept of owner up to his death in 1938. After the death
of Rafael Pastor on July 1, 1938, Manuela Pastor, the applicant herein, being the only child and sole heiress, came into
possession and ownership thereof by way of inheritance. From 1938 when the applicant inherited the said lots from her
deceased parents and up to the present, she has remained the owner and possessor thereof; that her possession over the
said lots has been peaceful, public, open, continuous, adverse against the whole world and in the concept of owner up to the
present; that the applicant had paid the estate and inheritance taxes thereon before the Japanese Occupation; that the said
lots were planted with sugar cane, and since the year 1964 there were no tenants but paid workers were provided with huts
for their use therein; that there were no buildings, houses or other improvements thereon. The other six cranad(6) lots located
in the barrio of Pallocan, Batangas City, designated as Lots Nos. 9397-B, 9397-D, 9367, 9360, 9402-B and 9402-E, as
reflected in the plans marked as Exhibits ‘E’, ‘G’, ‘H’, ‘H-1’, ‘H-1-a’ and ‘H-2’, were originally owned by the applicant’s aunt,
Dra. Rosario Pastor; that the latter possessed the said lots peacefully, openly, continuously, adversely against the whole world
and in the concept of owner up to her death in 1950; that after the death of Dra. Rosario Pastor on January 13, 1950, the
applicant, Manuela Pastor, being the only niece and sole heiress, came into possession and ownership thereof by way of
inheritance. From 1950 when the said applicant inherited the said lots from her deceased aunt and up to the present, she has
remained the owner and possessor thereof; that her possession over the said lots has been peaceful, public, open, continuous,
adverse against the whole world and in the concept of owner up to the present; that the applicant had paid the estate and
inheritance taxes thereon; that the said lots were planted with sugar cane, and since the year 1964 there were no tenants but
paid workers were provided with huts for their use therein; that there were no buildings, houses or other improvements thereon.

“Evidence further shows that the late Rafael Pastor and Dra. Rosario Pastor, are brother and sister. Dra. Pastor died single
and without issue; that applicant, Manuela Pastor, together with her predecessors-in-interest since the year 1913 and up to
the present have been in open, public, peaceful, continuous, adverse and uninterrupted possession over the said thirteen
cranad(13) lots in question; that said lots were covered by tax declarations in the name of herein applicant, as shown in the
Assessment Certificate issued by the City Assessor of Batangas cranad(Exhibit ‘1’), and the taxes thereon have been paid by
the applicant cranad(Exhibits ‘J’, ‘J-1’, ‘J-5’, ‘K’, ‘K-1’ and ‘K-2’); that there were no lien or incumbrance affecting said lots.
Furthermore, applicant testified that she did not claim any portion of the road which bounded the lots in question, nor the
portion of the creeks or river; that any of the said lots were not within any reservation of any kind.

“As required by this Court, the applicant submitted the following:

“(a) a certification of the Land Registration Commission that Lot No. 9330 of the Cadastral Survey of Batangas Record No.
1706 was declared ‘public land’ in the decision rendered thereon. It is further certified that copy of said decision relative to the
aforementioned lot is not available in this Commission cranad(Exhibit ‘L’); cranad(b) a certification of the Land Registration
Commission, that no decrees of registration have as yet been issued to lots Nos. 9186, 9360, 9367 and 9397 and 9402 of the
Cadastral Survey of Batangas cranad(Exh. ‘L-1’); and cranad(c) a certification issued by officer-in-charge Records Division of
the Bureau of Lands to the effect that the thirteen cranad(13) lots situated in Barrios Gulod and Pallocan, Batangas City, are
not covered by any kind of public land, application or patent cranad(Exh. ‘M’).

“All the documentary exhibits of applicant were submitted in evidence as offered, there being no objection on the part of the
oppositor. Oppositor Director of Lands through City Fiscal of Batangas did not offer any contradictory evidence.

“Indisputably and by highly credible evidence, the applicant gave more than ample proof of her rights to the grant of title over
the properties in question. By herself and through her predecessors-in-interest, the applicant has been in open, public,
peaceful, continuous, uninterrupted and adverse possession of the thirteen cranad(13) parcels of land up to the present — all
for the requisite period of time and under a bona fide claim of ownership which entitle her to confirmation of title over the
properties subject of this application.

“. cra . finding the application for confirmation and grant to title under Act 496 as amended, to be well-founded and fully
substantiated by evidence sufficient and requisite under the law, the Court hereby decrees the registration of:

“x x x

“in favor of applicant, MANUELA PASTOR . cra .” chanroblesvirtualawlibrary(pp. 49-60, Record on Appeal, p. 45, rec.).

Not, satisfied with the decision of the Court of First Instance, petitioner Director of Lands appealed the same to the Court of
Appeals assigning the following errors:

‘First Assignment of Error

‘THE LOWER COURT ERRED IN GRANTING THE APPLICATION OF MANUELA PASTOR FOR CONFIRMATION OF HER
ALLEGED IMPERFECT TITLE TO LOTS NO. 9330-A AND 9330-C DESPITE EVIDENCE ADDUCED BY APPLICANT
HERSELF THAT SAID LOTS WERE DECLARED PUBLIC LAND IN A PREVIOUS CADASTRAL PROCEEDING.’

‘Second Assignment of Error

‘THE LOWER COURT ERRED IN GRANTING THE APPLICATION OF MANUELA PASTOR FOR CONFIRMATION OF HER
ALLEGED IMPERFECT TITLE TO LOTS NO. 9186-A, 9186-B, 9186-D, 9402-A, 9402-B, 9402-D, 9402-E, 9397-B, 9397-D,
9367 and 9360 DESPITE EVIDENCE SUBMITTED BY APPLICANT HERSELF THAT A DECISION RESPECTING SAID
LOTS HAD BEEN RENDERED IN A PREVIOUS CADASTRAL PROCEEDING.’

‘Third Assignment of Error

‘THE LOWER COURT ERRED IN HOLDING THAT THERE IS ADEQUATE EVIDENCE OF THE ALLEGED IMPERFECT
TITLE OF MANUELA PASTOR TO THE THIRTEEN cranad(13) LOTS SUBJECT OF THE APPLICATION’cralaw cranad(pp.
11-12, rec.).

On February 9, 1978 the Court of Appeals rendered judgment affirming in toto the decision of the Court of First Instance of
Batangas.

Hence, this petition.

Substantially, the same issues, as raised by petitioner in the Court of Appeals, are brought before US.

Petitioner asserts that the decision rendered in Cadastral Case No. 41 cranad(Exhibit L) declaring Lot No. 9330 — from which
Lots Nos. 9330-A and 9330-C were derived — constitutes res adjudicata as to the nature of the lots in question and therefore,
a bar to appellee’s application.

Additionally, petitioner also argued that:

“Lots Nos. 9186-A, 9186-B and 9186-D of the Cadastral Survey of Batangas, were derived from Lot No. 9186. Lots Nos. 9402-
A, 9402-B, 9402-D and 9402-E were derived from Lot No. 9402. Lots Nos. 9397-B and 9397-D were derived from Lot No.
9397.

“As shown by applicant’s Exhibit L-1, Lots Nos. 9186, 9360, 9367, 9397 and 9402 were the subject of a decision rendered in
Cad. Case No. 43, LRC Cad. Record No. 1712, although no decree of registration has as yet been issued therein.

“The certificate, Exhibit L-1, is dated June 4, 1975. The decision of the lower court was rendered more than two months later,
on August 6, 1975. Thus, on the basis of Exhibit L, the decision of the cadastral court might already be final when the appealed
decision was rendered. If such be the case, the decision of the cadastral court constitutes res adjudicata and it is a bar to the
present land registration proceeding under Act No. 496 cranad(Lopez v. Director of Lands, 48 Phil. 589; Section 1. paragraph
cranad(f), Rule 16, Rules of Court).

“Assuming that the decision of the cadastral court was not yet final when the appealed decision was rendered, it was
nevertheless, litis pendentia which, under Section 1, paragraph cranad(e), Rule 16 of the Rules of Court, is likewise a bar to
the present proceeding for land registration case under Act No. 496.

“Either way, whether the decision of the cadastral court in Cad. Case No. 43 had become final or not, the present proceeding
for land registration under Act No. 496 cannot prosper because of the principles of res adjudicata and litis pendentia”
chanroblesvirtualawlibrary(pp. 15-16, rec.).

WE find no legal basis to uphold the foregoing contentions of petitioner. It is clear from the evidence on record that in the
proceedings had before the Court of First Instance of Batangas, acting as a land registration court, the oppositor Director of
Lands, petitioner herein, did not interpose any objection nor set up the defense of res adjudicata with respect to the lots in
question. Such failure on the part of oppositor Director of Lands, to OUR mind, is a procedural infirmity which cannot be cured
on appeal. Section 2, Rule 9, Revised Rules of Court of 1964, in no uncertain language, provides that:

“SEC. 2. Defenses and objections not pleaded deemed waived. — Defenses and objections not pleaded either in a motion to
dismiss or in the answer are deemed waived; . cra .”

All defenses therefore not interposed in a motion to dismiss or in an answer are deemed waived cranad(Santiago, et al. vs.
Ramirez, et al., L-15237, May 31, 1963, 8 SCRA 157, 162; Torreda vs. Boncaros, L-39832, January 30, 1976, 69 SCRA 247,
253).

Thus, the defense of res adjudicata when not set up either in a motion to dismiss or in an answer, is deemed waived. It cannot
be pleaded for the first time at the trial or on appeal cranad(Phil. Coal Miner’s Union vs. CEPOC, et al., L-19007, April 30,
1964, 10 SCRA 784, 789).

But granting for a moment, that the defenses, of res adjudicata was properly raised by petitioner herein, WE still hold that,
factually, there is no prior final judgment at all to speak of. The decision in Cadastral Case No. 41 does not constitute a bar to
the application of respondent Manuela Pastor; because a decision in a cadastral proceeding declaring a lot public land is not
the final decree contemplated in Sections 38 and 40 of the Land Registration Act.

A judicial declaration that a parcel of land is public, does not preclude even the same applicant from subsequently seeking a
judicial confirmation of his title to the same land, provided he thereafter complies with the provisions of Section 48 of
Commonwealth Act No. 141, as amended, and as long as said public land remains alienable and disposable cranad(now
sections 3 and 4, P.D. No. 1073).

With respect to Cadastral Case No. 43, the evidence on record is too scanty to sustain the view of the petitioner that the
decision rendered therein constitutes res adjudicata, or in the absence of finality thereof, litis pendentia. On the contrary,
private respondent has amply shown that no final decree whatsoever was issued in connection with said cadastral case, even
as it is not known in whose favor said decision was rendered. As found by the Court of Appeals:

“Again, we sustain the appellee. There is an ambiguity as to what was adjudicated in Case No. 43. If the lots in question were
in that case awarded to a third party, the latter should have intervened in this case. But no private party has challenged the
application for registration” chanroblesvirtualawlibrary(p. 30, rec.).

II

Finally, petitioner argues for the first time on appeal that “there is no substantial evidence to show that she cranad(private
respondent Manuela Pastor) and her predecessors-in-interest have been in possession of the lots sought to be titled for a
period of at least thirty cranad(30) years and in the manner provided in Section 48, as amended, of the Public Land Law.”

WE find no merit in the foregoing argument of petitioner. The uncontradicted testimony of private respondent Manuela Pastor,
which was further corroborated by the testimony of Antonio Pastor, conclusively established beyond doubt that the respondent,
together with her predecessors-in-interest since the year 1913 and up to the present, had been in open, continuous, exclusive,
and notorious possession and occupation of the lots in question under a bona fide claim of ownership. Moreover, the
documentary evidence submitted by private respondent also show that the lots have been declared for taxation purposes in
the name of respondent Manuela Pastor cranad(Exhibit ‘I’), and the taxes thereon have been paid by said respondent herein
cranad(Exhibits ‘J’, ‘J-1’ to ‘J-5’, ‘K’, ‘K-1’ and ‘K-2’). And finally, Geodetic Engineer Quirino Clemeneo, who conducted the
survey of some of the lots and verified the survey conducted by the Bureau of Lands, testified that the thirteen cranad(13) lots
in question did not encroach upon public or private lands. All these are unmistakable indicia that respondent Manuela Pastor
has performed and complied with all the conditions essential to entitle her to a confirmation of her imperfect title over the
thirteen cranad(13) lots subject of her application.

WHEREFORE, THE DECISION OF THE COURT OF APPEALS IS AFFIRMED, AND THE PETITION IS HEREBY
DISMISSED. NO COSTS.

SO ORDERED.
[ GR No. L-19535, Jul 10, 1976 ]

MINDANAO v. DIRECTOR OF LANDS +

DECISION127 Phil. 8

MAKALINTAL, J.:

Appeal from an order of the Court Of First Instance of Batangas (Lipa City) dismissing appellants' "application for registration
of the parcel of land consisting of 107 hectares, more or less, situated in the barrio of Sampiro, Municipality of San Juan,
Province of Batangas, and designated in amended plan PSU-103696 as Lot A."

The proceedings in the court a quo are not disputed. On August 4, 1960 appellants filed an application for registration of the
land above described pursuant to the provisions of Act 496. They alleged that the land had been inherited by them from their
grandfather, Pelagio Zara, who in turn acquired the same under a Spanish grant known as "Composicion de Terrenos
Realengos" issued in 1888. Alternatively, should the provisions of the Land Registration Act be not applicable, applicants
invoke the benefits of the provisions of Chapter VIII, Section 48, subsection (b) of C.A. 141 as amended, on the ground that
they and their predecessor-in-interest had been in con-tinuous and adverse possession of the land in concept of owner for
more than 30 years immediately preceding the application.

Oppositions were filed by the Director of Lands, the Director of Forestry and by Vicente V. de Villa, Jr.

The latter's opposition recites:

". . . that the parcel of land sought to be registered by the appli-cants consisting of 107 hectares, more or less, was included
in the area of the parcel of land applied for registration by Vicente S. de Villa Sr. in Civil Case No. 26, L.R. Case No. 601 in
this Court, which was decided by this same Court through the then incum-bent Judge, the Honorable Juan P. Enri-quez, on
September 30, 1949; that the parcel sought to be registered by the applicants was declared public land in said decision; that
they (the oppositors Vicente V. de Villa Jr. and Vicente S. de Villa Sr.) have an interest over the land in question because for
a period of more than sixty (60) years, the de Villas have been in possession, and which possession, according to them, was
open, continuous, notorious and under the claim of ownership; that the proceeding being in rem, the failure of the applicants
to appear at the case No. 26, L.R. Case No. 601 to prove their imperfect and incomplete title over the property, barred them
from raising the same issue in ano-ther case; and that as far as the deci-sion in Civil Case No. 26, L.R. Case No. 601 which
was affirmed in the appellate court in CA-G.R. No. 5847-R is concerned, there is already 'res-adjudicata' in other words, the
cause of action of the applicant is now barred by prior judgment; and that this Court has no more jurisdiction over the subject
matter, the decision of the Court in said case having transferred to the Director of lands."

On November 15, 1960 the de Villas (de Villa, Sr. was subsequently included as oppositor) filed a motion to dismiss, invoking
the same grounds alleged in its opposi-tion, but principally the fact that the land applied for had already been declared public
land by the judgment in the former registration case.

The trial court, over the objection of the applicants, granted the motion to dismiss by order dated January 27, 1961, holding,
inter alia, that "once a parcel of land is declared or adjudged public land by the court having jurisdiction . . . it cannot be the
subject anymore of another land registration proceeding, . . . (that) it is only the Director of Lands who can dispose of the same
by sale, by lease, by free patent or by homestead."

In the present appeal from the order of dismissal neither the Director of Lands nor the Director of Forestry filed a brief as
appellee. The decisive issue posed by applicants-appellants is whether the 1949 judgment in the previous case, denying the
application of Vicente S. de Villa, Sr., and declaring the 107 hectares in question to be public land, precludes a subsequent
application by an alleged possessor for judicial confirmation of title on the basis of continuous possession for at least thirty
years, pursuant to Section 48, subsection (b) of the Public Land Law, C.A. 141, as amended. This provision reads as follows:

"The following-described citizens of the Philippines, occupying lands of the public domain or claiming to own any such lands
or an interest therein, but whose titles have not been perfected or comple-ted, may apply to the Court of First Ins-tance 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:".

"(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 imme-diately preceding the filing of the appli-cation for confirmation of title, except when prevented by war
or force majeure. These shall be conclusively presumed to have performed all the conditions essen-tial to a Government grant
and shall be entitled to a certificate of title under the provisions of this Chapter."

The right to file an application under the foregoing provision has been extended by Republic Act No. 2061 to December 31,
1968.

It should be noted that appellants' application is in the alternative: for registration of their title of ownership under Act 496 or
for judicial confirmation of their "imperfect" title or claim based on adverse and continuous possession for at least thirty years.
It may be that although they were not actual parties in that previous case the judgment therein is a bar to their claim as owners
under the first alternative, since the proceeding was in rem, of which they and their predecessor had constructive notice by
publication. Even so this is a defense that properly pertains to the Government, in view of the fact that the judgment declared
the land in question to be public land. In any case, appellants' imperfect possessory title was not disturbed or foreclosed by
such declaration, for precisely the proceeding contemplated in the aforecited provision of Commonwealth Act 141 presupposes
that the land is public. The basis of the decree of judicial confirmation authorized therein is not that the land is already privately
owned and hence no longer part of the public domain, but rather that by reason of the claimant's possession for thirty years
he is conclusively presumed to have performed all the conditions essential to a Government grant.

On the question of whether or not the private oppositors-appellees have the necessary personality to file an opposition, we
find in their favor, considering that they also claim to be in possession of the land, and have furthermore applied for its purchase
from the Bureau of Lands.

WHEREFORE, the order appealed from is set aside and the case is remanded to the Court a quo for trial and judgment on
the merits, with costs against the private oppositors-appellees.

Reyes, JBL, Bengzon, Zaldivar, Sanchez, Ruiz Castro, Angeles, and Fernando, JJ., concur.

Order of dismissal set aside.

G.R. No. L-2954 November 16, 1950

THE PEOPLE OF THE PHILIPPINES, plaintiff -appellee,

vs.

ALEJANDRO ALMAZORA, defendant-appellant.

Mariano Manahan, Jr. for appellant.

Office of the Solicitor General Felix Bautista Angelo and Solicitor Augusto M. Luciano for appellee.

MONTEMAYOR, J.:

This is one of several treason cases originally filed in the People's Court but which, with the abolition of said Tribunal, were
subsequently endorsed to the Court of First Instance of Laguna where the acts of treason charged were allegedly committed.
The appellant Alejandro Almazora was found guilty and sentenced by he Court of First Instance of Laguna to fourteen (14)
years, eight (8) months and one (1) day of reclusion temporal with the accessory penalties provided by law, and to pay a fine
of P5,500, with costs. Half of the period of his provisional imprisonment was credited to him.

Because of the nature of the penalty imposed, the appeal should ordinarily go to the Court of Appeals. Appellant Alejandro
Almazora however, was tried with several treason indictees in a mass trial altho under different and separate indictments. The
evidence presented during the mass trial applies to all the treason defendants including the appellant. What is more, the acts
of treason charged against several accused were supposed to have been committed on or about the same time or occasion.
At least one of these defendants was sentence to reclusion perpetua and his appeal including the record of the evidence
naturally came to this Tribunal. That is the reason why the appeal of Alejandro Almazora also found its way to this court, under
the provisions of section 17 of Republic Act No. 296 otherwise known as the Judiciary Act of 1948.

The appellant was charged under five accounts. During the trial no evidence was presented to substantiate counts 4 and 5
which were presently abandoned by the prosecution.

The defendant has admittedly always been a Filipino citizen, a native and resident of the Philippines.

Under the first count, the defendant is accused of having acted as informer or agent of the Japanese forces, going with them
and participating in their raids, and of having joined and served in the organization "Makabayang Katipunan Ng Mga Pilipino"
otherwise known as the Makapili. To prove this count, three witness Federico Baylon, Tranquilino Martinez and Briccio Malitic
testified to the effect that sometime in December, 1944, a chapter of the Makapili organization was established in Calauan,
Laguna by one Proceso Delgado; that the accused became a member of that organization which was composed mostly of the
Ganaps and Sakdalistas; that some members including the accused, armed with rifles used to accompany Japanese soldiers
in raids against guerrillas and that on several occasions, the accused and his fellow Makapilis actually arrested suspected
guerrillas and turned them over to the Japanese. After examining the evidence we agree with the trial court that the charge
under the first count was duly proven. We, however, disagree with the lower court when it held that although the evidence of
the prosecution is definite, conclusive and convincing that the accused together with former members of the Sakdalista and
Ganap organizations in Calauan attached themselves to and cooperated with the enemy invaders, and that armed with the
rifle he took direct part in raids against the guerrillas conducted by the Japanese soldiers, there is no direct and conclusive
proof that he was actually appointed or inducted into the Makapili organization and that consequently, the accused could not
be considered as having joined the Makapili organization. In the case of People vs. Alitagtag (45 Off. Gaz., 7151 ), we have
held that appointment to enemy forces need not proven by any enlistment or appointment, but may be referred from
circumstances. We are satisfied that from the acts of the accused in being seen frequently at the headquarters of the Makapili
organization at Calauan, associating with well-known Makapili members, joining them in their raids against the guerrillas either
by themselves or in company with the Japanese soldiers, being armed with a rifle like the other Makapili members and
otherwise conducting himself like any other member of that military organization, we can infer and find as we do find that he
joined the Makapili organization.

Under count 2, the appellant is charged with having taken part on December 23, 1944, in the arrest in Calauan, Laguna of
Norberto Ungkiatco who was suspected of being a guerrilla and who after the arrest was taken to the Japanese garrison where
he was confined and tortured. To established this count, Matias Mendoza testified to the effect that as a member of the
guerrillas, he had orders to go to the poblacion of Calauan on December 23, 1944, to observe; that he entered a movie house
where he was arrested by a group of armed men composed of appellant Alejandro Almazora and other Makapili like his
(appellant's) brother Marcelo Almazora, Proceso Delgado and others; that on the way to the Japanese garrison he witnessed
the arrest of Norberto Ungkiatco by the same group of Makapilis; that he and Ungkiatco were taken to Makalauang Spring,
then being used as a garrison by the Japanese soldiers though at the time there were no Japanese soldiers there; that at the
said Makalauang Spring they were investigated by the same group, especially by Proceso Delgado. After five days Mendoza
was released.

Ungkiatco stated that he was a member of the R.O.T.C. guerrillas; that he was arrested at the time and in the manner testified
to by Mendoza, by the group composed of the appellant, his (appellant's) brother Marcelo Almazora, Proceso Delgado and
others; that after being taken to Makalauang Spring he was investigated and tortured by Proceso Delgado; that as a result of
the clubbing and torture to which he was subjected, he lost some of his teeth and one of his ribs was fractured, and that he
was released after a week of confinement. We also agree with the trial court that count No. 2 was proven.

Under count 3, which refers to the arrest of Andres Ramos, Aurora Azucena told the court that on January 15, 1945, a group
of armed Makapilis composed of the appellant Alejandro Almazora, his brother Marcelo Almazora, Proceso Delgado and a
few others, all armed with rifles and in company with Japanese soldiers went to her house in the barrio of San Isidro, Calauan;
that Proceso Delgado ordered her husband Ramos to come down his house, which he did; that Proceso Delgado immediately
struck him on the back of the head with the butt of his revolver, inflicting a wound; that her husband, Andres Ramos, was taken
away by the group and was thereafter never heard from.

Crispin Aniceta stated in court that on the same occasion he was also arrested by the same group which included the appellant
Alejandro Almazora, all of the members of which were armed with rifles; that he (Crispin) witnessed the arrest of Andres
Ramos; that he and Andres Ramos and other barrio residents who had likewise been arrested were taken to the covenant of
the town of Calauan which was then occupied by the Makapilis and their families; that after some investigations Crispin was
released but Andres Ramos was retained in the convent and was never heard from up to the date of the trial.

The trial court equally found that count 3 was duly proven. We agree with the Laguna court that two witnesses have
satisfactorily established the arrest of Andres Ramos on January 15, 1945, by a group composed of the appellant and other
Makapilis all of whom were armed; that after the arrest, Andres Ramos was taken to the convent in the poblacion then occupied
by Makapilis where he was detained, and that thereafter Ramos did not return to his house and was never heard from.

The appellant was the only witness presented to prove his innocence. He denied the charges made against him and said that
he was not at the places and on the occasions where and when he was alleged to have helped in the arrest and investigation
of guerrilla suspects like Matias Mendoza, Norberto Ungkiatco, Andres Ramos, and Crispin Aniceta. He equally denied that
he ever joined the Makapili organization. He claims that the witnesses who testified against him hated his father who was a
Ganap before the war and that after his death, which occurred while he was confined in Bilibid awaiting trial as a treason
indictee, said witnesses tried to heap all their testimony, hatred and feeling of revenge on him (appellant) as the son of the
man they hated. It has been proven however that the affidavits of these witnesses who testified against the appellant had been
made and filed long before the death of his father, so that it cannot be true that in testify by against the accused they merely
wanted to send him to jail in place of his father, the object of their hatred, who was already dead. The trial court did not believe
the defense of the appellant. Neither are we inclined to give it serious consideration. We quote a pertinent portion of the
decision of the trial court:

The court had the opportunity to watch the witnesses for the prosecution, while they were testifying, and finds no reason to
doubt their testimony.

The acts of the defendant, conclusively established by the evidence presented, constitute both adherence to the enemy and
overt acts of treason. The defense of alibi put up by the accused cannot be taken seriously. As between his sole, unsupported
declaration, and the logical, straight-forward, and unbiased testimony of the witnesses for the prosecution, the choice is not
hard to make.
In conclusion, we find the appellant guilty of the charge of treason. The Solicitor General recommends the affirmance of the
decision appealed from. Finding no reversible error in it, the same is hereby affirmed with costs.

Paras, Feria, Pablo, Bengzon, Padilla, Tuason, Reyes and Jugo, JJ., concur.

G.R. No. L-18814 July 31, 1962

ANACLETO P. NAVARRO, applicant-appellant,

vs.

THE DIRECTOR OF LANDS, oppositor-appellee.

Francisco Ventura for applicant-appellant.

Office of the Solicitor General for oppositor-appellee.

MAKALINTAL, J.:

This is an appeal by Anacleto P. Navarro from the order of the Court of First Instance of Manila dated July 1, 1959, dismissing
his application for registration of lots Nos. 1 and 2 of Plan PSU-117149, both residential properties located in Malate along the
Dewey Boulevard.

The application was filed on February 6, 1958 and docketed as Case No. N-53, L.R.C. Rec. No. N-14566. The Director of
Lands interposed an opposition, alleging that the lots applied for are part of the public domain belonging to the Republic of the
Philippines. Evidence was submitted by the applicant on February 11 and March 30, 1959, after which the hearing was
adjourned to June 18. On May 8 of the same year the Director of Lands filed a motion to dismiss on two grounds: (1) that the
application was barred by prior judgment and (2) that the same was improper application for judicial confirmation of imperfect
title under Section 48, paragraph (b), of Public Land Law, as amended by Republic Act No. 1942, which applies only to public
agricultural lands and not to those which are residential in character. The trial court, in its order from which this appeal has
been taken, sustained the motion on both grounds.

It appears that sometime in 1950 the Director of Lands instituted a cadastral proceeding in the Court of First Instance of Manila
(G.L.R.C. Cad. Rec. No. 6, G.L.R.C. Cad. Case No. 1) to settle and adjudicate title to the same lots now in litigation. The
Republic of the Philippines claimed them as part of the public domain. One Caridad Guillen Cortez filed an answer and was
later on substituted by appellant Anacleto P. Navarro, who sought registration of the properties in his name pursuant to the
provision of Section 48, paragraph (b), of the Public Land Act. In the decision of the aforesaid Court dated July 17, 1954 his
claim was denied and the two lots were declared public lands. The case was appealed to the Court of Appeals, which rendered
a decision of affirmance on June 29, 1957 (CA-G.R. No. L-13983-R). Still unsatisfied, Navarro elevated the case to this Court
for review by certiorari, but the petition was dismissed "for being factual and for lack of merit" in a resolution dated September
6, 1957.

The plea of res judicata must be upheld. The requisites of this plea are: (1) the former judgment must be final; (2) it must have
been rendered by a court having jurisdiction of the subject matter and the parties; (3) it must be a judgment on the merits; and
(4) there must be, between the first and second actions, (a) identity of parties (b) identity of subject matter and (c) identity of
cause of action. The only controversy here is with respect to the last element, namely, identity of cause of action, the others
being concededly present. In the case of De la Rosa vs. Director of Lands, et al., G.R. No. L-6311, Feb. 28, 1955; 53 O.G.
No. 13, p. 4092 this Court held:

The parcel of land (Lot No. 4) sought to be registered being the same lot already declared public land in Land Registration
Case No. 295, G.L.R.O. No. 30055, where the herein appellant and the Director of Lands were parties and the applicant
therein failed to establish title secured from the Spanish Government or possession of the land in accordance with the Public
Land Act then in force, the decision in the former case declaring Lot No. 4 as part of the public domain must be deemed res
judicata.

The cause of action in both the present case and the former cadastral proceeding is the registration of the two lots in question.
The specific issue involved is whether the lots applied for are part of the public domain or have so far been possessed by
appellant that he must be deemed to have acquired title thereto which is sufficient for registration in his name. The declaration
by final judgment in the cadastral proceeding that they are public lands settled this issue once and for all.

It is contended that the basis for such declaration was the insufficiency of appellant's evidence in the former case to prove
continuous possession by him and by his predecessors-in-interest since July 26, 1894, as required by the Public Land Law
before its amendment by Republic Act No. 1942, and that since in the present case his claim is based on possession only for
a period of thirty years immediately preceding the filing of his new application in 1958, in accordance with the amendatory law,
the issue has entirely changed and consequently he should have been allowed to prove such claim. Even on this theory,
however, we note that both in the decision of the Court of First Instance in the cadastral case and in the decision of affirmance
rendered by the Court of Appeals, the fact as well as the length of the alleged possession of appellant and his predecessors-
in-interest were placed in issue and duly passed upon. The appellate court stated therein:

The evidence of appellant Anacleto P. Navarro stems mainly from his own testimony. He declared that since 1936, he was
lessee of the two lots from the spouses Emilio Arceo and Margarita Jimenez. He fenced it and built a dike because when it
was low tide, part of the land was submerged in water. He made fillings on the property, planted coconuts thereon and built
two houses, which were destroyed during the liberation of Manila. Sometime later he heard that the property was sold to
Rosario Dumlao, who, in turn, sold it to Bernardino Landeta; that thereafter the latter sold the land to Caridad Guillen Cortez
from whom he (appellant Anacleto P. Navarro) leased and later bought to property. Appellant Navarro admits that neither
Caridad Guillen Cortez nor her predecessors ever declared the land in question for taxation purposes; and that none of them
paid taxes on said land.

We start with the statement that it is a rule long familiar in this jurisdiction that all lands are presumed to be a part of the public
domain; that to overcome this presumption, evidence must be more than a mere preponderance and that vague and indecisive
proofs are insufficient even in the absence of opposition on the part of the government.

Considering the averment in appellant's answer to the effect that his title over the two lots is supposed to have been derived
from Margarita Jimenez, the question of whether or not the latter, that is Margarita Jimenez, ever became owner of the property
looms large in the resolution of the present case. To begin with, it is well to remember, as a pivotal point, that said Margarita
Jimenez only claims ownership over Lot No. 2 which is the smaller of the two lots. Of course, she made a statement that Lot
No. 1 is not included in her claim, but that if, in fairness, it be disclosed at the hearing that some of it is really owned by her,
she would also include that portion in her claim. This vague and uncertain claim to Lot No. 1 remains what it is, uncertain.
Unable to pin-point her alleged property, Margarita Jimenez, was, during the course of the trial, taken to the place. And true
enough, she laid claim to Lot No. 2 and also but to a small fraction of Lot No. 1.

On the face of this uncertain evidence, we are persuaded to state that right at this point, Lot No. 1 should be excluded from
appellant's claim and declared public land.

Inspite of the averment that the two lots in controversy constitute privately owned property, the evidence is unanimous to the
effect that none of the alleged owners ever declared the land for taxation purposes. None of them ever paid taxes on the
property. It has been truthfully said that tax declarations and tax receipts constitute evidence of great weight in support of
possession or ownership. Tupaz, et al. vs. Ricamora, et al., 37 Gaceta Official, No. 28, pp. 617, 618; Director of Lands vs.
Aaron, et al., CA-G.R. No. 10337-R, October 28, 1954; Director of Lands vs. Baligod, et al., CA-G.R. No. 8749-R, May 13,
1955; Director of Lands vs. Depositario, et al., CA-G.R. No. 10308-R, May 20, 1955; Angeles, et al. vs. Duran, et al., CA-G.R.
No. 16233-R, March 4, 1957. Any owner, the most ignorant included, knows his obligation of seeing to it that his real property
is declared for taxation purposes and that he regularly pay the taxes thereon. This obligation could perhaps have escaped the
attention of one person. But to say that all the alleged owners from Juana Guinto, thru Margarita Jimenez and her husband
Francisco Arceo, Bernardino Landeta, Caridad Guillen Cortez and finally appellant Anacleto P. Navarro forgot to declare the
property for taxation purposes and to pay the taxes thereon, is utterly unbelievable. Moraza vs. El Director de Terrenos, 37
Gaceta Official, No. 129, pp. 2819, 2821. Paraphrasing Mr. Justice Torres in Cruzado vs. Bustos and Escaler, 34 Phil. 17, 35,
none of the foregoing persons ever did "believe himself to be the owner of the land he claims."

One look at the sketch, Exhibit 1, and sketch, Exhibit 2, of the Director of Lands, will readily show why lots 1 and 2 in question
could not have been private property. The whole of Lot No. 1 and part of Lot No. 2 were originally under water forming part of
Manila Bay; while the remainder or upper portion of Lot No. 2 forms part of the mouth of Estero Maytubig which flows into the
Bay.

Then there is the oral evidence for the government.

Novardo Advincula, Civil Engineer of the Bureau of Public Works, testified as follows: When the government proposed to
extend Dewey Boulevard, he was assigned to locate the right of way from Cortabitarte to Libertad. He used the plan Exhibit 1
of the Bureau of Lands and was guided by the technical description furnished by the said bureau in his job to locate exactly
the proposed line of the right of way. In 1939 he made an ocular inspection of the place. It was then that he found that the two
lots in question were under water; so much so, that at that time there were bancas tied to the poles in that place and that there
were no improvements on the land. Of course, the place at present is no longer under water as it was drained and filled up by
the Bureau of Public Works which dredged the Manila Bay and pumped the dredged soil from the Bay into the area and
throughout Dewey Boulevard Extension. This filling was made before the war.

Another witness, Enrique Alcantara, surveyor of the Bureau of Lands, testified: He knows the land in question because he was
ordered by the Chief Surveyor to identify the adjoining owners; that the land, consisting of the two lots described in plan Exhibit
A has not been included in the cadastral survey in 1913-1914 because the said lands were outside the shore-line of Manila
Bay. He likewise declared that he executed survey of Dewey Boulevard Extension in 1935; that at that time he had to wade
from Vito Cruz to Libertad for the reason that the water thereon was hip deep and that Lots Nos. 1 and 2 were under water
and no improvements were found thereon. In 1951, so this witness continued, he made an investigation of the adjoining
owners of the land in question and that, then he found that said lots were already filled up. Not knowing who the owners of the
two lots were, he tried to gather information from the Office of the City Assessor of Manila. The said Office gave out a written
statement to the effect that the lots aforesaid definitely were never declared for taxation or assessment purposes. The fact
that the property in question was under water prior to the filling thereof is corroborated by appellant Navarro himself. Navarro
testified that in the year he leased the land, he built a dike as part of the land was submerged under water during low tide.
During the course of the ocular inspection, Margarita Jimenez declared that the land she was claiming became high "thru the
sand thrown from the sea by means of the machinery" probably belonging to the government. Tr. ocular inspection, p. 8.

True it is, that there is testimony in the record calculated to show that when Margarita Jimenez and her husband acquired this
property in 1907, they were informed by their vendor, Jacinto Villalon — not Juana Guinto — that said Villalon had been in
possession of the land since the Spanish regime. However, the exact date such alleged possession by Villalon commenced
has not been established, and neither appellant nor any of his alleged predecessors in interest, has shown acquisition of the
land by composition title from the Spanish government or by possessory information title or by any of the legal modes of
acquiring public lands.

Upon the facts, the conclusion is irresistible that appellant's evidence is utterly inadequate to support his claim of ownership
over the lots in question.

It is quite clear from the foregoing that the Court of Appeals, in dismissing appellant's claim in the cadastral case, found it as
a fact that he had not possessed the lands in question for even the thirty years now asserted by him. Such finding is conclusive
on the question of possession and precludes any new litigation concerning it.

The foundation principle upon which the doctrine of res judicata rests is that parties ought not to be permitted to litigate the
same issue more than once; that, when a right or fact has been judicially tried and determined by a court of competent
jurisdiction, or an opportunity for such trial has been given, the judgment of the court, so long as it remains unreversed, should
be conclusive upon the parties, and those in privity with them in law or estate. (National Bank vs. Barreto, 52 Phil. 818, 824;
Escudero vs. Flores, et al., G.R. No. L-7401, June 25, 1955).

One further point may be noted: When Republic Act No. 1942 was approved on June 22, 1957, appellant's appeal in the
cadastral case was still pending in the Court of Appeals and after it was decided therein he filed before us a petition for review
by certiorari, invoking precisely the provision of the new law requiring only continuous possession, under claim of ownership,
for a period of thirty years to entitle the possessor to apply for judicial confirmation of his imperfect title. The dismissal of the
petition by this Court for lack of merit, therefore, constituted an adjudication of appellant's claim in the light of such new
legislation.

Having thus sustained appellee's plea that this case is already barred by prior judgment, we deem it unnecessary to pass
upon the second legal point raised by him, namely, that the lots in question being residential in character, they do not fall within
the purview of Section 48, paragraph (b), of the Public Land Law, as amended by Republic Act No. 1942, and hence cannot
be the subject of judicial confirmation of an imperfect title.

WHEREFORE, the order appealed from is affirmed, with costs against appellant.

G.R. No. 169336

SPOUSES MELCHOR andSATURNINA ALDE,Petitioners,

- versus -

RONALD B. BERNAL, OLYMPIA B. BERNAL, JUANITO B. BERNAL, and MYRNA D. BERNAL,

Respondents.

Present:

CARPIO, J., Chairperson,BRION,DEL CASTILLO,ABAD, andPEREZ, JJ.

March 18, 2010

DECISION

CARPIO, J.:

The Case

This is a petition for review[1] of the 6 May 2005[2] and 3 August 2005[3] Resolutions of the Court of Appeals in CA G.R. SP
No. 00195. In its 6 May 2005 Resolution, the Court of Appeals dismissed the petition for review filed by petitioners Melchor
and Saturnina Alde (petitioners) for failure to comply with the Rules of Court. In its 3 August 2005 Resolution, the Court of
Appeals denied petitioners motion for reconsideration.
 The Facts

Sometime in 1957, Adriano Bernal (Adriano), father of respondents Ronald, Olympia, Juanito and Myrna, all surnamed Bernal
(respondents), entered upon, occupied and cultivated a parcel of land situated in San Antonio West, Don Carlos, Bukidnon.
After a survey in 1992, the property was designated as Cadastral Lot No. 1123, Cad 1119-D, Case 8 with an area of 8.5043
hectares.

In January 1994, Adriano secured a loan of P5,000 from petitioners and turned over physical possession, occupation and
cultivation of 1.5 hectares of the property.[4] In June 1994, Adriano secured another loan of P10,000 from petitioners and used
another 1.5 hectares as security for its payment.[5] Petitioners then took possession and cultivated another 1.5 hectares of
the property.

In September 1994, Adriano informed petitioners that he could no longer pay the loan obligation and that he was selling the
whole property to petitioners for P80,000. The sale was evidenced by a Kasabotan sa Palit sa Yuta[6] dated 22 September
1994, signed by Adriano as owner of the land, Leona Bernal as Adrianos wife, with respondent Ronald Bernal (Ronald), among
others, as witness. Petitioners took possession of the whole property and continued the cultivation of the land.

On 18 October 1994, Original Certificate of Title No. AO-7236[7] (OCT No. AO-7236) in the names of Adriano for an area of
3 hectares, Ronald for an area of 3 hectares, and respondent Juanito Bernal (Juanito) for an area of 2.5043 hectares was
issued. OCT No. AO-7236 originated from Certificate of Land Ownership Award No. 00073938 (CLOA No. 00073938) issued
by the Department of Agrarian Reform pursuant to Republic Act No. 6657.[8]

Then, sometime in April 2002, respondents demanded from petitioners P50,000 as additional consideration for the property.
Respondents also informed petitioners, for the first time, of the existence of OCT No. AO-7236. Petitioners rejected
respondents request since they already bought the entire property in 1994 and requested that respondents turn-over to them
OCT No. AO-7236. Respondents refused.

On 13 June 2002, respondents filed a complaint for recovery of ownership and possession of parcels of land with prayer for
the issuance of a preliminary mandatory injunction and damages against petitioners before the Municipal Circuit Trial Court of
Don Carlos-Kitaotao-Dangcagan, Don Carlos, Bukidnon (MCTC).[9] Respondents claimed that Adriano erroneously included
their shares of the property in the sale. Juanito claimed that Adriano gave him 2.5043 hectares when he got married in 1978.
While Ronald claimed that Adriano gave him 3 hectares when he got married in 1987.

In their Answer,[10] petitioners declared that they have been in open, notorious and peaceful occupation, possession and
cultivation of the property in the concept of an owner since 1994 when they bought the property from Adriano. Petitioners
argued that respondents have no legal right over the property and that CLOA No. 00073938 issued in respondents name is
void. Petitioners also asked that they be declared the absolute and legal owners of the property.

The Ruling of the MCTC

In its 19 November 2003 Decision,[11] the MCTC dismissed respondents complaint. According to the MCTC, Adriano was the
sole owner of the property and that Adriano sold the whole property to petitioners. The MCTC found no evidence of the transfer
of ownership of the property from Adriano to Juanito and Ronald.

Respondents appealed to the Regional Trial Court, Malaybalay City, Branch 9 (RTC).

The Ruling of the RTC

In its 9 August 2004 Decision,[12] the RTC declared that, from the start until the sale to petitioners, the property was owned
in common by Adriano, Juanito and Ronald. The dispositive portion of the RTCs 9 August 2004 Decision reads:

WHEREFORE, the decision of the Lower Court is hereby modified as follows:

1). Declaring the Kasabutan Sa Palit Sa Yuta dated September 22, 1994, to be valid legally and enforceable and must be
adjudged to be owned by the defendants-appellees only in so far as the same refers to the portion previously owned by Adriano
Bernal.

2). Declaring the plaintiffs-appellants as still the true and absolute owners of the respective three (3) hectares and 2.5043
hectares as above stated and must be issued separately [sic] a title therefor.

3). Ordering the defendants-appellees to return and deliver possession of the properties above mentioned to the plaintiffs-
appellants.

4). Directing the Registry of Deeds to issue separate Certificate[s] of Title to the plaintiffs-appellants Ronald Bernal for 3.0000
hectares and Juanito Bernal for 2.5043 hectares and to the defendants-appellees the remaining portion of three hectares.

5). No award of any damages shall be awarded to any of the parties and with costs de officio.

SO ORDERED.[13]

Petitioners filed a motion for reconsideration. In its 25 October 2004 Order,[14] the RTC denied the motion.
Petitioners filed an appeal before the Court of Appeals.

The Ruling of the Court of Appeals

In its 6 May 2005 Resolution, the Court of Appeals dismissed the petition on technical grounds. The 6 May 2005 Resolution
of the Court of Appeals declared:

Upon perusal of the case records, this Court FINDS the following infirmities that warrants the outright dismissal of the instant
case, to wit:

1. The Regional Trial Court was not furnished with a copy of the petition, in violation of Section 1 of Rule 42 of the 1997
Revised Rules of Court;

2. There was no proper verification, in violation of Section 4 of Rule 7 of the 1997 Revised Rules of Civil Procedure; and

3. The nature of the case should only be Petition for Review and not Petition for Review on Certiorari because the latter
would fall under Rule 45, an action before the Supreme Court.

Wherefore, premises considered, the instant Petition is hereby DISMISSED.

SO ORDERED.[15]

Petitioners filed a motion for reconsideration. In its 3 August 2005 Resolution, the Court of Appeals denied the motion.

Hence, this petition.

The Issues

Petitioners raise the following issues:

I. THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING THE PETITION FOR REVIEW ON PURELY
TECHNICAL GROUNDS DISREGARDING THE MERITS OF THE APPEAL;

II. THE HONORABLE COURT OF APPEALS ERRED IN FAILING TO APPRECIATE THE MERITS OF THE CASE WHICH
COULD HAVE REVERSED THE DECISION OF THE LOWER COURT HAD THE PETITION FOR REVIEW BEEN GIVEN
DUE COURSE.[16]

The Ruling of the Court

The petition is meritorious.

The Court of Appeals dismissal of petitioners petition on purely technical grounds was unwarranted. We agree with petitioners
that the late filing and service of a copy of the petition to the RTC was not a substantial infirmity that should cause the outright
dismissal of the petition.

Likewise, the verification of a pleading is only a formal, not jurisdictional, requirement.[17] The purpose of requiring a
verification is to secure an assurance that the allegations in the petition are true and correct, not merely speculative.[18] This
requirement is simply a condition affecting the form of pleadings, and non-compliance therewith does not necessarily render
the pleading fatally defective.[19]

The dismissal of appeals on purely technical grounds is frowned upon for it is far more better for the courts to excuse a
technical lapse and afford the parties a review of the case on the merits to attain the ends of justice.[20]

Respondents Failed to Prove their Title over the Property

As to the merits of the case, petitioners argue that, contrary to the findings of the RTC, respondents failed to present any
evidence to show that they owned parts of the property in dispute. Petitioners insist that the claim of Juanito and Ronald that
Adriano donated to them their respective shares in the property is not supported by any evidence. Petitioners maintain that
Juanito and Ronalds claims are self-serving and merely fabricated.

As to the Kasabotan sa Palit sa Yuta, petitioners point out that it was prepared in the local dialect of which Adriano and Ronald
were conversant. According to petitioners, Adriano and Ronald cannot just deny knowledge of the said document and claim
that they just affixed their signatures without reading the document. Petitioners maintain that Adriano was the sole owner of
the property and that he had the right to sell, transfer, convey and dispose of the same.

Petitioners aver that they have been in open, public and peaceful possession, occupation and cultivation of the property in the
concept of an owner since the sale of the property by Adriano in 1994. Petitioners pray that they be declared the absolute and
legal owners of the property. Petitioners also pray that respondents be ordered to turn over CLOA No. 00073938 and OCT
No. AO-7236 to them, the real owners of the property.[21]

On the other hand, respondents insist that Adriano could not have sold the entire property because he was no longer the
owner thereof on 22 September 1994. Respondents maintain that Adriano verbally donated to them their respective shares in
the property way back in 1978 and 1987. Respondents explain that Adriano did not know that he was selling the whole property
and not just his assigned 3 hectares to petitioners. Ronald also claims that he did not know the contents of the deed of sale
when he signed it as a witness.

We agree with petitioners that respondents failed to present any evidence to show that they owned parts of the property in
dispute. First, in the stipulation of facts during the pre-trial conference before the MCTC, respondents admitted that the land
was owned by Adriano. While both Juanito and Ronald claimed that Adriano donated to them their respective portions of the
property when they got married in 1978 and 1987, respectively, they did not present any deed of donation. As the MCTC
stated in its 19 November 2003 Decision, the transfers cannot be by donation because the law requires that for donation to
be effective, it must be in a public instrument and in this case there is none.[22]

Second, the tax declaration offered by respondents as evidence only mentioned Adriano as the owner of the whole
property.[23] While tax declarations are not conclusive evidence of ownership, they constitute proof of claim of ownership.[24]
Respondents did not present any credible explanation why the tax declaration was only under the name of Adriano.

Third, contrary to Ronalds claim, the June 1994 deed of mortgage[25] did not clearly show that he was the owner of the
property and that petitioners recognized him as such. While Ronalds name appeared in the body of the deed, the designation
as owner of the property under his name was crossed-out. It was Adriano who signed the deed of mortgage and the designation
as owner of the property appeared under his name.

Fourth, Ronald was present when the deed of sale was executed on 22 September 1994 and he even signed as one of the
witnesses. We find it hard to believe that Ronald and Adriano did not understand the contents of the deed when it was written
in their local dialect. Moreover, it took respondents more than seven years to question Adrianos sale of the whole property to
petitioners.

Lastly, respondents claim ownership of the property based on OCT No. AO-7236. However, a certificate of title is not equivalent
to title.[26] In Lee Tek Sheng v. Court of Appeals,[27] we explained:

By title, the law refers to ownership which is represented by that document [the Original Certificate of Title or the Transfer
Certificate of Title]. Petitioner apparently confuses certificate with title. Placing a parcel of land under the mantle of 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 interchangeable.[28] (Emphasis supplied)

In this case, respondents cannot claim ownership over the disputed portions of the property absent any showing of how they
acquired title over the same.

Accordingly, the property must be reconveyed in favor of petitioners, the true and actual owners of the property. An action for
reconveyance is a legal and equitable remedy granted to the rightful owner of land which has been wrongfully or erroneously
registered in the name of another for the purpose of compelling the latter to transfer or reconvey the land to him.[29]

However, since petitioners did not make a direct attack on the validity of OCT No. AO-7236 and had not asked for the
cancellation of the original certificate of title as required by Section 48[30] of Presidential Decree No. 1529,[31] this Court
cannot cancel OCT No. AO-7236 and order the issuance of a new certificate of title in the name of petitioners. Any direct
attack on the validity of a Torrens certificate of title must be instituted with the proper Regional Trial Court.[32] This case
originated in the Municipal Circuit Trial Court. Even if we consider petitioners counter-claim as a petition for the cancellation
of OCT No. AO-7236 and, thus, a direct attack on the certificate of title, the MCTC still does not have jurisdiction over the
cancellation of a Torrens title.

WHEREFORE, we GRANT the petition. We SET ASIDE the 6 May 2005 and 3 August 2005 Resolutions of the Court of
Appeals in CA G.R. SP No. 00195. We REINSTATE the 19 November 2003 Decision of the Municipal Circuit Trial Court of
Don Carlos-Kitaotao-Dangcagan, Don Carlos, Bukidnon.

NATIONAL HOUSING AUTHORITY VS. BASA, Jr. GR No. 149121. April 20, 2010

FACTS:

Spouses Basa loaned from NHA secured by a real estate mortgage over their properties. Spouses Basa did not pay the loan
despite repeated demands. To collect its credit, the NHA filed a verified petition for extrajudicial foreclosure of mortgage before
the Sheriff’s Office in Quezon City.

After notice and publication, the properties were sold at public auction where NHA emerged as the highest bidder. On April
16, 1991, the sheriff’s certificate of sale was registered and annotated only on the owner’s duplicate copies of the titles in the
hands of the respondents, since the titles in the custody of the Register of Deeds were among those burned down when a fire
gutted the City Hall of Quezon City on June 11, 1988. On April 16, 1992, the redemption period expired, without respondents
having redeemed the properties. Shortly thereafter, on April 24, 1992, NHA executed an Affidavit of Consolidation of
Ownership over the foreclosed properties, and the same was inscribed by the Register of Deeds on the certificates of title in
the hand of NHA. NHA moved for the issuance of an alias writ of possession. Before the RTC could resolve the motion for the
issuance of an alias writ of possession, respondents, filed a Motion for Leave to Intervene and Petition in Intervention.
Respondents theorized that the instrument is deemed registered only upon actual inscription on the certificate of title in the
custody of the civil registrar. Since the sheriff’s certificate was only inscribed on the owner’s duplicate certificate of title, and
not on the certificate of title in the possession of the Register of Deeds, then there was no effective registration and the one-
year redemption period had not even begun to run. Thus, respondents asked the RTC, among others, to declare the
foreclosure sale null and void, to allow the respondents to redeem the mortgaged properties.

NHA maintained that respondents’ right of redemption had long expired on April 15, 1992 since the certificate of sale was
inscribed on their TCT Nos. 285413 and 287008 a year earlier, or on April 16, 1991. RTC issued an Order admitting the
Petition in Intervention and treating the same as the petition to set aside sale. NHA filed a special civil action for certiorari and
prohibition before the Court of Appeals. The Court of Appeals rendered a Decision in favor of the NHA. Respondents filed a
motion for reconsideration. The Court of Appeals, in its Amended Decision, reconsidered its earlier stance. It declared that the
period of redemption had not expired as the certificate of sale had not been registered or annotated in the original copies of
the titles supposedly kept with the Register of Deeds since said titles were earlier razed by fire.

ISSUE:

Whether or not the annotation of the sheriff’s certificate of sale in the primary entry book of the register of deeds and on the
owner’s duplicate title is sufficient compliance with the requirement of law on registration.

HELD:

The prevailing rule is that there is effective registration once the registrant has fulfilled all that is needed of him for purposes
of entry and annotation, so that what is left to be accomplished lies solely on the register of deeds. NHA followed theprocedure
in order to have its sheriff’s certificate of saleannotated in the transfer certificates of title.

It was not NHA’s fault that the certificate ofsale was not annotated on the transfer certificates of title which were supposed to
be in the custody of the Registrar, since the same were burned. Neither could NHA be blamed for the fact that there were no
reconstituted titles available during the time of inscription as it had taken the necessary steps in having the same reconstituted
as early as July 15, 1988. NHA did everything within its power to assert its right.

Since entry of the certificate of sale was validly registered, the redemption period accruing to respondents commenced
therefrom, since the one-year period of redemption is reckoned from the date of registration of the certificate of sale.

G.R. No. L-21593 April 29, 1966

RAYMUNDA S. DIGRAN, in her capacity as Administratrix of Estate of Deceased Ruperta Cabucos, petitioner,

vs.

AUDITOR GENERAL, DEPUTY AUDITOR GENERAL, COMMISSIONER OF PUBLIC HIGHWAYS and CITY ENGINEER OF
CEBU CITY, respondents.

D. de la Victoria and L. D. de la Victoria for petitioner.

Office of the Solicitor General Arturo A. Alafriz, Assistant Solicitor General F. C. Zaballero and Solicitor C. V. Bautista for
respondents.

BENGZON, J.P., J.:

On June 22, 1909, Ruperta Cabucos bought from, and fully paid to the Government, Lot No. 638 of the Banilad Friar Lands
Estate situated in Cebu City for which a formal deed of conveyance was executed in her favor on November 27, 1915 by the
Friar Lands Agency. On February 28, 1916 Transfer Certificate of Title No. RT-3918 (T-320) was issued to her. The Banilad
Friar Lands Estate was among the friar lands acquired by the Government for resale to actual tenants or occupants pursuant
to Act 1120 of the Philippine Commission.

Sometime in 1914 or 1915, without prior expropriation proceedings, the government constructed Mango Avenue, a municipal
road,1 passing through Lot No. 638. A claim for compensation was filed with the Municipality of Cebu but it was still unpaid
when World War II broke out.

In 1927 Ruperta Cabucos subdivided Lot No. 638 into Lots Nos. 638-A, 638-B and 638-C. Lot No. 638-B is the portion of Lot
No. 638 covered and traversed by Mango Avenue.

Ruperta Cabucos died in 1940. In 1951 her heirs subdivided Lot No. 638 into eight lots, namely, Lots Nos. 638-A-1, 638-A-2,
638-B, 638-C-1, 638-C-2, 638-C-3, 638-C-4, and 638-C-5, and apportioned them to themselves except Lot No. 638-B, the
road lot, which remained in the name of her estate. Candido Samson, her son, became extrajudicial administrator of the estate.
The extrajudicial partition and adjudication was submitted to the Court of First Instance of Cebu for approval, and on May 30,
1953 said court decreed the issuance of the corresponding certificates of title to the heirs but ordered the annotation on the
certificate of title of Lot No. 638-B of the following: "... this lot shall not be closed nor disposed of to the prejudice of the using
public as such highway, ..."

On April 20, 1961 Candido Samson filed with the City Appraisal Committee of the City of Cebu a claim for the value of Lot No.
638-B as compensation therefor. He amended said claim on July 12, 1961. On August 15, 1961 he supplemented it with a
demand for the payment of interests and attorney's fees. Thereupon, the City Appraisal Committee appraised the land at
P15.00 per square meter or P13,245.00 for 883 square meters, the area traversed by the road. The claim was thereafter
referred to the City Fiscal of Cebu who recommended payment thereof. However, the City Engineer, to whom said claim was
later indorsed, recommended its denial. This recommendation was concurred in by the Cebu Division Engineer of the Bureau
of Public Highways and, on the strength of said recommendation, the Commissioner of Public Highways denied the claim in
question. A request for reconsideration was denied.1äwphï1.ñët

On July 9, 1962 the Commissioner of Public Highways transmitted the aforesaid claim to the Auditor General. The City Auditor
of Cebu whose comment was requested by the Auditor General recommended its payment, but such recommendation
notwithstanding, the Deputy Auditor General, on February 18, 1963 denied the claim on the grounds that (1) claimant failed to
register the same with the Committee on Claims pursuant to Administrative Order No. 6 dated July 29, 1946; (2) claimant and
his predecessors are guilty of laches; (3) the right to enforce the claim has prescribed; (4) the owner presumably consented
to the construction of the road; (5) the road already existed when the title was actually issued, thus making said title subject to
the road encumbrance pursuant to Section 39 of the Land Registration Act; and (6) the annotation on Lot No. 638-B — "that
this lot shall not be claimed nor disposed of to the prejudice of the using public as such highway" — should be respected by
the heirs of Ruperta Cabucos.

On February 16, 1963 Raymunda S. Digran, a daughter of Candida Samson, became administratrix of the estate of Ruperta
Cabucos. On February 18, 1963 the Deputy Auditor General, as stated, denied the claim. This decision was the subject of two
motions for reconsideration, the later one having been denied on June 10, 1963. On July 9 of the same year Raymunda S.
Digran appealed to this Court from said decision altho on July 1, 1963 she filed an amended claim for compensation with the
Auditor General. On August 7, 1963 the Auditor General desisted from rendering a decision on the amended claim on July 1,
1963 for the reason that the case was already sub judice.

The bone of contention is whether or not the heirs of Ruperta Cabucos are entitled to compensation for Lot No. 638-B, the
road lot.

The Government denies the obligation to give due compensation for Lot No. 638-B mainly on the grounds that Ruperta
Cabucos' title over Lot No. 638 was subject to the Government's reservations for public use, such as rights of way and other
public servitudes under Sections 19, 20 and 21 of Act 1120 and Section 39 of Act 496; and, that the right to enforce the claim
for compensation is barred by prescription and laches.

The grounds relied upon by the Government, stated above, lack merit. Firstly, Sections 19, 20 and 21 of Act 1120 sanction no
authority for the Government to take private lands covered by said Act for public use without just compensation. Sections 19,
20 and 21 state:

SEC. 19. No purchaser or lessee under this Act shall acquire any exclusive rights to any canal, ditch, reservoir, or other
irrigation works, or to any water supply upon which such irrigation works are or may be dependent, but all of such irrigation
works and water supplies shall remain under the exclusive control of the Government of the Philippine Islands and be
administered under the direction of the Chief of the Bureau of Public Lands for the common benefit of those interests dependent
upon them. And the Government reserves as a part of the contract of sale in each instance the right to levy an equitable
contribution or tax for the maintenance of such irrigation works, the assessment of which shall be based upon the amount of
benefits received, and each purchaser under this Act, by accepting the certificate of sale or deed herein provided to be given,
shall be held to assent thereto. And it is further provided that all lands leased or conveyed under this Act shall remain subject
to the right of way of such irrigation canals, ditches, and reservoirs as now exist or as the Government may hereafter see fit
to construct.

SEC. 20. All persons receiving title to lands under the provisions of this Act shall hold such lands subject to the same public
servitudes as existed upon lands owned by private persons under the sovereignty of Spain, including those with reference to
the littoral of the sea and the banks of navigable rivers and rivers upon which rafting may be done.

SEC. 21. The Civil Governor, when authorized by resolution of the Commission, may by proclamation, designate any tract or
tracts of said lands as nonalienable, and reserve the same for public use, and thereafter such tracts shall not be subject to
sale, lease, or other disposition under this Act.

Section 19 withholds from a purchaser of a friar land exclusive right to any canal, ditch, reservoir, or other irrigation works, or
to any water supply upon which such irrigation works are or may be dependent which were already existing at the time of
purchase. It also subjects the land so purchased to the right of way of such canal, ditch, reservoir or irrigation works. Section
20 holds the friar lands subject to public servitudes also imposed on other lands owned by private persons. Section 21 gives
the Civil Governor, upon resolution of the Philippine Commission, the authority to designate any tract or tracts of friar land as
non-alienable and reserve the same for public use. Needless to say, the road construction through Lot No. 638-B is not the
servitude contemplated in Sections 19 and 20, above quoted. Moreover, it has not been shown that Lot No. 638-B was declared
nonalienable by the Civil Governor prior to sale to, and purchase by, Ruperta Cabucos so as to prevent her from acquiring
ownership thereover.

The provision of Section 39 of the Land Registration Act which states:

SEC. 39. Every person receiving a certificate of title in pursuance of a decree of registration, and every subsequent purchaser
of registered land who takes a certificate of title for value in good faith shall hold the same free of all encumbrances except
those noted on said certificate, and any of the following encumbrances which may be subsisting namely:

xxx xxx xxx

Third. Any public highway, way, private way established by law or any Government irrigation canal or lateral thereof; where
the certificate of title does not state that the boundaries of such highway, way, or irrigation canal or lateral thereof, have been
determined.

has no application in this case for the reason that Mango Avenue was constructed subsequent to the acquisition of Lot No.
638 by Ruperta Cabucos. In other words, Mango Avenue is not an "encumbrance which may be subsisting" when Ruperta
Cabucos purchased the land from the Government in 1909.

Furthermore, it would be unfair for the Government to invoke the above statutory reservations and take back from Ruperta
Cabucos Lot No. 638-B without just compensation after selling it to her and collecting the full price therefor. To do so would
abridge her individual right, guaranteed by the Constitution, to own private property and keep it, free from State appropriation
without due process and without just compensation. Ours is a government dedicated to uphold and preserve the right of an
individual, a fundamental concept in a democratic society which spells the big difference between democracy and
totalitarianism. The Government must respect and observe individual rights for, otherwise, the citizenry would be liable to lose
confidence in it. Said Mr. Justice Montemayor in the celebrated case of Herrera vs. Auditor General:2

Here before us is a case of law abiding citizen and taxpayer who as far back as 1934, realizing the need of the Government
of his lot for road purposes, instead of compelling said Government to resort to expropriation proceedings, readily and in all
ingenuousness allowed the Government to immediately occupy it. In his implicit trust in his Government, he did not even
bother to require it to make a judicial deposit of the approximate value of his land, not even to make an offer of a price it would
pay for it. But since then, he has continuously asked for the payment of said fair price as a condition precedent to his
conveyance and sale of the property. But the Government neglected to make an offer, much less make payment, then evidently
forgot all about, and now it flatly refuses to pay, evidently forgetting that it had also neglected to secure a conveyance of the
property, so that Herrera, as already stated, is still the owner of the same. ... There is nothing that can more speedily and
effectively embitter a citizen and tax-payer against his Government and alienate his faith in it, than an injustice and unfair
dealing like the present case.

Secondly, laches and prescription cannot deprive Ruperta Cabucos of her ownership over Lot No. 638-B nor would they
dispossess her of her right to demand compensation due for its taking. The land being registered under the Torrens System
the Government cannot acquire ownership over the same by prescription in derogation of the registered owner.3 Such was
the ruling of this Court in Herrera vs. Auditor General,4 whose facts are very similar to the instant case. There the Government
took a registered property for road purposes sometime in 1934 without prior expropriation proceedings or payment of
compensation. The owner, who executed no formal deed of conveyance in favor of the Government, filed his claim for
compensation only in 1955.

This case would be resolved differently from Jaen vs. Agregado,5 cited by the Government, where the landowner had formally
conveyed the property to the Government but did not file his claim for the price therefor until after 33 years later. Jaen's claim
being merely one for a sum of money rather than one involving a question on acquisitive prescription, the some was found
and declared to have prescribed. Such is not the nature of the claim instituted in this case.

It is not so clear as to what measures Ruperta Cabucos took to prosecute her claim against the municipal government of
Cebu. But the allegation is to the effect that she in fact filed a claim which, since no payment has yet been made, was probably
simply ignored or lost in the malestrom of official red tape. It should be borne in mind that as of today her heirs are still the
registered owners of lot in question. Their title is clean and they have not transferred it in favor of the Government thru any
instrument or verbal agreement. Their right cannot be more aptly stated than in Alfonso vs. City of Pasay, L-12754, January
30, 1960, where this Court, through Mr. Justice Montemayor, said:

. . . As registered owner, he could bring an action to recover possession at any time because possession is one of the attributes
of ownership of land. However, said restoration of possession by the City of Pasay is neither convenient nor feasible because
it is now and has been used for road purposes. So, the only relief available is for the City of Pasay to make due compensation,
which it could and should have done years ago since 1925.

Mindful as we are that said right is guaranteed by paragraph (2), Section 1, Article III of the Constitution, which reads:

(2) Private property shall not be taken for public use without just compensation.

and by Article 435 of the Civil Code, we see no reason why petitioner's claim should not be sustained.
With respect to the contention that petitioner lost her right to demand compensation for Lot No. 638-B because she failed to
register her claim in 1946 with the Claims Committee created by Administrative Order No. 6 of July 29, 1946, suffice it to state
that said committee was created only for the purpose of determining the obligations of the National Government and failure to
register any claim with it did not bar such claim inasmuch as Administrative Order No. 6 did not so provide.

Having actually appealed from the decision signed by the Deputy Auditor General of February 18, 1963, petitioner is estopped
from maintaining that said decision is not the one appealable under Section 1 of Rule 45 of the Rules of Court. Nonetheless,
it may be worth pointing out that the Deputy Auditor General, being the next highest official in the General Auditing Office, has
charge of said office in the absence of the Auditor General6 and as such performs the functions of the latter, e.g., signing
decisions on money claims. That the Deputy Auditor General regularly performed his duties when he signed the decision
appealed from is presumed in the absence — as herein — of a contrary showing.

The authorities are agreed that the owner of the land expropriated for public use is entitled to recover the fair market value of
the property at the time of taking plus interest at the legal rate.7 However, only the fair market value of Lot No. 638-B as of
August 1961, the date the amended claim was filed with the City Engineer of Cebu, is disclosed by the records. In fairness to
the heirs of Ruperta Cabucos who have been deprived of the use of the lot in question for quite a long time, this Court is
inclined under the circumstances to award as reasonable compensation the amount of P13,245.00 fixed by the Cebu Appraisal
Committee.

Wherefore, the decision appealed from is reversed. Petitioner-appellant Raymunda S. Digran, as administratrix of the estate
of Ruperta Cabucos, is hereby ordered to execute a formal deed of conveyance on Lot No. 638-B in favor of the Republic of
the Philippines for which the Republic of the Philippines shall pay, as it is hereby ordered to pay, petitioner-appellant Raymunda
S. Digran the sum of P13,245.00 plus interest at the legal rate from the date of filing of her claim on April 20, 1961 until the full
amount is paid and attorney's fees in the amount of P1,500.00. No costs. So ordered.

SECOND DIVISION G.R. No. 151235

HEIRS OF JUAN PANGANIBAN & INES PANGANIBAN, namely:ERLINDA B. PACURSA, ERNESTOP. BACONGA, EVELYN
BACONGA, Present:

AMY B. BIHAG, SIEGFREDOBACONGA, IMELDA B. PACALDO,REBECCA B. LI, OFELIA B. PUNO, J.,OALIVAR, GEMMA
BACONGA, Chairman,MARIE INES BACONGA, MELANIE AUSTRIA-MARTINEZ,BACONGA, and ANITA FUENTES,
CALLEJO, SR.,

Petitioners, TINGA, and CHICO-NAZARIO, JJ.

- versus - ANGELINA N. DAYRIT, July 28, 2005

Respondent.

DECISION

TINGA, J.:

This is a petition for review on certiorari seeking the partial reversal of the Decision[1] and the Resolution[2] denying the motion
for reconsideration rendered by the Court of Appeals (CA) Second Division in CA-G.R. CV No. 57148.

This case stemmed from a petition for cancellation of owners duplicate copy of Original Certificate of Title (OCT) No. 7864 of
the Registry of Deeds of Misamis Oriental and recovery of damages filed by the heirs of Juan and Ines Panganiban, more
particularly Erlinda B. Pacursa, Ernesto P. Baconga, Asito P. Baconga and Anita B. Fuentes, against Angelina N. Dayrit,
respondent herein, on 3 April 1992.[3] The petition was later amended to add the heirs of Asito P. Baconga as petitioners upon
the latters death and to include a prayer for quieting of title over the property in dispute.[4]

The undisputed operative facts follow.

The property subject of controversy is a two thousand twenty-five (2,025)-square meter portion of a lot denominated as Lot
1436, situated at Kauswagan, Cagayan de Oro City. It constitutes three-fourths (3/4) of Lot 1436, one of the three (3) lots
covered by OCT No. 7864, the other two being Lots 1441 and 1485. OCT No. 7864 was registered in the names of Juan
Panganiban (Juan) and Ines Panganiban (Ines), father and daughter respectively, on 17 April 1940.[5] Juan died sometime in
June 1942[6] while Ines, his only child, died in April 1944.[7]

In the amended complaint filed with the trial court, petitioners alleged that they are the possessors and owners of Lot 1436
which they inherited from the late Juan and Ines. They acknowledge that Lot 1436 was the only remaining lot covered by OCT
No. 7864, Lots 1485 and 1441 having been sold in 1949 to Galo Sabanal and Pablo Dagbay respectively, by virtue of a deed
denominated as Extrajudicial Settlement of Estate Among Heirs and Sale.[8]

The owners duplicate copy of OCT No. 7864 covering Lot 1436 had been lost but upon petition with the trial court in 1977 by
Erlinda B. Pacursa (Erlinda), one of the heirs of Ines and a petitioner herein, the trial court granted the petition.[9] Accordingly,
the Register of Deeds of Misamis Oriental issued an owners duplicate certificate of OCT No. 7864 to Erlinda.[10]
Petitioners further alleged that unknown to them, a certain Cristobal Salcedo (Salcedo) asserted ownership over Lot 1436 and
believing that it was unregistered, sold a portion of it to respondent. The latter subsequently discovered that what she had
bought was registered land. Unable to annotate the deed of sale at the back of OCT No. 7864, respondent fraudulently filed a
petition for issuance of the owners copy of said title, docketed as Misc. Case No. 90-018 in March 1990. This petition of the
respondent alleged that the copy issued to Erlinda was lost in the fire that razed Lapasan, Cagayan de Oro City in 1981. While
the petition mentioned Erlinda as the last one in possession of the alleged lost owners duplicate copy of the title, she was not
notified of the proceedings.[11]

The petition in Misc. Case No. 90-018 was subsequently granted and the Register of Deeds of Misamis Oriental issued an
owners duplicate certificate of OCT No. 7864 to respondent.[12] This second duplicate certificate issued to respondent
contained Entry No. 160180, the annotation of a Notice of Adverse Claim filed by Erlinda.[13] The Notice of Adverse Claim[14]
dated 24 February 1992 alleged in part that Erlinda is one of the lawful heirs of Juan and Ines, the registered owners of the
property, and as such, she has a legitimate claim thereto.

Petitioners further alleged that the newly issued owners duplicate certificate of OCT No. 7864 to respondent was prejudicial
to their previously issued title which is still in existence. Thus, they prayed among others that they be declared as the rightful
owners of the property in question and that the duplicate certificate of OCT No. 7864 in their possession be deemed valid and
subsisting.[15]

In her answer to the amended complaint, respondent denied all the material allegations of the complaint and set up affirmative
and special defenses. She alleged that Lot 1436 was actually sold sometime in 1947 by the petitioners themselves and their
father, Mauricio Baconga. The sale was purportedly covered by a Deed of Definite Sale. Salcedo then came into ownership,
possession and enjoyment of the property in question.[16] On 14 February 1978, Salcedo sold a portion of Lot 1436 with an
area of two thousand twenty- five (2,025) square meters, more or less, to respondent. From then on, the property in question
has been in her actual and physical enjoyment, she added.[17]

Respondent further alleged that the complaint was barred by the principles of estoppel and laches by virtue of the sales
executed by petitioners themselves and their father. The complaint, according to her, also failed to include as defendants, the
heirs of Salcedo who are indispensable parties.[18]

On 10 August 1992, upon motion duly granted, respondent filed a third-party complaint against the heirs of Salcedo alleging
that as such heirs, they carry the burden of warranting that their predecessors in interest were the true, legal and rightful
owners of the property in question at the time of the sale. Hence, she prayed therein that she be maintained in peaceful and
legal ownership, possession and enjoyment of the questioned property.[19]

Answering the third-party complaint, the heirs of Salcedo effectively admitted the existence of the 1978 deed of sale in favor
of respondent by their parents and considered the sale as within the personal and legal right of their parents and an act outside
their control.[20]

After due trial and consideration of the documentary and testimonial evidence adduced by both parties, the trial court rendered
a decision against petitioners and in favor of respondent. The dispositive portion of the decision provides:

WHEREFORE, premises considered judgment is hereby rendered:

1. DISMISSING plaintiffs complaint, for lack of merit and cause of action;
2. DECLARING defendant as the true and real owner of the lot in question;
3. DECLARING the owners duplicate copy of Original Certificate of Title No. 7864 (plaintiffs Exh. A) null and void same
being obtained by plaintiffs when they were not owners anymore of Lot 1436;
4. DECLARING the owners duplicate copy of Original Certificate of Title No. 7864 obtained by defendant (Exh. 1) as the
one valid to be given like faith and credit as the one that was lost and declared null and void; and
5. ORDERING the Register of Deeds of Cagayan de Oro City to issue a transfer certificate of title to Angela N. Dayrit,
herein defendant, for her 2,025 square meter portion of Lot 1436; to Anita Baconga Fuentes for her 505 square meter portion
of Lot 1436 and to Atty. Isabelo N. Pacursa or his heirs, he being allegedly dead already, for his 170 square meter portion of
Lot 1436 and after they shall have presented an approved subdivision plan and an agreement to partition, to issue to each of
them, their respective transfer certificate of title with an area according to the respective technical description corresponding
to each of their land.
Defendants counterclaim and third-party complaint are hereby dismissed.

SO ORDERED.[21]

The Regional Trial Court Decision was modified by the CA on appeal by petitioners. The appellate court held that contrary to
the ruling of the trial court, the valid and subsisting duplicate certificate of OCT No. 7864 was the one issued to Erlinda, not to
respondent, considering that respondent had failed to comply with the mandatory jurisdictional requirements of law for the
reconstitution of title under Sec. 13 of Republic Act No. 26.[22]

The CA invoked the doctrine that a trial court does not acquire jurisdiction over a petition for the issuance of a new owners
duplicate certificate of title if the original is in fact not lost. Citing Strait Times, Inc. v. Court of Appeals,[23] the CA held that the
reconstituted certificate is itself void once the existence of the original is unquestionably demonstrated.[24]

Nonetheless, the CA affirmed in all other respects the ruling of the trial court, including the critical holding that respondent was
the owner of the subject property. The decretal portion of the CAs decision reads:
WHEREFORE, in view of the foregoing, and pursuant to applicable law and jurisprudence on the matter and evidence on
hand, judgment is hereby rendered granting partly the instant appeal. Consequently, the decision of the trial court is MODIFIED
so as to order the cancellation of the owners duplicate copy of OCT No. 7864 issued to defendant Angelina Dayrit and declaring
the owners duplicate copy of OCT No. 7864 (Exh. A and sub-markings with SN No. 014439) to be still valid for all intents and
purposes and to be given like faith and credit as the original. All other aspects are AFFIRMED. No costs.

SO ORDERED.[25] (Emphasis in the original.)

Petitioners now come before this Court seeking the partial reversal of the decision rendered by the CA. They contend that the
CA erred in finding that the tax declarations and the alleged adverse possession of respondent and her predecessor-in-interest
are conclusive proofs of their ownership of Lot 1436. They further contend that the CA erred when it found them guilty of
laches.[26]

However, it is apparent that in order that the petition may be properly resolved, we must ascertain first, who between petitioners
and respondent is the rightful owner of the property in dispute and second, whether petitioners right to recover the property is
barred by laches assuming they are the rightful owners thereof as they claim.

The resolution of the foregoing issues hinges on the question of which owners duplicate certificate of title is valid and
subsisting, the one in petitioners possession or the one issued to respondent. What appears on the face of the title is controlling
in questions of ownership since the certificate of title is an absolute and indefeasible evidence of ownership of the property in
favor of the person whose name appears therein.[27]

The CA correctly ruled that the duplicate certificate of title in petitioners possession is valid and subsisting. This Court had
already ruled in Serra Serra v. Court of Appeals[28] that if a certificate of title has not been lost but is in fact in the possession
of another person, the reconstituted title is void and the court rendering the decision has not acquired jurisdiction over the
petition for issuance of a new title.[29] Since the owners duplicate copy of OCT No. 7864 earlier issued to Erlinda is still in
existence, the lower court did not acquire jurisdiction over respondents petition for reconstitution of title. The duplicate
certificate of title subsequently issued to respondent is therefore void and of no effect.

The registered owners of OCT No. 7864 on the face of the valid and subsisting duplicate certificate of title are still Juan and
Ines, petitioners predecessors in interest.[30] Per Section 46 of the Land Registration Act, no title to registered land in
derogation to that of the registered owner shall be acquired by prescription or adverse possession. This rule taken in
conjunction with the indefeasibility of a Torrens title leads to the conclusion that the rightful owners of the property in dispute
are petitioners. They are indisputably the heirs of the registered owners, both of whom are already dead.

These premises considered, it was error on the part of the trial court to rule that respondent was the owner of the subject
property and for the CA to have affirmed such holding. We rule instead that the successors-in-interest of Juan and Ines are
the legal owners of the subject property, namely petitioners herein.

Petitioners ownership of the property having been established, the question now is whether they are entitled to its possession.
On this point, the Court rules in the negative. Petitioners are no longer entitled to recover possession of the property by virtue
of the equitable defense of laches. Thus, petitioners argument that laches is not applicable to them has no merit. By laches is
meant:

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. The defense of laches is an
equitable one and does not concern itself with the character of the defendants title but only with whether or not by reason of
plaintiffs long inaction or inexcusable neglect, he should be barred from asserting his claim at all, because to allow him to do
so would be inequitable and unjust to defendant.[31]

In our jurisdiction, it is an enshrined rule that even a registered owner of property may be barred from recovering possession
of property by virtue of laches.[32] Thus, in the case of Lola v. Court of Appeals,[33] this Court held that petitioners acquired
title to the land owned by respondent by virtue of the equitable principles of laches due to respondents failure to assert her
claims and ownership for thirty-two (32) years. In Miguel v. Catalino,[34] this Court said that appellants passivity and inaction
for more than thirty-four (34) years (1928-1962) justifies the defendant-appellee in setting up the equitable defense of laches
in his behalf. Likewise, in the case of Mejia de Lucas v. Gamponia,[35] we stated that while the defendant may not be
considered as having acquired title by virtue of his and his predecessors long continued possession for thirty-seven (37) years,
the original owners right to recover possession of the property and the title thereto from the defendant has, by the latters long
period of possession and by patentees inaction and neglect, been converted into a stale demand.[36]

In this case, both the lower court and the appellate court found that contrary to respondents claim of possession, it was
Salcedo, respondents predecessor-in-interest who had been in actual possession of the property. In fact, when the lower court
conducted an ocular inspection on the subject premises sometime on 16 March 1993, the court-appointed Commissioner
elicited from the people residing near the subject property, more particularly Celso Velez, Nieto Abecia and Paquito Nabe, that
Salcedo was the owner and the one in possession of the land until 1978 when respondent became the possessor thereof.[37]

It was only in 1992 or forty-five (45) years from the time Salcedo took possession of the property that petitioners made an
attempt to claim it as their own. Petitioners declared the property for tax purposes, registered their adverse claim to
respondents title, and filed the instant case all in 1992.[38] These actuations of petitioners point to the fact that for forty-five
(45) years, they did nothing to assert their right of ownership and possession over the subject property.

Given the circumstances in the case at bar, the application of the equitable defense of laches is more than justified.

Petitioners claim that prescription and adverse possession can never militate against the right of a registered owner since a
title, once registered cannot be defeated even by adverse, open and notorious possession.[39]

They are right in that regard. But their cause is defeated not by prescription and adverse possession, but by laches.

This Court had occasion to distinguish laches from prescription in the case of Heirs of Batiog Lacamen v. Heirs of Laruan.[40]
It was held therein that:

Laches has been defined as such neglect or omission to assert a right, taken in conjunction with lapse of time and other
circumstances causing prejudice to an adverse party, as will operate as a bar in equity. It is a delay in the assertion of a right
which works disadvantage to another because of the inequity founded on some change in the condition or relations of the
property or parties. It is based on public policy which, for the peace of society, ordains that relief will be denied to a stale
demand which otherwise could be a valid claim. It is different from and applies independently of prescription. While prescription
is concerned with the fact of delay, laches is concerned with the effect of delay. Prescription is a matter of time; laches is
principally a question of inequity of permitting a claim to be enforced, this inequity being founded on some change in the
condition of the property or the relation of the parties. Prescription is statutory; laches is not. Laches applies in equity, whereas
prescription applies at law. Prescription is based on a fixed time, laches is not.[41] (Footnotes are omitted.)

Thus, it is the effect of delay in asserting their right of ownership over the property which militates against petitioners, not
merely the fact that they asserted their right to the property too late in the day.

All the four (4) elements of laches prescribed by this Court in the case of Go Chi Gun, et al. v. Co Cho, et al.[42] and reiterated
in the cases of Mejia de Lucas v. Gamponia,[43] Miguel v. Catalino[44] and Claverias v. Quingco[45] are present in the case
at bar, to wit:

(1) conduct on the part of the defendant, or of one under whom he claims, giving rise to the situation of which complaint is
made for which the complaint seeks a remedy;

(2) delay in asserting the complainants rights, the complainant having had knowledge or notice, of the defendants conduct
and having been afforded an opportunity to institute a suit;

(3) lack of knowledge or notice on the part of the defendant that the complainant would assert the right on which he bases
his suit; and

(4) injury or prejudice to the defendant in the event relief is accorded to the complainant, or the suit is not held to be barred.[46]

Petitioners inaction for forty-five (45) years reduced their right to recover the subject property into a stale demand.

In Mejia,[47] the Court held in essence that the principle of laches is one of estoppel because it prevents people who have
slept on their rights from prejudicing the rights of third parties who have placed reliance on the inaction of the original patentee
and his successors in interest.[48] The following pronouncement in the case of Claverias v. Quingco[49] is therefore apropos
to the case at bar:

Courts cannot look with favor at parties who, by their silence, delay and inaction, knowingly induce another to spend time,
effort and expense in cultivating the land, paying taxes and making improvements thereon for 30 long years, only to spring
from ambush and claim title when the possessors efforts and the rise of the land values offer an opportunity to make easy
profit at his expense.[50]

WHEREFORE, the Petition is DENIED. The challenged decision of the Court of Appeals is AFFIRMED insofar as it ruled that
the claim of petitioners is barred by laches. No pronouncement as to costs.

SO ORDERED.

[G.R. No. L-9335. October 31, 1956.]

CONCORDIA MEJIA DE LUCAS, Plaintiff-Appellee, vs. ANDRES GAMPONIA, Defendant-Appellant.

DECISION

LABRADOR, J.:

Appeal from the judgment of the Court of First Instance of Nueva Vizcaya, Honorable Jose de Venecia, presiding, and
appealed directly to this court as judgment was rendered on a stipulation of facts and only questions of law are raised in the
appeal.

By the stipulation of the parties it appears that on March 13, 1916, free patent No. 3699 was issued over the land subject of
the action in the name of Domingo Mejia. This patent was transcribed in the Office of the Register of Deeds of Nueva Vizcaya
on July 26, 1916 and certificate of title No. 380 issued in the name of Domingo Mejia. On March 24, 1916, after the issuance
of the patent but before the registration of the same, patentee Domingo Mejia deeded the land to Zacarias Ciscar, who
immediately took possession thereof and enjoyed its fruits. Upon his death the property was included in the distribution of his
estate and adjudicated to Roque Sanchez. Roque Sanchez in turn sold the land on January 21, 1940 to Andres Gamponia,
Defendant herein. Sanchez was in possession and enjoyment of the land from the time he acquired it by inheritance from
Ciscar up to the time he sold it to Defendant Andres Gamponia, the latter has also possessed and enjoyed the property from
the time he bought it to date.

Domingo Mejia, upon his death, left no descendants or ascendants and his only surviving kin was his brother Pedro Mejia.
Pedro Mejia is now also dead and is survived by his daughter Concordia Mejia de Lucas, Plaintiff herein. Upon the above facts
the court a quo held that the sale by the patentee to Zacarias Ciscar is null and void, as the sale was made only 11 days after
the issuance of a patent in violation of the provisions of section 35 of Act No. 926. The Court further held that since the land
is registered land no title in derogation to that of the registered owner could have been acquired either by Zacarias Ciscar or
his successors in interest, namely, Roque Sanchez and Defendant Andres Gamponia.

The main defense presented in the answer, is that Plaintiff’s right of action has already prescribed by virtue of the possession
of the land by the Defendant and his predecessors in interest for a period of 37 years. This defense was overruled by the court
a quo on the ground that as the land is registered, with a certificate of title in the name of patentee Domingo Mejia, title thereto
may not be acquired by the Defendant and his predecessors in interest against said registered owner. This ruling is evidently
based on Section 46 of the Land Registration Act, which provides that “no title to registered land in derogation to that of the
registered owner shall be acquired by prescription or adverse possession.

Upon a careful consideration of the facts and circumstances, we are constrained to find, however, that while no legal defense
to the action lies, an equitable one lies in favor of the Defendant and that is, the equitable defense of laches. No hold that the
defense of prescription or adverse possession in derogation of the title of the registered owner Domingo Mejia does not lie,
but that of the equitable defense of laches. Otherwise, stated, we hold that while Defendant may not be considered as having
acquired title by virtue of his and his predecessors’ long continued possession for 37 years, the original owner’s right to recover
back the possession of the property and the title thereto from the Defendant has, by the long period of 37 years and by
patentee’s inaction and neglect, been converted into a stale demand.

In Go Chi Gun, et al., vs. Co Cho, et al., (96 Phil., 622) we held that the equitable defense of laches requires four
elements:chanroblesvirtuallawlibrary (1) conduct on the part of the Defendant, or of one under whom he claims, giving rise to
the situation of which complaint is made and for which the complaint seeks a remedy; chan roblesvirtualawlibrary(2) delay in
asserting the complainant’s rights, the complainant having had knowledge or notice, of the Defendant’s conduct and having
been afforded an opportunity to institute a suit, (3) lack of knowledge or notice on the part of the Defendant that the complainant
would assert the right on which he bases his suit; chan roblesvirtualawlibraryand (4) injury or prejudice to the Defendant in the
event relief is accorded to the complainant, or the suit is not held to be barred.

All the four elements mentioned above are present in the case at bar. The first element is present because on March 24, 1916
Domingo Mejia sold the land which was covered by a free patent title dated March 13, 1916 and said sale or conveyance was
made in violation of Section 35 of the Public Land Act. The second element is also present because from the date of the sale
on March 24, 1916 the patentee and vendor Domingo Mejia could have instituted the action to annul the conveyance and
obtain back the possession and ownership of the land, but notwithstanding the apparent invalidity of the sale, neither patentee
nor his successors in interest, his brother, or the latter’s daughter, Plaintiff herein, who should have known of the invalidity of
the sale because it is a matter of law and had all the opportunity to institute an action for the annulment of the sale, instituted
no suit to annul the sale or to recover the land for a period of 37 years. Again the Defendant and his predecessors in interest,
the original vendee and purchaser Zacarias Ciscar, as well as vendee’s successors in interest, Roque Sanchez, and later,
Andres Gamponia, never expected or believed that the original patentee or his successors in interest would bring an action to
annul the sale. These circumstances constitute the third element of laches. The fourth element is also present, not only
because Zacarias Ciscar paid for the land but this same land was divided among the heirs of Zacarias Ciscar in the
proceedings for the settlement of his estate (Civil Case No. 301 of the Court of First Instance of Nueva Vizcaya) and Roque
Sanchez, to whom the land was adjudicated, sold the property for P800 to the present Defendant Andres Gamponia. All of
these transfer from Zacarias Ciscar to his heirs, to Roque Sanchez and to Defendant Andres Gamponia, acts which covered
a period of 37 years, would all have to be undone and the respective rights and obligations of the parties affected adjusted,
unless the defense is sustained.

It is to be noted that all the above complications would never had been occasioned had the original patentee and his
successors in interest not slept on their rights for more than a generation. Add to this the fact that the original conveyance
made by the patentee is not absolutely null and void. The prohibition against the sale of free patents is for a period of seven
years (Section 35, Act No. 926); chan roblesvirtualawlibraryafter that period of time a patentee would be free to dispose of the
land. Within seven years from the conveyance the original patentee could have brought an action to recover back his property.
Since nothing of this sort was done by him, it was certainly natural for the purchase to have assumed that the original patentee
gave up his right to recover back the property and acquiesced in vendee’s right and title. The successor in interest of the
original purchaser must also have believed in good faith that the patentee and his successors in interest were reconciled to
the idea of allowing the property to stay in the hands of the successors in interest. By this inaction for a period of 37 years to
the consequent prejudice that annulment of the original sale would entail upon so many successive owners, the equitable
principle now stands up as a bar.
“The reason upon which the rule is based is not alone the lapse of time during which the neglect to enforce the right has
existed, but the changes of condition which may have arisen during the period in which there has been neglect. In other words,
where a court of equity finds that the position of the parties has to change that equitable relief cannot be afforded without doing
injustice, or that the intervening rights of third persons may be destroyed or seriously impaired, it will not exert its equitable
powers in order to save one from the consequences of his own neglect.” (Penn Mutual Life Inc. Co., et al., vs. City of Austin
et al., U. S. 962.)

In effect, the principle is one of estoppel because it prevents people who have slept on their rights from prejudicing the rights
of third parties who have placed reliance on the inaction of the original patentee and his successors in interest.

The equitable defense of laches has been held to exist in this jurisdiction for periods less than the period in the case at bar.
Thus in the case of Gonzales vs. Director of Lands, 52 Phil. 895, it was held in a cadastral case that the owner of a lot who
failed to appear in the proceedings, as a result of which his land was declared public property, who brings an action 10 years
later, is guilty of laches and inexcusable negligence and his action under Section 513 of the Code of Civil Procedure can no
longer be maintained. In another case where the Plaintiff loaned money to a couple and when the wife died and the conjugal
properties divided between her heirs and her husband, the vendor did not present his claim against the estate and only did so
four years later against the widower, it was held that the lender was guilty of laches in so far as the estate of the deceased
spouse is concerned because it would be inequitable and unjust to permit him to revive any claims which he may have had,
which claims he did not present during the distribution of the estate of the deceased wife. (Yaptico vs. Marina Yulo, et al., 57
Phil., 818). In a third case (Kambal vs. Director of Lands, 62 Phil., 293), cadastral proceedings for compulsory registration of
certain parcels of land in Cotabato were instituted. These proceedings included two lands belonging to the Petitioner. Petitioner
failed to claim said lands in said proceedings and in 1917 the titles to the lands of the Petitioner were cancelled. Petitioner
alleges that he came to know by accident of the cancellation of his titles in the year 1933 or 1935. It was held that because of
the lapse of 16 years from the date the decision was rendered in the said registration case to the filing of the petition, no relief
can be granted the Petitioner as he has been guilty of laches. In the three cases decided previously by this Court, the periods
of inaction were from 10 to 16 years. In the case at bar it was a full period of 37 years.

The judgment appealed from is hereby reversed and one is hereby entered absolving the Defendant from the action. Without
costs.

G.R. No. 77744

DAVIDE, JR., J.:

In this petition for review on certiorari under Rule 45 of the Rules of Court filed on 27 March 1987, petitioner urges this Court
to review and reverse the decision dated 22 July 1986 of the Court of Appeals (Sixteenth Division) in A.C.-G.R. CV No.
05100[1] affirming the 29 October 1984 decision of the Regional Trial Court of Negros Occidental, Branch LV, in Civil Case
No. 615,[2] the dispositive portion of which reads:

"WHEREFORE, premises considered, the Court hereby renders judgment in favor of the defendants and against the herein
plaintiff, and consequently, this case should be, as it is, hereby DISMISSED. With costs.

On the counter-claim, the plaintiff is directed to pay the defendants the sum of Ten Thousand Pesos (P10,000.00) as attorney's
fees.

SO ORDERED."

The original complaint in Civil Case No. 615, an action instituted by petitioner against private respondents for annulment of
title and reconveyance with damages involving more than fifteen (15) hectares designated as Lot No. 737 of the Himamaylan
Cadastre located at Himamaylan, Negros Occidental, was filed on 23 October 1972. A third amended complaint, impleading
petitioner's mother, Sinforosa Flores, as co-plaintiff, was filed on 8 February 1974.[3] It is alleged therein that Lot No. 737 was
originally decreed and registered in the names of petitioner Teodora Claverias and her brother Federico. The latter died
unmarried and without any issue, leaving Sinforosa as his only heir. They also alleged that the owner's copy of the original
certificate of title was lost during the last world war. However, after the war, private respondent Adoracion Quingco, taking
advantage of plaintiffs' illiteracy, had the original title reconstructed in the name of petitioner Claverias and her deceased
brother. Thereafter, through fraud, Quingco had the said title cancelled and obtained a new certificate in her name.
Subsequently, in connivance with private respondent Tongson, she executed a fictitious and simulated deed of sale of Lot No.
737 in favor of the latter and, by virtue thereof, a new transfer certificate of title was issued in Tongson's name. Subsequently,
through force and intimidation, Tongson succeeded in evicting petitioner and her mother from the premises which they had
been occupying until then. It was only in 1968, upon verification with the Office of the Register of Deeds of Bacolod City, that
petitioner learned of these fraudulent transactions.

In their Amended Answer,[4] private respondents alleged, inter alia, that Lot No. 737 was twice sold to their predecessors-in-
interest by Sinforosa. The first sale, which was with the petitioner's conformity, was consummated on 22 January 1922 for a
consideration of P300.00. The second sale was executed by Sinforosa and the petitioner on 30 June 1930 for P200.00. In the
settlement of the estate of Eustaquio Quingco, the lot was adjudicated to respondent Adoracion Quingco who later sold it to
respondent Tongson; the latter had a new transfer certificate of title issued in his name. In 1958, Tongson filed an ejectment
case against petitioner; she lost this case. Her subsequent appeal to the then Court of First Instance of Negros Occidental
was dismissed on 12 September 1967 for her failure to appear. During the pendency of the ejectment case, she filed an action
for recovery of ownership with the Court of First Instance of Negros Occidental which, however, was likewise dismissed on 29
October 1959 for failure to prosecute.

Sinforosa died in 1980 during the pendency of Civil Case No. 615.

In its decision dated 29 October 1984, the trial court overruled the theory of fraud relied upon by petitioner on the ground that
the facts established do not support it; it then held that: (a) the petitioner and her mother had in fact twice sold the property in
question to Venancia Alarcon de Quingco, mother of respondent Adoration Quingco, as evidenced by Exhibits "17" and "18",
(b) petitioner's cause of action had prescribed or is barred by laches, and (c) respondent Tongson is a buyer in good faith,
hence, reconveyance cannot prosper. As to petitioner's claim that Venancia Alarcon was a mere trustee, the trial court ruled
that even granting the existence of an implied trust, the action is likewise barred by prescription. The detailed disquisition of
the trial court on these points reads:

"Be it remembered, however, that there are certain uncontroverted evidence affecting Lot 737 proven by some well-founded
documentary evidence pertinent to and material to these transactions entered into by the parties or their predecessors-in-
interest prior to and subsequent to the issuance of OCT No. RO-7111 (17502) proving:

(1) That OCT No. RO-7111 (17502) was issued on August 6, 1923, in the name of herein plaintiff, Teodora Claverias, and her
brother, Federico Claverias, during their minority;

(2) That Federico Claverias died in his minority and was survived by his mother, Sinforosa Flores, and a sister, Teodora
Claverias;

(3) But, prior of (sic) the issuance of OCT No. RO-7111 (17502), Sinforosa Flores, mother of herein plaintiff, and the plaintiff
herself, Teodora Claverias, executed a deed of absolute sale on January 25, 1922, transferring and conveying the lot in
question (Lot 737) to Venancia Alarcon de Quingco (mother of defendant Adoracion Quingco) for and in consideration of
P300.00; (Exhibit "17")

(4) That after the death of Eustaquio Quingco, husband of Venancia Alarcon de Quingco and father of defendant Adoracion
Quingco, his last will and testament was duly probated before the Court of First Instance of Negros Occidental in his Spec.
Proc. No. 4797 entitled 'Testate Wstate (sic) of the late Eustaquio Quingco,' wherein Lot 737 was included as part of the
testate estate of the deceased, Eustaquio Quingco; (Exhibits "5" and "5-A")

(5) On June 19, 1930, due to the loss of the original deed of sale dated January 25, 1922, another deed of absolute sale was
executed by Sinforosa Flores and her daughter, Teodora Claverias, and this time, with the marital consent of the latter's
spouse, Vicente Lomaques, involving the same property, subject matter of Exhibit "17" in favor of the same buyers mentioned
by the original deed of sale. (Exhibit "18")

From the foregoing set of uncontroverted facts, the Court has no other recourse but to draw a conclusion that as early as 1922
and 1930, Sinforosa Flores and the plaintiff, Teodora Claverias, disposes (sic) of whatever interests or rights they may have
had on Lot 737, absolutely and forever, unto to (sic) the predecessors-in-interest of the defendants herein. As matters stand,
the deed of sale was executed not only once but twice. Hence, the plaintiff relinguished (sic) her rights over the property as
early as 1922 and again in 1930, evidenced by unassailable documents.

It has been seen by the Court that in both instances the execution of the documents of sale (Exhibits "17" and "18") came into
being with the active participation and intervention of duly commissioned notaries public. Retired Judge Vidal Vallejera, 86
years old, testified in Court during its session on February 7, 1984, as to the genuineness and due execution of the document
of sale executed by Sinforosa Flores, her daughter, Teodora Claverias, with the marital consent of the latter's spouse, Vicente
Lomaques, on June 19, 1930. (Exhibit "18").

In the absence of any other evidence worthy of trust, the ancient documents marked as Exhibits "17" and "18" appear as the
best memorial of the transactions affecting Lot 737. The Court is bereft of any Justifiable (sic) or cogent reason to disturb its
conclusion that in truth, the plaintiff disposed of her rights and interests over Lot 737 several decades ago as proved by valid
and authentic documents of transfer.

The ownership of Adoration Quingco and her predecessors-in-interest dates back to the year 1922 when the plaintiff and her
mother sold and conveyed Lot 737 in favor of Venancia Alarcon (Exhibit "17"), which conveyance was confirmed on June 19,
1930, (Exhibit "18"). From that point in time until 1958, plaintiff Teodora Claverias exerted no efforts to seek for (sic) the
annulment of several documents included in the proceedings (Spec. Proc. No. 4797). It was only month (sic) later on, April
26, 1959, when the plaintiff made attempt (sic) to assail the validity of the transactions had between the predecessors-in--
interest of the defendants and the defendants themselves, and the plaintiff and her mother. These are transactions that
transpired several decades ago, giving birth to several documents considered as ancient, stamped with a 'tag' of
trustworthiness.
So that, even if it is assumed arguendum (sic), that indeed, fraud attended the consummation of these transactions involving
Lot 737, the attempt by the plaintiff in this instant case to nullify these transactions can no longer proper (sic). Because upon
the facts proven, it is not difficult for this Court to conclude that the plaintiff's cause of action, assuming that she ever had one,
had prescribed at the time she filed a suit on (sic) April 29, 1959, (Case No. 5295, CFI?Negros Occidental). And better still,
the case under consideration because of laches, the plaintiff may not now be allowed to assail the validity of the transactions
affecting Lot 737, much less the validity of the judicial proceedings in Spec. Proc. No. 4797, entitled 'Testate Estate of
Eustaquio Quingco' which resulted in the adjudication of the property in question to the defendant, Adoracion Quingco.
(Godinez vs. Pelaez, L-18491, February 27, 1971).

Moreover, it has been also noted that on March 3, 1958, defendant Adoracion Quingco, for and in consideration of the sum of
Two Thousand Pesos (P2,000.00), sold and conveyed Lot 737 by way of an absolute deed of sale to her co-defendant Ernesto
Tongson. As a result of the deed of sale, TCT No. T-23353 was issued by the Register of Deeds of Negros Occidental in the
name of Ernesto Tongson (Exhibit "3", also Exhibit "C"), thereby cancelling TCT No. T-23275 in the name of co--defendant
Adoracion Quingco. (Exhibits "2" and "2-A").

As matters stand now, Ernesto Tongson is the absolute owner of Lot 737. Except for a series of real estate mortgages executed
by Ernesto Tongson in favor of the Philippine National Bank, no other valid lien or encumbrances exists (sic) at the back of
his title.

Having been obtained by way of a deed of absolute sale Lot 737 from Adoracion Quingco whose title was absolutely free from
any flaw or defect, Ernesto Tongson, being a buyer of said Lot 737 for value and in good faith and without prior notice of any
right whatsoever than what the defendant, Adoracion Quingco, had over Lot 737, deserves the full protection of the law.
(Godinez vs. Pelaez, L-18491, February 27, 1971). Said defendant then acquired title to Lot 737 as an innocent purchaser for
value as early as 1958 and such being the situation, the rights and interests of defendant Ernesto Tongson over the lot in
question must be set at rest since reconveyance as desired by the plaintiff can no longer prosper in this case, the land having
passed on to an innocent purchaser for value. (Lazia vs. Donting, L-55911-R, February 25, 1977)."[5]

In her appeal from this adverse judgment to the respondent Court of Appeals, docketed as A.C.-G.R. CV No. 05100, petitioner,
in her Brief, assigned the following errors:

"1. THE LOWER COURT ERRED IN HOLDING THAT LOT NO. 737 OF HIMAMAYLAN CADASTRE SUBJECT MATTER
OF THIS CASE WAS PURCHASED BY THE GRANDPARENTS OF THE APPELLEES SPOUSES EUSTAQUIO QUINGCO
AND VENANCIA ALARCON FROM THE APPELLANTS (sic) SAID FINDING OF THE COURT NOT SUPPORTED WITH
EVIDENCE (sic) THEREFORE CONTRARY TO LAW;

2. THE LOWER COURT ALSO ERRED IN HOLDING THAT SINCE LOT NO. 737 WAS INCLUDED IN THE TESTAMENT
OF THE LATE EUSTAQUIO QUINGCO, FATHER OF THE APPELLEE ADORACION QUINGCO, WHICH WAS PROBATED
BY THE PROBATE COURT AND THE (sic) PROPERTY ADJUDICATED TO ADORACION QUINGCO AS HER SHARE A
(sic) PROOF THAT THE PROPERTY BELONG (sic) TO THE ESTATE OF EUSTAQUIO QUINGCO SUCH (sic) FINDING OF
THE COURT ALSO CONTRARY TO LAW;

3. THE LOWER COURT ALSO ERRED IN HOLDING THAT APPELLEE ERNESTO TONGSON A BUYER IN GOOD FAITH
OF THE PROPERTY IN QUESTION, BE (sic) PROTECTED BY LAW SAID (sic) FINDING OF THE COURT ALSO
CONTRARY TO THE EVIDENCE ESTABLISHED (sic) THEREFORE CONTRARY TO LAW;

4. THE LOWER COURT ALSO ERRED IN HOLDING THAT THE APPELLANTS' CAUSE OF ACTION (sic) TO ANNUL THE
TITLE OF APPELLEE, ERNESTO TONGSON, AND TO RECOVER POSSESSION OF THE PROPERTY BARRED BY
PRESCRIPTION OR LACHES SAID FINDING OF THE COURT ALSO (sic) CONTRARY TO LAW."

In its decision of 22 July 1986, the respondent Court sustained the trial court and affirmed its decision. It held:

"We agree, Against the notarized documents of absolute sale, Exhibits "17" and "18", evidencing Teodora Claverias' absolute
alienation of Lot 737, her mere denials to the contrary are completely unavailing. The rule is settled.

'A notarial document, guaranteed by public attestation in accordance with the law, must be sustained in full force and effect
so long as he who impugns it shall not have presented strong, complete, and conclusive proof of its falsity or nullity on account
of some flaw or defect provided by law.' (Robinson vs. Villafuerte, 18 Phil. 171).

And to further accentuate the bankruptcy of the plaintiff's position, the defendants-appellees even presented the notary public
who notarized one of the deeds of sale to testify to its validity.

'The testimony of a notary public, who is at the same time a lawyer, must be given more credence to (sic) the testimony of a
party denying a contract acknowledged before the same notary public.' (Cabahug vs. Cinco, CA-G.R. No. 6042, February 3,
1941)

Even granting for the sake of argument the veracity of Teodora Claverias' claim of fraud -- that she never executed those
deeds of sale and her mother merely entrusted the lot to Venancia Alarcon Quingco in 1922 -- -then, still, her claim should be
barred on the ground of prescription. Whether express or implied, this alleged trust was openly repudiated in 1937 when Lot
737 was included as part of the late Eustaquio Quingco's estate in Spec. Proc. No. 4797, wherein the probate court duly
approved the project of partition adjudicating to appellee Adoracion Quingco the ownership of this lot.

The record further discloses this action of the probate court was not the only judicial rebuff suffered by the appellants in relation
to the land subject of herein case. Sometime in 1958, defendant-appellee Ernesto Tongson instituted an ejectment case
against Teodora Claverias and her husband (Civil Case 268) before the Municipal Court of Himamaylan, Negros Occidental.
The court found for the plaintiff and ordered Teodora Claverias ejected from the land. On appeal to the then Court of First
Instance of Negros Occidental, her appeal therein was dismissed on September 12, 1967 'for lack of interest and for failure of
the appellants to appear.'

Again, in her first attempt to annul the defendants-appellee's title (filed on April 29, 1959), the case was dismissed by the lower
court for repeated failure of Teodora Claverias and her husband to appear and prosecute the action.

The repeated wavering of the herein appellants in those previous cases to prosecute their claim of ownership raises serious
doubts in Our minds as to the merits of their claim, else why the marked reluctance to press matters to a conclusion until (sic)
now? Be that as it may, considering the legal documents of transfer and ownership possession by the appellees over the land
in dispute, the challenged (sic) posed by the appellants must necessarily be rejected for lack of merit."[6]

The motion for reconsideration of the foregoing decision having been denied for lack of merit in the 17 February 1987
Resolution of the Court of Appeals,[7] petitioner took this present recourse, submitting the following assignment of errors:

"I

RESPONDENT COURT ERRED IN ADMITTING EXHS. "17" AND "18" AS EVIDENCE FOR THE PRIVATE RESPONDENTS
DESPITE OBJECTION INTERPOSED BY THE PETITIONERS IN UTTER DISREGARD OF THE RULE OF LAW;

II

RESPONDENT COURT ERRED BY NOT FINDING THAT EXHS. "17" AND "18" BEING MERELY TRUE COPIES OF THE
ALLEGED ORIGINAL UNDER THE LAW THE DOCUMENTS ARE NOT ADMISSIBLE AS EVIDENCE;

III

RESPONDENT COURT ERRED BY NOT FINDING THAT PRIVATE RESPONDENTS (sic) GUILTY OF
MISREPRESENTATION BY PRESENTING AND OFFERING AS EVIDENCE IN COURT EXHS. "17" AND "18" AND MADE
IT (sic) OF RECORD TO BE A CERTIFIED COPIES (sic) WHEN IN TRUTH AND IN FACT THE DOCUMENTS ARE MERELY
TRUE COPIES;

IV

RESPONDENT COURT ALSO ERRED IN FINDING THAT THE ACTION FILED BY THE PETITIONERS TO RECOVER THE
POSSESSION OF THE PROPERTY BARRED (sic) BY PRESCRIPTION."[8]

We required the respondents to comment on the petition.[9] After private respondents separately filed their Comments and
the petitioner submitted a Reply, an Amended Reply and a Supplemental Reply, this Court gave due course to the petition
and required the parties to submit their respective Briefs within thirty (30) days from notice.[10]

A careful scrutiny of the pleadings reveals that contrary to private respondents' bold assertions that the issues in this case are
factual and hence the findings of fact of the respondent Court are conclusive, legal issues of transcendental importance are
also involved. Additionally, the findings upon which some issues are founded are not in fact supported by the evidence, are
based on a misapprehension of facts, or the inferences made therefrom are manifestly mistaken. Accordingly, this case falls
within some of the exceptions to the rule on conclusiveness of findings of fact of the respondent Court.[11]

The basic issues raised in this case involve:

(a) the correctness of the admission of Exhibits "17" and "18";

(b) granting that Exhibits "17" and "18" were properly admitted, the validity of the alleged sales of the property by Sinforosa
Flores in 1922 (Exh. "17") and 1930 (Exh. "18");

(c) the effect of the "conforme" of petitioner to the deed of sale, marked as Exhibit "17"; and

(d) the correctness of the conclusion of the trial court that: (1) private respondent Tongson is a buyer in good faith and (2)
petitioner is barred by prescription and laches.

1. Exhibit "17" is a copy of a deed of sale executed on 25 January 1922 by Sinforosa Flores and containing petitioner's
conformity thereto,[12] while Exhibit "18" is a certification issued by Antonio Yacapin, Director of the Bureau of Records and
Archives, Manila, dated 24 October 1958, and attesting to the correctness of an entry appearing on the notarial register of
notary public Vidal P. Vallejera which makes reference to a deed of purchase and sale of Lot No. 737 of the Himamaylan
Cadastre executed by Sinforosa Flores and Teodora Claverias in favor of Sixto Vallejera[13] for and in consideration of
P200.00.

While petitioner insists that Exhibit "17" is merely a true copy, private respondents claim that it is a certified true copy. Both
the trial and respondent courts, however, did not specifically rule on the objection. They admitted and treated it as if it was the
original document.

Both courts committed a serious error in this respect. Exhibit "17" is not the best evidence and should have been rejected
because the grounds for non-production of the original deed of sale under Section 3, in relation to Section 5, Rule 130[14] of
the Rules of Court, were not duly established. Said sections provide:

"SEC. 3. Original document must be produced; exceptions. - When the subject of inquiry is the contents of a document, no
evidence shall be admissible other than the original document itself, except in the following cases:

(a) When the original has been lost or destroyed, or cannot be produced in court, without bad faith on the part of the offeror;

(b) When the original is in the custody or under the control of the party against whom the evidence is offered, and the latter
fails to produce it after reasonable notice;

c) When the original consists of numerous accounts or other documents which cannot be examined in court without great
loss of time and the fact sought to be established from them is only the general result of the whole; and

(d) When the original is a public record in the custody of a public officer or is recorded in a public office.

xxx

SEC. 5. When original document is unavailable. - When the original document has been lost or destroyed, or cannot be
produced in court, the offeror, upon proof of its execution or existence and the cause of its unavailability without bad faith on
his part, may prove its contents by a copy, or by a recital of its contents in some authentic document, or by the testimony of
witnesses in the order stated."

Private respondents failed to present the original deed of sale and do not claim that they did. No justification has been adduced
to show why they could not produce the original or the duplicate originals thereof. Indeed, serious doubt surrounds the
existence of said deed of sale. Moreover, there is no showing that the same had been registered. The reconstituted Original
Certificate of Title No. RO-7111 (17502)[15] does not carry any entry regarding the said sale.

On the other hand, Exhibit "18" is not a deed of sale. It is but a certification of an entry in the notarial register of notary public
Vallejera. The certification states that "no copy of the above-mentioned document has been received by this office for file." It
was, therefore, erroneous for both the trial and the respondent appellate courts to declare that it is a deed of sale. While the
certification may be taken as evidence that sometime in the past the notary public did make that entry in his notarial book, the
entry is neither a substitute for the document, nor the best evidence thereof. In this regard, private respondents again failed to
show why they could not produce the best evidence. The testimony of the notary public that the document was acknowledged
before him was insufficient to prove the contents thereof. We also note that aside from the fact that this so-called sale was not
registered, no entry relating thereto appears in the reconstituted Original Certificate of Title.

This error of the trial court was compounded by its sweeping pronouncement that the deeds of sale of 25 January 1922 and
19 June 1930 are "ancient documents" and "appear as the best memorial of the transactions affecting Lot 737," and so,
therefore, "x x x [t]he Court is bereft of any justifiable or cogent reason to disturb its conclusion that in truth, the plaintiff
disposed of her rights and interest over Lot 737 several decades ago as proved by valid and authentic documents of transfer."

Considering the failure of private respondents to produce the original of the alleged deeds of sale, this Court cannot accept
the said pronouncement. An ancient document, under the Rules on Evidence, refers to a private document which is more than
thirty (30) years old, produced from a custody in which it would naturally be found if genuine, and is unblemished by alterations
or circumstances of suspicion.[16] In the instant case, private respondents themselves never introduced and offered in
evidence Exhibits "17" and "18" as private documents. On the contrary, they insisted that the same are public documents.
Besides, even if they could be considered private documents, private respondents still failed to prove the two (2) essential
requisites before an ancient document may be admitted without proof of its execution or authenticity, to wit: (a) it is produced
from a custody in which it would naturally be found if genuine and (b) it is unblemished by any alterations or circumstances of
suspicion. Both requisites presuppose the production of the original document, something which private respondents failed to
do.

2. Even granting for the sake of argument that Exhibit "17" was correctly admitted and truly reflects what it purports to show,
the "sale" evidenced therein by Sinforosa Flores of Lot No. 737 is null and void.

Lot No. 737 originally belonged to Sinforosa's husband, Cornelio Claverias, who died intestate. Cornelio's two (2) children,
petitioner herein and Federico, inherited the property pursuant to Articles 930 and 932 of the Civil Code of Spain, the governing
law at that time, subject, however, to Sinforosa's right of usufruct over one-third (1/3) of the property pursuant to Articles 834
and 835 of the same Code. These articles provide:

"ARTICLE 930. Succession pertains, in the first place, to the descending direct line.
xxx

ARTICLE 932. The children of the deceased shall always inherit from him in their own right, dividing the inheritance in equal
shares.

xxx

ARTICLE 834. A widower or widow who, on the death of his or her spouse, is not divorced, or should be so by the fault of the
deceased, shall be entitled to a portion in usufruct equal to that corresponding by way of legitime to each of the legitimate
children or descendants who have not received any betterment.

If only one legitimate child or descendant survives, the widower or widow shall have the usufruct of the third available for
betterment, such child or descendant to have the naked ownership until, on the death of the surviving spouse, the whole title
is merged in him.

xxx

ARTICLE 835. The hereditary portion allotted in usufruct to the widowed spouse must be taken from the third of the estate
available for the betterment of the children."[17]

Specifically, this usufructuary right covered one-sixth (1/6) of the one-half (1/2) share of petitioner and one-sixth (1/6) of the
other half pertaining to Federico.

Conformably with these provisions, the Original Certificate of Title (OCT) No. 17502, reconstituted as OCT No. RO-7111
(17502), was issued on 10 July 1923 in the name of "TEODORA CLAVERIAS and FEDERICO CLAVERIAS", and made
subject to the liens therein stated, the second of which reads:

"x x x (b) that the land above-described is subject to the usufructuary right of Sinforosa Flores during her natural life."[18]

Sinforosa Flores could not have, therefore, sold or encumbered the lot. She could have disposed of or encumbered only her
usufructuary right thereon. However, when Federico Claverias, a co-owner of the property, together with the petitioner, died
without any issue, Sinforosa inherited his one-half (1/2) share of the lot pursuant to Articles 935 and 936 of the Civil Code of
Spain, which read:

"ARTICLE 935. In default of legitimate children and descendants of the deceased, his ascendants shall inherit from him, to
the exclusion of collaterals.

ARTICLE 936. The father and mother, if living, shall inherit share and share alike.

Should one only of them survive, he or she shall succeed to the entire estate of the child."[19]

In addition to her ownership of one-half (1/2) of the property, Sinforosa retained her usufructuary right over one-sixth (1/6) of
the portion pertaining to herein petitioner.

There is no competent evidence as to the date of death of Federico. It can, however, be safely presumed that he died after
the issuance of OCT No. 17502 on 10 July 1923 because his name is still mentioned therein as a co-owner.

Consequently, if indeed a deed of sale (Exh. "17") was in fact executed on 25 January 1922, Sinforosa could sell only her
usufructuary right over one-third (1/3) of the entire lot. The sale was null and void in respect to the lot because she was not its
owner. Assuming for the sake of argument that another deed of sale was executed on 19 June 1930, as indicated by Exhibit
"18", Sinforosa could have only validly sold the one-half (1/2) portion of Lot No. 737 which she inherited from Federico and
her usufructuary right over one-sixth (1/6) of the share of petitioner, but not the latter's share. Nevertheless, if indeed Sinforosa
signed the deed of sale dated 19 June 1930, this Court would find it difficult to accept any explanation as to why the
consideration indicated therein for the entire lot was merely P200.00 when Sinforosa's usufructuary right was sold eight (8)
years earlier (Exh. "17") for P300.00. It cannot be said that this P200.00 was merely an additional sum because the vendee
in the second sale is Sixto Vallejera and not Venancia Alarcon, the vendee in the first sale. There is absolutely no competent
evidence to prove that, as again erroneously ruled by the trial court, Sixto purchased the property for Venancia's or her
husband's estate.

3. No further ratiocination is needed to show the grave error committed by both the trial court and the respondent Court when
they concluded that petitioner herein also sold her rights over the lot in the deed of sale of 25 January 1922, or that it is the
"first" deed of sale she executed. Exhibit "17" itself, the very document relied upon by said courts, does not show that petitioner
is one of the vendors. It is only Sinforosa Flores who is shown to be the vendor. Thus, it states:

"Yo, Sinforosa Flores, viuda, mayor de edad y vecina del Municipio de Himamaylan, Negros Occidental, L.F., hago constar
que, en consideracion a la cantidad de TRES CIENTOS PESOS, moneda filipina, que he recibido antes de ahora a mi entera
satisfaction de la Sra. Venancia Alarcon de Quingco, x x x VENDO, CEDO Y TRANSPASO EN PERPETUA ENAJENACION,
x x x."[20]

The petitioner's participation appears to be limited to the mere affixing of her signature below the word CONFORMES. This
"conforme" could mean nothing more than her conformity to the sale of the usufructuary rights of Sinforosa. It cannot be legally
construed as petitioner's sale of her rights in the lot, or of her conformity to the sale thereof by Sinforosa for the latter is not its
owner; the conforme did not operate to vest on Sinforosa ownership over the lot since it can by no means be considered a
mode of acquiring ownership.

II

Contrary to the findings of the courts below, private respondent Tongson is not a buyer in good faith. He bought the property
on 3 March 1958. Good faith and the exercise of due diligence required him to demand from the vendor the production of the
certificate of title. The vendor was then in possession of the owner's duplicate copy of OCT No. 17502 since it was not yet
reconstituted. The reconstituted title was issued only on 4 March 1958.[21] Hence, at the time Tongson allegedly purchased
the property, he knew, or ought to have known, that his vendor was not the registered owner of the property.

Furthermore, the entries in the reconstituted Original Certificate of Title (Exh. "A") also show that it was only on 31 March 1958
that it was cancelled upon the order of the court and a new one, Transfer Certificate of Title No. T-23275, was issued in the
name of private respondent Adoracion Quingco.

The foregoing notwithstanding, laches had definitely foreclosed the petitioner's right to recover the property. In this regard, We
are in full agreement with the trial court.

Although petitioner was the owner of one-half (1/2) of Lot No. 737, she never possessed the same. She attempted to enter
into possession of a portion thereof in 1958, but was rebuffed by an action for ejectment filed by private respondent Tongson,
who won said case. She lost in her appeal filed thereafter; during the pendency of the same, a writ of execution was issued
against her in 1964.

Petitioner, by her own inaction or through her own fault, likewise lost in her bid in 1959 to secure the annulment of the titles
issued in the names of private respondents Quingco and Tongson. The case she filed for that purpose was dismissed on 29
October 1959. Thus, even if Tongson may not be considered a purchaser in good faith, the adverse possession of his
predecessor-in-interest from 1922 to 1958, totalling 36 years, benefited him for purposes of applying the principle of laches.
Added to this is petitioner's failure to take any further action to recover the property from the dismissal of the annulment case
in 1959 until 23 October 1972, when she filed the original complaint in Civil Case No. 615. Verily, she had slept too long.

Prescription does not operate against her as she is the registered co-owner of Lot No. 737. Per Section 46 of the Land
Registration Act, no title to registered land in derogation to that of the registered owner shall be acquired by prescription or
adverse possession. Laches does. In Mejia de Lucas vs. Gamponia,[22] this Court ruled that possession for 37 years by a
defendant and inaction and neglect by the owner of a registered land calls for the application of the equitable defense of
laches.

All the elements of laches, which this Court prescribed in Go Chi Gun, et al. vs. Co Cho, et al.[23] and reiterated in the Mejia
case and in Miguel vs. Catalino,[24] to wit:

"(1) conduct on the part of the defendant, or of one under whom he claims, giving rise to the situation of which complaint is
made and for which the complaint seeks a remedy;

(2) delay in asserting the complainant's rights, the complainant having had knowledge or notice, of the defendant's conduct
and having been afforded an opportunity to institute a suit;

(3) lack of knowledge or notice on the part of the defendant that the complainant would assert the right on which he bases his
suit; and

(4) injury or prejudice to the defendant in the event relief is accorded to the complainant, or the suit is not held to be barred."

are present in this case.

In Heirs of Batiog Lacamen vs. Heirs of Laruan,[25] this Court defines laches and distinguishes it from prescription, thus:

"'Laches' has been defined as 'such neglect or omission to assert a right, taken in conjunction with lapse of time and other
circumstances causing prejudice to an adverse party, as will operate as a bar in equity.' It is a delay in the assertion of a right
'which works disadvantage to another' because of the 'inequity founded on some change in the condition or relations of the
property or parties.' It is based on public policy which, for the peace of society, ordains that relief will be denied to a stale
demand which otherwise could be a valid claim. It is different from and applies independently of prescription. While prescription
is concerned with the fact of delay, laches is concerned with the effect of delay. Prescription is concerned with the effect of
delay. Prescription is a matter of time; laches is principally a question of inequity of permitting a claim to be enforced, this
inequity being founded on some change in the condition of the property or the relation of the parties. Prescription is statutory;
laches is not. Laches applies in equity, whereas prescription applies at law. Prescription is based on a fixed time, laches is
not." (footnotes are omitted)

However, both the trial court and the respondent Court correctly applied prescription insofar as petitioner's claim of implied
trust is concerned. It is now settled that an action based on an implied or constructive trust prescribes in ten (10) years,[26]
reckoned from the date of the repudiation of the trust.[27]
While We commiserate with the petitioner and are moved by her plea, We must, nevertheless, remain faithful to Our
pronouncement in Miguel vs. Catalino:

"x x x Courts can not look with favor at parties who, by their silence, delay and inaction, knowingly induce another to spend
time, effort and expense in cultivating the land, paying taxes and making improvements thereon for 30 long years, only to
spring from ambush and claim title when the possessor's efforts and the rise of land values offer an opportunity to make easy
profit at his expense."

Vigilantibus, non dormientibus, jura subveniunt. Laws must come to the assistance of the vigilant, not of the sleepy.

WHEREFORE, due to the equitable principle of laches, the affirmance by the respondent Court in its decision of 22 July 1986
in A.C.-G.R. CV No. 05100 of the decision of the trial court in Civil Case No. 615 is hereby SUSTAINED.

No pronouncement as to costs.

IT IS SO ORDERED.

G.R. No. L-28975 February 27, 1976

VENANCIA B. MAGAY, assisted by her husband, VICTORIANO R. MAGAY, plaintiff-appellee,

vs.EUGENIO L. ESTIANDAN, defendant-appellant.

Valeriano V. Santos for appellant. Inigo R. Pena for appellee.

ANTONIO, J:

Appeal from the judgment of the Court of First Instance of Palawan in an accion publiciana filed by plaintiff-appellee Venancia
B. Magay, assisted by her husband, Victoriano R. Magay, against the defendant-appellant Eugenio L. Estiandan in Civil Case
No. 518, finding plaintiff-appellee as the registered owner of the land in question under Transfer Certificate of Title No. 2004,
ordering defendant-appellant to vacate the property within fifteen (15) days after the decision has become final, and to pay
plaintiff-appellee the amount of Ten Pesos (P10.00) monthly as rentals on the land from October 1965 until he vacates the
premises, and to pay the amount of Six Hundred Pesos (P600.00) by way of attorney's fees and the costs of the suit.

The facts of the case as found by the trial court are as follows:

During the hearing of this case, the Court gathered from the evidence of the plaintiff, that the plaintiff Venancia B. Magay
bought the land. in question. from her mother-in-law, Soledad de los Reyes. The land was formerly titled in the name of
Soledad de los Reyes under Original Certificate of Title No. E-2020 which was subsequently cancelled and transferred in the
name of the herein plaintiff under Transfer Certificate of Title No. 2004, Exhibit 'A'. The area bought by the plaintiff from
Soledad de los Reyes was resurveyed, Exhibit Al Exhibit 'A-1-a' is lot No. 1 of Exhibit Al which is the land in question: The
defendant has constructed two houses in the land in question: Exhibit 'A-1-a-1' which is an old house and Exhibit 'A-1-a-2'
which is a new house. Before this property was old by Soledad de los Reyes to the plaintiff, the former sent two letters, Exhibits
'C' and 'D' to the defendant telling him to vacate the premises. After the plaintiff has acquired the property in question, she
sent other letters to the defendant advising him to vacate the premises, Exhibits 'E' and F The plaintiff has declared the property
in question for purposes of taxation, Exhibit 'G' and has paid the real estate taxes, Exhibit 'H'. Due to the refusal of the
defendant to vacate the premises in question, the plaintiff was obliged to hire the services of a lawyer and spent P600.00 for
attorney's fees.

On the other hand, the defendant testified that he has filed a miscellaneous sales application, Exhibit '6' over the land in
question. said application, according to him, is now pending in the Bureau of Lands and it has neither-been rejected nor
approved. The defendant bases his application on the decision rendered by Judge Bartolome Revilla in the case of El Gobierno
de las Islas Filipinos contra Antonio Aborot y otros Exhibit '5' adjudicating the land in question in favor of the Government of
the Philippines. Moreover, the defendant questions the validity of the title issued to Soledad de log Reyes, alleging that the
issuance and reconstitution thereof was done under anomalous circumstances.

Appellants brought this case on appeal directly to this Court on the representation that only questions of law are involved. After
a careful analysis of the issues raised, it appears that the principal question to be resolved is whether appellant can question
in this proceedings the validity of Original Certificate No. E-2020 issued to Soledad de los Reyes, now d and of the subsequent
issuance of Transfer Certificate of Title No. 2W4 by the Register of Deeds to plaintiff-appellee as a consequence of the
registration of the deed of sale executed by Soledad de los Reyes in favor of plaintiff-appellee dated June 26, 1963, on the
ground that Original Certificate of Title No. E-2020 was allegedly "fraudulently issued" to the late Soledad de los Reyes in
1948.

It is well-settled that a torrens title cannot be co attacked. The issue on the validity of the title can only in action expressly
instituted for that purpose. 1 Even assuming that the land in question is still part of the public domain, then the appellant is not
the proper party to institute the reversion of the land but it must be the Solicitor General in the name of the Republic of the
Philippines. 2

Finally, We also find no merit in appellant's contention that the lower Court erred in assuming jurisdiction over the case. As
clearly emphasized by Justice Fred Ruiz Castro (now Chief Justice of this Court) in Serrano v. Munoz Hi Motors, Inc.," 3
jurisdiction over the subject matter is determined by the allegations of the complaint, irrespective of whether or not the plaintiff
is entitled to recover upon all or some of the claims asserted therein-a matter that can be resolved only after and as a result
of the trial. Nor may the jurisdiction of the court be made to depend upon the defenses set up in the answer or upon the motion
to dismiss, for, were we to be governed by such rule, the question of jurisdiction could depend almost entirely upon the
defendant." The lower court did not commit any am in declaring that plaintiff-appellee's complaint is actually an accion
publiciana rather than one for unlawful detainer, within the intendment of Section 1, Rule 70 of the procedural law.

WHEREFORE, in view of the foregoing, the judgment appealed from is hereby affirmed, with costs against the appellant.

[G.R. No. 152440. January 31, 2005]

FELICITACION B. BORBAJO, petitioner, vs. HIDDEN VIEW HOMEOWNERS, INC., SPS. MARCELINA A. SARCON, ELY D.
SARCON, ROBERTO ALVAREZ, CORAZON NOMBRADO, and GILBERT ANDRALES, in their personal capacities,
respondents.

DECISION

TINGA, J.:

Before this Court is a Rule 45 petition assailing the Decision[1] dated 21 September 2001 of the Court of Appeals which
reversed the Decision[2] dated 14 September 1999 of the Regional Trial Court (RTC) of Cebu City, Branch 58.

The factual antecedents are as follows:

Jose C. Bontuyan (Bontuyan), Lucy Solon, Georgina Solon, Helen Solon and Vicente Solon, Jr. (the Solons) were the
registered owners of a parcel of agricultural land (Lot 10183-A), covering an area of 13,910 square meters situated at Barangay
Bacayan, Cebu City as evidenced by Transfer Certificate of Title (TCT) No. 73709 of the Register of Deeds of Cebu City.[3]
At the instance of Bontuyan, the property was surveyed on 19 May 1991 to convert it into a subdivision. On 6 June 1991, the
corresponding subdivision plan, showing three (3) road lots as such, was submitted to the Cebu Office of the Department of
Environment and Natural Resources (DENR). On 24 July 1991, the Regional Technical Director of the DENR, Lands
Management Sector, Region Office VII, in Cebu, approved the subdivision plan.[4] Meanwhile, in his own behalf and as
attorney-in-fact of the Solons and following the subdivision scheme in the plan, Bontuyan sold the resulting lots to different
individuals,[5] as evidenced by the Deed of Absolute Sale[6] dated 18 June 1991.

Among the lots sold are the ones which later became the subject of this case, the three (3) road lots. The road lots were sold
to petitioner Felicitacion B. Borbajo, married to Danilo S. Borbajo, and Prescillana B. Bongo (Bongo), married to Patricio P.
Bongo.[7] However, they obtained the titles to the lots more than a month later on 30 July 1991.[8]

Using the advance payments of his lot purchasers, Bontuyan proceeded to develop a subdivision which was later named
Hidden View Subdivision I by its residents and homeowners.[9] Later, he applied for and secured from the Housing and Land
Use Regulatory Board (HLURB) a License to Sell[10] dated 29 July 1991.

Borbajo also decided to develop into a subdivision the other properties adjacent to Hidden View Subdivision I which she
acquired. Thus, she applied for and received SSA 674-5-94 issued by the Cebu City Planning and Development Department,
covering the parcel of land embraced by TCT No. 127642, to be subdivided into twenty-three (23) lots.[11] She named this
new subdivision ST Ville Properties. On 29 July 1994, she secured Certificate of Registration No. 05005 for the ST Ville
Properties project and a License to Sell the same from the HLURB. She also secured a Certificate of Registration dated 18
August 1994 for another subdivision project called Hidden View Subdivision II from the HLURB, with the corresponding License
to Sell issued on 16 August 1994. The two new subdivision projects were located at the back of Hidden View Subdivision I.
The residents and homeowners of Hidden View Subdivision I heard reports to the effect that Borbajo had purchased the entire
subdivision from Bontuyan through an oral agreement. They also heard that they have no right to use the road lots, since the
lots have already been registered in Borbajos name. As a consequence, the Hidden View Homeowners, Inc. invited Borbajo
to a meeting. When confronted by the homeowners about her claim that she had bought the subdivision from Bontuyan,
Borbajo confirmed her claim of ownership over the subdivision and the road lots. She also told them that they have no right
regarding the road right-of-way.[12]

The incident prompted the homeowners of Hidden View Subdivision I to inquire with the HLURB about the validity of the
registration of the subdivision road lots in the name of Borbajo. They also asked whether she had the necessary documents
for the development of Hidden View Subdivision II and ST Ville Properties. In a letter[13] dated 17 March 1997, HLURB
Regional Officer Antonio Decatoria, Sr. replied that under the law the owner or developer of the subdivision should have legal
title or right over the road lots of the subdivision and that if the title or right is in the name of other persons it follows that there
is failure to comply with the requirements of the law. The HLURB Officer pointed out that Hidden View Subdivision II and ST
Ville Properties had not filed an application for registration and license to sell with the HLURB.[14]

On 10 August 1997, the homeowners caused the construction of a guardhouse at the entrance of Hidden View Subdivision I
and hired the services of a security guard to prevent unauthorized persons and construction vehicles from passing through
their subdivision. The measures adversely affected the residents of the subdivisions at the back, as well as Borbajo herself
since her delivery trucks and heavy equipment used in the construction of her housing projects then on-going had been
effectively prevented from passing through the road lots.[15]

On 28 August 1997, Borbajo filed before the RTC of Cebu City, Branch 58, an action for damages and injunction against
Hidden View Homeowners, Inc., spouses Marcelina A. Sarcon and Ely D. Sarcon, Roberto Alvarez and Corazon Nombrado
and Gilbert Andrales (respondents herein). Borbajo prayed for the issuance of a temporary restraining order (TRO) directing
respondents to maintain the status quo and to desist from preventing her delivery trucks and other construction vehicles, and
her construction workers, from passing through the road lots, and, after hearing on the merits, that judgment be rendered
making the restraining order or preliminary injunction permanent and ordering the defendants to pay damages.[16]

The trial court issued a TRO effective for seventy-two (72) hours. After due hearing, it also granted Borbajos application for a
writ of preliminary injunction. It denied respondents motion to dismiss on the ground that it is the HLURB which has jurisdiction
over the case.[17]

After trial, the trial court rendered its decision dated 14 September 1999, the dispositive portion of which reads:

WHEREFORE, premises considered, judgment is hereby rendered enjoining the defendants to close [sic] the road lots in
question, hence, making the injunction permanent, subject to the right of the defendants to regulate the passage thereof by
the plaintiff and the general public; and directing the plaintiff to donate the road lots in question to the government of Cebu
City. No pronouncement as to any damages and as to costs.

SO ORDERED.[18]

On appeal, the Court of Appeals reversed the lower court decision. The decretal portion of the appellate courts decision dated
21 September 2001 reads:

WHEREFORE, premises considered, the present appeal is hereby GRANTED. The appealed Decision in Civil Case No. CEB-
20796 is hereby REVERSED and SET ASIDE and a new one is hereby rendered DISMISSING the complaint. The
counterclaim of defendants-appellants is likewise dismissed for lack of legal and factual bases.

No pronouncement as to costs. SO ORDERED.[19]

Undaunted, Borbajo elevated the case to this Court.

In her petition, Borbajo imputes error to the appellate court (a) in reversing the decision of the trial court which declared her to
be the developer of Hidden View Subdivision I, (b) in finding that she had fraudulently secured the registration of the three (3)
road lots, and (c) in declaring that she is not entitled to the injunctive relief.[20]

Borbajo contends that the appellate court erred in reversing the finding of the RTC that she is the developer of Hidden View
Subdivision I. According to her, and as borne out by her testimony before the RTC, she was the true developer of Hidden View
Subdivision I even though the License to Sell was issued in the name of Bontuyan. The appellate court allegedly violated
prevailing jurisprudence when it held that she fraudulently secured the registration of the three (3) road lots since a certificate
of title cannot be collaterally attacked except in direct proceedings instituted for that purpose. In fact, Hidden View
Homeowners, Inc. has filed a separate case for annulment of title against Borbajo which is now pending before Branch 9 of
the RTC of Cebu City. Further, she claims that she is entitled to the injunctive relief considering that she is the registered
owner of these road lots in question and, hence, she has a right in esse which deserves legal protection.[21]

On the other hand, respondents argue that the sale of the road lots made by Bontuyan in favor of Borbajo was illegal and
contrary to the provisions of Presidential Decree (P.D.) No. 957 which requires that the road lots in a subdivision development
shall be in the name of the developer or owner, of which Borbajo is neither.[22] They aver that Borbajo fraudulently obtained
her titles to the road lots through a falsified deed of sale which was the document presented to the Office of the Register of
Deeds.[23] They also point out that the use by Borbajo of the road lots for the ingress and egress of heavy equipment has
continuously resulted in the rapid deterioration of the roads. Moreover, the road lots are not the nearest point between the
development project of Borbajo and the provincial road.[24] Finally, they assert that they are merely exercising acts of
ownership which include the right to prevent others from enjoying the thing owned by them. Respondents oppose the issuance
of a preliminary injunction because notwithstanding the registration of the subject road in Borbajos name, her title thereto is
tainted by the discovery of fraud she allegedly perpetrated in securing the questioned titles.[25]

The result which Borbajo seeks to achieve which is to reinstate the preliminary injunction issued by the lower court has to be
granted, but not for the reasons which she has raised nor for the grounds which the lower court relied upon.

The ultimate question for resolution is whether respondents may legally prevent Borbajo from using and passing through the
three (3) road lots within Hidden View Subdivision I. It is worthy of note that the right of respondents to use the road lots
themselves is not in dispute.

In resolving the controversy, the lower court addressed only the issue of whether respondents have the right to close the road
lots, and the question of damages.[26] It concluded that respondents cannot legally close the road lots because these are
intended for public use. It opted not to resolve the question pertaining to the validity of Borbajos acquisition of the road lots
and her title thereto on the ground that a Torrens title cannot be collaterally attacked.[27]

For its part, the Court of Appeals addressed the trial courts errors assigned by the respondents herein. The trial court allegedly
erred in: (a) finding that Borbajo was the developer of Hidden View Subdivision I; (b) finding that the manner by which Borbajo
acquired the road lots is irrelevant to the resolution of the issues in this case; (c) finding that the road lots are open to the
public and the only right of the residents therein is to regulate its use; (d) not finding that the elements of an easement of a
right-of-way are not present; (e) finding that the injunction was properly issued and the court ordered Borbajo to donate the
road lots in favor of the local government unit; and (f) failing to award damages to the respondents.[28]

The appellate court found that the injunctive writ was erroneously issued as the same was not based on an actual right sought
to be protected by law. The fact that Borbajo was the developer of Hidden View Subdivision I was not clearly established by
evidence. Although Borbajo has claimed that she was the developer of the subdivision and that Bontuyans name was indicated
in the License to Sell, such claim carried scant weight in the absence of a certificate of registration of the subdivision project
issued in her name by the HLURB and other documents which prove that she was indeed the developer.[29] Further, the
appellate court ruled that the fact of registration of the road lots in Borbajos name was insufficient to defeat the right of the
homeowners of the subdivision and preclude them from regulating their use and administration thereof in accordance with
existing laws and regulations.[30] It likewise held that Borbajo had not complied with the requisites of a compulsory easement
of right-of-way and pointed out the general rule that mere convenience for the dominant estate is not what is required by law
as the basis for setting up a compulsory easement.[31] Hence, this instant judicial recourse.

Noticeably, the appellate court dwelt at length on the question of whether Borbajo was the developer of the Hidden View
Subdivision I as she claimed. Apparently, Borbajo submitted this point, with her focus set on the provisions of P.D. No. 957,
as amended, ordaining that road lots may be titled only in the name of the owner of the subdivision or its developer. In the
process, however, the Court of Appeals lost sight of the settled and decisive fact that Borbajo is one of the registered co-
owners of the road lots along with Bongo. The evidence reveals that Borbajo and Bongo were issued TCTs, all dated 30 July
1991, for the three (3) road lots situated within the Hidden View Subdivision I. These titles were issued pursuant to the Deed
of Absolute Sale dated 18 June 1991 which also mentioned the road lots as such.

As a registered co-owner of the road lots, Borbajo is entitled to avail of all the attributes of ownership under the Civil Codejus
utendi, fruendi, abutendi, disponendi et vindicandi.[32] Article 428 of the New Civil Code is explicit that the owner has the right
to enjoy and dispose of a thing, without other limitations than those established by law. A co-owner, such as Borbajo, is entitled
to use the property owned in common under Article 486 of the Civil Code. Therefore, respondents cannot close the road lots
to prevent Borbajo from using the same.

The Court of Appeals ruled that the road lots cannot be sold to any person pursuant to P.D. No. 957, as amended. It also
pointed out that fraud is manifest in the acquisition of titles thereto. However, it is a settled rule that a Torrens title cannot be
collaterally attacked.

It is a well-known doctrine that the issue as to whether title was procured by falsification or fraud can only be raised in an
action expressly instituted for the purpose. A Torrens title can be attacked only for fraud, within one year after the date of the
issuance of the decree of registration. Such attack must be direct, and not by a collateral proceeding. The title represented by
the certificate cannot be changed, altered, modified, enlarged, or diminished in a collateral proceeding.[33] The certificate of
title serves as evidence of an indefeasible title to the property in favor of the person whose name appears therein.[34]

However, in upholding the efficiency value of the disputed titles for purposes of the present petition, we are not foreclosing
any future determination by appropriate forum on the legality of Borbajos titles over the road lots. Verily, a separate case for
annulment of titles over the road lots is now pending before the court. There are serious allegations that the issuance of the
TCTs over the road lots was tainted with fraud as evidenced by alterations made on the face of the certificates and
discrepancies in the records of the contract of absolute sale filed before the Office of the Register of Deeds and the Notarial
Division of the RTC of Cebu City.[35] If the court finds that the titles of Borbajo were obtained fraudulently, her right to the road
lots ceases as well as her right-of-way by virtue of said titles.
In the meantime, however, we are bound by the value in law and the evidentiary weight of the titles in the name of Borbajo.
As long as the titles are not annulled, Borbajo remains registered a co-owner and therefore her right to use the road lots
subsists.

Likewise, with Borbajo as a registered co-owner of the road lots, it is utterly pointless to discuss whether she is entitled to the
easement of right of way. Both from the text of Article 649[36] of the Civil Code and the perspective of elementary common
sense, the dominant estate cannot be the servient estate at the same time. One of the characteristics of an easement is that
it can be imposed only on the property of another, never on ones own property. An easement can exist only when the servient
and the dominant estates belong to different owners.[37]

Borbajo, being a registered co-owner of the three (3) road lots, is entitled to the injunctive relief.

The requisites to justify an injunctive relief are: (a) the existence of a right in esse or the existence of a right to be protected;
and (b) the act against which injunction is to be directed as a violation of such right.[38] A preliminary injunction order may be
granted only when the application for the issuance of the same shows facts entitling the applicant to the relief demanded.[39]
A preliminary injunction is not proper when its purpose is to take the property out of the possession or control of one party and
transfer the same to the hands of another who did not have such control at the inception of the case and whose legal title has
not clearly been established.[40]

One final note. Respondents in their Answer[41] neither claimed nor asked for the right to regulate the use of the road lots or
that the road lots be donated to the Cebu City Government. Thus, there was utterly no basis for the trial court to include as it
did its disposition along these lines in the decretal portion of its decision.

WHEREFORE, the Decision of the Court of Appeals dated 21 September 2001 is REVERSED and SET ASIDE and the writ
of preliminary injunction issued by the Regional Trial Court of Cebu City, Branch 58, is made permanent, subject to the final
outcome of Civil Case No. 21239 pending before the Regional Trial Court of Cebu City, Branch 9.

No costs. SO ORDERED.

GR. No. L-68291 March 6, 1991

ARCADIO, MELQUIADES, ABDULA, EUGENIO, APOLONIO, all surnamed YBAÑEZ, petitioners,

vs.

THE HONORABLE INTERMEDIATE APPELLATE COURT and VALENTIN O. OUANO, respondents,

Dominador F. Carillo for petitioners.

Pableo B. Baldoza for private respondent.

FERNAN, C.J.:

This petition for certiorari, prohibition and mandamus which this court treated as a petition for review on certiorari in its
resolution of August 22, 1984 seeks to nullify the decision of the Intermediate Appellate Court (now Court of Appeals) dated
June 29, 1984, modifying the decision of the Court of First Instance (now Regional Trial Court) of Davao Oriental, dated June
8, 1981, ordering the herein petitioners to vacate the property in controversy; to return its possession to private respondent
and to pay P10,000.00 representing proceeds of the land from January 4, 1975, and attorney's fees.

Records show that private respondent Valentin Ouano, a claimant-occupant of Lot No. 986, Pls-599-D situated at sitio Bagsac,
barrio of Manikling, Governor Generoso (now San Isidro), Davao del Norte, containing an area of three (3) hectares, 48 ares
and 78 centares which was surveyed on March 13, 1958, as evidenced by the "Survey Notification Card" issued in his name,
filed on February 27, 1959, a homestead application1 with the Bureau of Lands. The said application, recorded as Homestead
Application No. 20-107001, was approved in an order dated March 3, 1959 issued by the District Land Officer, Land District
No. 20, for and by authority of the Director of Lands.

Three (3) years thereafter, or on September 5, 1962, a "Notice of Intention to Make Final Proof was made by Valentin Ouano
to establish his claim to the lot applied for and to prove his residence and cultivation before Land Inspector Lorenzo Sazon at
the Bureau of Lands, Davao City at 10:00 o'clock A.M. appending thereto an affidavit attesting that a copy of his intention to
make final proof relative to his Homestead Application No. 20-10701 was posted at the Municipal building of the Municipality
of Gov. Generoso (now San Isidro), Davao, on the bulletin board of the barrio where the land applied for is located, and in a
conspicuous place on the land itself on the 5th day of August, 1962 and remained so posted for a period of thirty days, until
September 5, 1962.2

On the said date, or on September 5, 1962, Valentin Ouano made his "Final Proof" before Land Inspector Lorenzo Sazon
pursuant to Section 14, Commonwealth Act No. 141, as amended.

The following year, or on March 4, 1963, an order for the issuance of patent was issued by the Bureau of Lands.
On April 15, 1963, an "Original Certificate of Title No. P-15353" was issued to private respondent Valentin Ouano over
Homestead Patent No. 181261 which was transcribed in the "Registration Book" for the province of Davao on October 28,
1963.3

On January 4, 1975, after 19 years of possession, cultivation and income derived from coconuts planted on Lot No. 986,
private respondent Valentin Ouano was interrupted in his peaceful occupation thereof when a certain Arcadio Ybanez and his
sons, Melquiades, Abdula, Eugenia Numeriano, Apolonio and Victoriano, forcibly and unlawfully entered the land armed with
spears, canes and bolos.

Because of the unwarranted refusal of Arcadio Ybanez, et al. to vacate the premises since the time he was dispossessed in
1975, private respondent Valentin Ouano filed on September 24, 1978 a complaint for recovery of possession, damages and
attorney's fees before the then Court of First Instance (now RTC) of Davao Oriental against Arcadio Melquiades, Abdula,
Eugenia Numeriano, Apolonio, Victoriano and Servando, all surnamed Ybanez,4 docketed as Civil Case No. 671, seeking to
enjoin the Ybanezes from further the coconuts therefrom and restore to him the peaceful possession and occupation of the
premises. In his complaint, Valentin Ouano, then plaintiff therein, alleged that he has been in lawful and peaceful possession
since 1956 of a parcel of land designated as Lot No. 986, Pls-599-D situated in Bagsac, Manikling, Governor Generoso (now
San Isidro), Davao Oriental, to which an Original Certificate of Title No. P-(l5353)-P-3932 was issued in his name; that
petitioners, then defendants therein, unlawfully entered his land on January 4, 1975 and started cultivating and gathering the
coconuts, bananas and other fruits therein, thereby illegally depriving him of the possession and enjoyment of the fruits of the
premises.

Petitioners, on the other hand, alleged that plaintiff Valentin Ouano, now private respondent, has never been in possession of
any portion of Lot No. 986 as the same has been continously occupied and possessed by petitioners since 1930 in the concept
of owner and have introduced valuable improvements thereon such as coconuts and houses; that Lot No. 986 was the subject
matter of administrative proceedings before the Bureau of Lands in Mati, Davao Oriental which was consequently decided in
their favor by the Director of Lands on the finding that Valentin Ouano has never resided in the land; that it was declared by
the Director of Lands that the homestead patent issued to private respondent Valentin Ouano was improperly and erroneously
issued, since on the basis of their investigation and relocation survey, the actual occupation and cultivation was made by
petitioner Arcadio Ybañez and his children, consisting of 9.6 hectares which cover the whole of Lot No. 986 and portions of
Lot Nos. 987, 988 and 989; that based on the ocular inspection conducted, it was established that Valentin Ouano did not
have a house on the land and cannot locate the boundaries of his titled land for he never resided therein.5

The trial court, after hearing, rendered on June 8, 1991 its decision6 in favor of private respondent, the dispositive portion of
which reads as follows:

WHEREFORE, in view of all the foregoing, judgment is hereby rendered as follows:

1 — The defendants are ordered to vacate the premises of Lot 986, PLS-599-D, situated at Sitio Bagsac, Manikling, San
Isidro, Governor Generoso and to return the possession thereof to the plaintiff Valentin Ouano together with all the
improvements therein;

2 — To pay unto the plaintiff the sum of P12,000.00, the proceeds of the sale of copra from January 4, 1975 to the present;

3 — To pay attorney's fees of P7,500.00;

4 — To desist from entering the property again after they have turned it over to plaintiff; and

5 — To pay the costs of this suit.7

Petitioners appealed to the Intermediate Appellate Court.

On June 29, 1984, the Intermediate Appellate Court, First Civil Cases Division promulgated a decision,8 affirming the decision
of the trial court, with the modification that the award of Pl2,000.00 representing the proceeds of the land from January 24,
1975 was reduced to P10,000.00 and the amount of P7,500.00 as attorney's fees was fixed at P5,000.00.9

Hence the instant recourse by petitioners.

At the outset, it must be noted that in assailing the appellate court's decision which affirmed that of the trial court, petitioners
relied on the Order dated July 19, 1978 issued by the Director of the Bureau of Lands resolving the protest filed by them on
January 3, 1975, later amended on February 6, 1975, against the Homestead Application No. 20-107001 of Valentin Ouano
over Lot No. 986, Pls-599-D, docketed as B.L. Claim No. 2809, D.L.O. Confect No. (XI-7)102.

Petitioners claimed that the complaint for recovery of possession, damages and attorneys fees against them should have been
dismissed by the trial court for failure of private respondents, as patentee-respondent in the protest case before the Bureau of
Lands, to exhaust administrative remedies which is tantamount to a lack of cause of action under Section 1, Rule 16 of the
Rules of Court; that the decision or order on a question of fact by the Bureau of Lands that Patent No. 101201 issued to private
respondent was improperly and erroneously issued should have been respected by the trial court and the appellate court; that
the indefeasibility of a certificate of title must not be a sword for an offense nor should it be allowed to perpetrate fraud.

We find the contentions unmeritorious.

It was erroneous for petitioners to question the Torrens Original Certificate of Title issued to private respondent over Lot No.
986 in Civil Case No. 671, an ordinary civil action for recovery of possession filed by the registered owner of the said lot, by
invoking as affirmative defense in their answer the Order of the Bureau of Lands, dated July 19, 1978,10 issued pursuant to
the investigatory power of the Director of Lands under Section 91 of Public Land Law (C.A. 141 as amended). Such a defense
partakes of the nature of a collateral attack against a certificate of title brought under the operation of the Torrens system of
registration pursuant to Section 122 of the Land Registration Act, now Section 103 of P.D. 1259. The case law on the matter
does not allow a collateral attack on the Torrens certificate of title on the ground of actual fraud.11 The rule now finds
expression in Section 48 of P.D. 1529 otherwise known as the Property Registration Decree.

The certificate of title serves as evidence of an indefeasible title to the property in favor of the person whose name appears
therein. After the expiration of the one (1) year period from the issuance of the decree of registration upon which it is based, it
becomes incontrovertible.12 The settled rule is that a decree of registration and the certificate of title issued pursuant thereto
may be attacked on the ground of actual fraud within one (1) year from the date of its entry and such an attack must be direct
and not by a collateral proceeding.13 The validity of the certificate of title in this regard can be threshed out only in an action
expressly filed for the purpose.14

It must be emphasized that a certificate of title issued under an administrative proceeding pursuant to a homestead patent, as
in the instant case, is as indefeasible as a certificate of title issued under a judicial registration proceeding, provided the land
covered by said certificate is a disposable public land within the contemplation of the Public Land Law.15

There is no specific provision in the Public Land Law (C.A. No. 141, as amended) or the Land Registration Act (Act 496), now
P.D. 1529, fixing the one (1) year period within which the public land patent is open to review on the ground of actual fraud as
in Section 38 of the Land Registration Act, now Section 32 of P.D. 1529, and clothing a public land patent certificate of title
with indefeasibility. Nevertheless, the pertinent pronouncements in the aforecited cases clearly reveal that Section 38 of the
Land Registration Act, now Section 32 of P.D. 1529 was applied by implication by this Court to the patent issued by the Director
of Lands duly approved by the Secretary of Natural Resources, under the signature of the President of the Philippines in
accordance with law. The date of issuance of the patent, therefore, corresponds to the date of the issuance of the decree in
ordinary registration cases because the decree finally awards the land applied for registration to the party entitled to it, and
the patent issued by the Director of Lands equally and finally grants, awards, and conveys the land applied for to the
applicant.16 This, to our mind, is in consonance with the intent and spirit of the homestead laws, i.e. conservation of a family
home, and to encourage the settlement, residence and cultivation and improvement of the lands of the public domain. If the
title to the land grant in favor of the homesteader would be subjected to inquiry, contest and decision after it has been given
by the Government thru the process of proceedings in accordance with the Public Land Law, there would arise uncertainty,
confusion and suspicion on the government's system of distributing public agricultural lands pursuant to the "Land for the
Landless" policy of the State.

In the instant case, the public land certificate of title issued to private respondent attained the status of indefeasibility one (1)
year after the issuance of patent on April 15, 1963, hence, it is no longer open to review on the ground of actual fraud.
Consequently, the filing of the protest before the Bureau of Lands against the Homestead Application of private respondent
on January 3, 1975, or 12 years after, can no longer re-open or revise the public land certificate of title on the ground of actual
fraud. No reasonable and plausible excuse has been shown for such an unusual delay. The law serves those who are vigilant
and diligent and not those who sleep when the law requires them to act.17

In rendering judgment restoring possession of Lot No. 986 to private respondent Ouano, the duly registered owner thereof,
the trial court merely applied the rule and jurisprudence that a person whose property has been wrongly or erroneously
registered in another's name is not to set aside the decree, but, respecting the decree as incontrovertible and no longer open
to review, to bring an ordinary action in the ordinary court of justice for reconveyance or, if the property has passed into the
hands of an innocent purchaser for value, for damages.18

Although petitioners may still have the remedy of reconveyance, assuming that they are the "owners" and actual occupants of
Lot No. 986, as claimed by them before the trial court, this remedy, however, can no longer be availed of by petitioners due to
prescription. The prescriptive period for the reconveyance of fraudulently registered real property is ten (10) years reckoned
from the date of the issuance of the certificate of title.19

While there is no dispute that the Director of Lands has the authority to conduct an investigation of any alleged fraud in securing
a homestead patent and the corresponding title to a public land notwithstanding the status of indefeasibility attached to the
certificate of title of private respondent, and such investigation cannot be enjoined by a writ of prohibition, it must be observed
however, that whatever may be the result of the factual finding in this administrative proceedings under Section 91 of the
Public Land Law is not decisive of the issue as to who has a better right of possession (possession de jure) over Lot No. 986
in Civil Case No. 671. The action instituted by private respondent before the trial court partakes of the nature of an accion
publiciana which is basically intended for the recovery of possession, and is a plenary action in an ordinary civil proceeding
before a Court of First Instance (now RTC).20

On the other hand, in the case of the administrative investigation under Section 91 of the Public Land Law, the sole and only
purpose of the Director of Lands is to determine whether or not fraud had been committed in securing such title in order that
the appropriate action for reversion may be filed by the Government.21 It is not intended to invalidate the Torrens certificate
of title of the registered owner of the land. Unless and until the land is reverted to the State by virtue of a judgment of a court
of law in a direct proceedings for reversion, the Torrens certificate of title thereto remains valid and binding against the whole
world.

In resolving the basic issue of an accion publiciana, the trial court acted within its sphere of competence and has correctly
found that private respondent Ouano has a better right of possession over Lot No. 986 than petitioners who claimed to own
and possess a total of 12 hectares of land including that of Lot No. 986. Records indicate that petitioners have not taken any
positive step to legitimize before the Bureau of Lands their self-serving claim of possession and cultivation of a total of 12
hectares of public agricultural land by either applying for homestead settlement, sale patent, lease, or confirmation of imperfect
or incomplete title by judicial legalization under Section 48(b) of the Public Land Law, as amended by R.A. No. 1942 and P.D.
1073, or by administrative legalization (free patent) under Section 11 of Public Land Law, as amended.1âwphi1 What was
clearly shown during the trial of the case was that petitioners wrested control and possession of Lot No. 986 on January 4,
1975, or one (1) day after they filed their belated protest on January 3, 1975 before the Bureau of Lands against the homestead
application of private respondent, thus casting serious doubt on their claim of prior possession and productive cultivation.

What is more, it was only in 1975 that petitioners came to know and realize that they do not have actual possession of the so-
called 12 hectares because, as testified by Ernesto Domanais, son-in-law of Arcadio Ybanez, three (3) hectares of their land
were found to be in possession of a certain Rodolfo Beneguian; and that petitioners did not object when said portion of land
was removed from their occupation thereby reducing their purported claim of 12 hectares to only nine (9) hectares.22 It is
relatively easy to declare and claim that one owns and possesses a 12-hectare public agricultural land, but it is entirely a
different matter to affirmatively declare and to prove before a court of law that one actually possessed and cultivated the entire
area to the exclusion of other claimants who stand on equal footing under the Public Land Law (CA 141, as amended) as any
other pioneering claimants.

WHEREFORE, the petition is DENIED for lack of merit. The decision of the Intermediate Appellate Court, now Court of
Appeals, dated June 29, 1984, is hereby affirmed. No costs.

SO ORDERED.
[ GR No. L-46340, Apr 28, 1983 ] SWEET LINES v. CA

MELENCIO-HERRERA, J.:

For having by-passed a port of call without previous notice, petitioner shipping company and the ship captain were sued for
damages by four of its passengers, private respondents herein, before the then Court of First Instance of Cebu, Branch VIII.

Briefly, the facts of record show that private respondents purchased first-class tickets from petitioner at the latter's office in
Cebu City. They were to board petitioner's vessel, M/V Sweet Grace, bound for Catbalogan, Western Samar. Instead of
departing at the scheduled hour of about midnight on July 8, 1972, the vessel set sail at 3:00 A.M. of July 9, 1972 only to be
towed back to Cebu due to engine trouble, arriving there at about 4:00 P.M. on the same day. Repairs having been
accomplished, the vessel lifted anchor again on July 10, 1972 at around 8:00 A.M.

Instead of docking at Catbalogan, which was the first port of call, the vessel proceeded direct to Tacloban at around 9:00 P.M.
of July 10, 1972. Private respondents had no recourse but to disembark and board a ferryboat to Catbalogan.

Hence, this suit for damages for breach of contract of carriage which the Trial Court, affirmed by respondent Appellate Court,
awarded as follows:

"IN THE LIGHT OF THE FOREGOING OBSERVATIONS, judgment is rendered ordering the defendant Sweet Lines,
Incorporated to pay to the plaintiffs the following:

1) P75,000.00 as moral damages divided among the plaintiffs as follows: P30,000.00 for Mrs. Micaela B. Quintos; P25,000.00
for Jesuit Father Jose Bacatan; P10,000.00 for Mrs. Andrea Veloso and P10,000.00 for plaintiff Mike Cabras;

2) P30,000.00 as exemplary or corrective damages;

3) Interest at the legal rate of 6% per annum on the moral and exemplary damages as set forth above from the date of this
decision until said damages are fully paid;

4) P5,000.00 as attorney's fees; and

5) The costs.

Counterclaim dismissed."

The governing provisions are found in the Code of Commerce and read as follows:

"ART. 614. A captain who, having agreed to make a voyage, fails to fulfill his undertaking, without being prevented by fortuitous
event or force majeure, shall indemnify all the losses which his failure may cause, without prejudice to criminal penalties which
may be proper.

and

"ART. 698. In case of interruption of a voyage already begun, the passengers shall only be obliged to pay the fare in proportion
to the distance covered, without right to recover damages if the interruption is due to fortuitous event or force majeure, but
with a right to indemnity, if the interruption should have been caused by the captain exclusively. If the interruption should be
caused by the disability of the vessel, and the passenger should agree to wait for her repairs, he may not be required to pay
any increased fare of passage, but his living expenses during the delay shall be for his own account."

The crucial factor then is the existence of a fortuitous event or force majeure. Without it, the right to damages and indemnity
exists against a captain who fails to fulfill his undertaking or where the interruption has been caused by the captain exclusively.

As found by both Courts below, there was no fortuitous event or force majeure which prevented the vessel from fulfilling its
undertaking of taking private respondents to Catbalogan. In the first place, mechanical defects in the carrier are not considered
a caso fortuito that exempts the carrier from responsibility.[1]

In the second place, even granting arguendo that the engine failure was a fortuitous event, it accounted only for the delay in
departure. When the vessel finally left the port of Cebu on July 10, 1972, there was no longer any force majeure that justified
by-passing a port of call. The vessel was completely repaired the following day after it was towed back to Cebu. In fact, after
docking at Tacloban City, it left the next day for Manila to complete its voyage.[2]
The reason for by-passing the port of Catbalogan, as admitted by petitioner's General Manager, was to enable the vessel to
catch up with its schedule for the next week. The record also discloses that there were 50 passengers for Tacloban compared
to 20 passengers for Catbalogan[3], so that the Catbalogan phase could be scrapped without too much loss for the company.

In defense, petitioner cannot rely on the conditions in small bold print at the back of the ticket reading:

"The passenger's acceptance of this ticket shall be considered as an acceptance of the following conditions:

3. In case the vessel cannot continue or complete the trip for any cause whatsoever, the carrier reserves the right to bring the
passenger to his/her destination at the expense of the carrier or to cancel the ticket and refund the passenger the value of
his/her ticket;

... ... ...

11. The sailing schedule of the vessel for which this ticket was issued is subject to change without previous notice." (Exhibit
"1-A")

Even assuming that those conditions are squarely applicable to the case at bar, petitioner did not comply with the same. It did
not cancel the ticket nor did it refund the value of the tickets to private respondents. Besides, it was not the vessel's sailing
schedule that was involved. Private respondents' complaint is directed not at the delayed departure the next day but at the by-
passing of Catbalogan, their destination. Had petitioner notified them previously, and offered to bring them to their destination
at its expense, or refunded the value of the tickets purchased, perhaps, this controversy would not have arisen.

Furthermore, the conditions relied upon by petitioner cannot prevail over Articles 614 and 698 of the Code of Commerce
heretofore quoted.

The voyage to Catbalogan was "interrupted" by the captain upon instruction of management. The "interruption" was not due
to fortuitous event or force majeure nor to disability of the vessel. Having been caused by the captain upon instruction of
management, the passengers' right to indemnity is evident. The owner of a vessel and the ship agent shall be civilly liable for
the acts of the captain.[4]

Under Article 2220 of the Civil Code, moral damages are justly due in breaches of contract where the defendant acted
fraudulently or in bad faith. Both the Trial Court and the Appellate Court found that there was bad faith on the part of petitioner
in that:

"(1) Defendants-appellants did not give notice to plaintiffs-appellees as to the change of schedule of the vessel;

(2) Knowing fully well that it would take no less than fifteen hours to effect the repairs of the damaged engine, defendants-
appellants instead made announcement of assurance that the vessel would leave within a short period of time, and when
plaintiffs-appellees wanted to leave the port and gave up the trip, defendants-appellants' employees would come and say, 'we
are leaving, already.'

(3) Defendants-appellants did not offer to refund plaintiffs-appellees' tickets nor provide them with transportation from Tacloban
City to Catbalogan."[5]

That finding of bad faith is binding on us, since it is not the function of the Court to analyze and review evidence on this point
all over again,[6] aside from the fact that we find it faithful to the meaning of bad faith enunciated thus:

"Bad faith means a breach of a known duty through some motive or interest or illwill. Self-enrichment or fraternal interest, and
not personal illwill, may have been the motive, but it is malice nevertheless."[7]

Under the circumstances, however, we find the award of moral damages excessive and accordingly reduce them to P3,000.00,
respectively, for each of the private respondents.

The total award of attorney's fees of P5,000.00 is in order considering that the case has reached this Tribunal.

Insofar as exemplary damages are concerned, although there was bad faith, we are not inclined to grant them in addition to
moral damages. Exemplary damages cannot be recovered as a matter of right; the Court decides whether or not they should
be adjudicated.[8] The objective to meet its schedule might have been called for, but petitioner should have taken the
necessary steps for the protection of its passengers under its contract of carriage.

Article 2215(2) of the Civil Code[9] invoked by petitioner is inapplicable herein. The harm done to private respondents
outweighs any benefits they may have derived from being transported to Tacloban instead of being taken to Catbalogan, their
destination and the vessel's first port of call, pursuant to its normal schedule.

ACCORDINGLY, the judgment appealed from is hereby modified in that petitioner is hereby sentenced to indemnify private
respondents in the sum of P3,000.00 each, without interest, plus P1,250.00, each, by way of attorney's fees and litigation
expenses.

Costs against petitioner.SO ORDERED.

G.R. No. 101503 September 15, 1993

PLANTERS PRODUCTS, INC., petitioner, vs.

COURT OF APPEALS, SORIAMONT STEAMSHIP AGENCIES AND KYOSEI KISEN KABUSHIKI KAISHA, respondents.

Gonzales, Sinense, Jimenez & Associates for petitioner.

Siguion Reyna, Montecillo & Ongsiako Law Office for private respondents.

BELLOSILLO, J.:

Does a charter-party1 between a shipowner and a charterer transform a common carrier into a private one as to negate the
civil law presumption of negligence in case of loss or damage to its cargo?

Planters Products, Inc. (PPI), purchased from Mitsubishi International Corporation (MITSUBISHI) of New York, U.S.A.,
9,329.7069 metric tons (M/T) of Urea 46% fertilizer which the latter shipped in bulk on 16 June 1974 aboard the cargo vessel
M/V "Sun Plum" owned by private respondent Kyosei Kisen Kabushiki Kaisha (KKKK) from Kenai, Alaska, U.S.A., to Poro
Point, San Fernando, La Union, Philippines, as evidenced by Bill of Lading No. KP-1 signed by the master of the vessel and
issued on the date of departure.

On 17 May 1974, or prior to its voyage, a time charter-party on the vessel M/V "Sun Plum" pursuant to the Uniform General
Charter2 was entered into between Mitsubishi as shipper/charterer and KKKK as shipowner, in Tokyo, Japan.3 Riders to the
aforesaid charter-party starting from par. 16 to 40 were attached to the pre-printed agreement. Addenda Nos. 1, 2, 3 and 4 to
the charter-party were also subsequently entered into on the 18th, 20th, 21st and 27th of May 1974, respectively.

Before loading the fertilizer aboard the vessel, four (4) of her holds4 were all presumably inspected by the charterer's
representative and found fit to take a load of urea in bulk pursuant to par. 16 of the charter-party which reads:

16. . . . At loading port, notice of readiness to be accomplished by certificate from National Cargo Bureau inspector or
substitute appointed by charterers for his account certifying the vessel's readiness to receive cargo spaces. The vessel's hold
to be properly swept, cleaned and dried at the vessel's expense and the vessel to be presented clean for use in bulk to the
satisfaction of the inspector before daytime commences. (emphasis supplied)

After the Urea fertilizer was loaded in bulk by stevedores hired by and under the supervision of the shipper, the steel hatches
were closed with heavy iron lids, covered with three (3) layers of tarpaulin, then tied with steel bonds. The hatches remained
closed and tightly sealed throughout the entire voyage.5

Upon arrival of the vessel at her port of call on 3 July 1974, the steel pontoon hatches were opened with the use of the vessel's
boom. Petitioner unloaded the cargo from the holds into its steelbodied dump trucks which were parked alongside the berth,
using metal scoops attached to the ship, pursuant to the terms and conditions of the charter-partly (which provided for an
F.I.O.S. clause).6 The hatches remained open throughout the duration of the discharge.7

Each time a dump truck was filled up, its load of Urea was covered with tarpaulin before it was transported to the consignee's
warehouse located some fifty (50) meters from the wharf. Midway to the warehouse, the trucks were made to pass through a
weighing scale where they were individually weighed for the purpose of ascertaining the net weight of the cargo. The port area
was windy, certain portions of the route to the warehouse were sandy and the weather was variable, raining occasionally while
the discharge was in progress.8 The petitioner's warehouse was made of corrugated galvanized iron (GI) sheets, with an
opening at the front where the dump trucks entered and unloaded the fertilizer on the warehouse floor. Tarpaulins and GI
sheets were placed in-between and alongside the trucks to contain spillages of the ferilizer.9

It took eleven (11) days for PPI to unload the cargo, from 5 July to 18 July 1974 (except July 12th, 14th and 18th).10 A private
marine and cargo surveyor, Cargo Superintendents Company Inc. (CSCI), was hired by PPI to determine the "outturn" of the
cargo shipped, by taking draft readings of the vessel prior to and after discharge. 11 The survey report submitted by CSCI to
the consignee (PPI) dated 19 July 1974 revealed a shortage in the cargo of 106.726 M/T and that a portion of the Urea fertilizer
approximating 18 M/T was contaminated with dirt. The same results were contained in a Certificate of Shortage/Damaged
Cargo dated 18 July 1974 prepared by PPI which showed that the cargo delivered was indeed short of 94.839 M/T and about
23 M/T were rendered unfit for commerce, having been polluted with sand, rust and dirt. 12

Consequently, PPI sent a claim letter dated 18 December 1974 to Soriamont Steamship Agencies (SSA), the resident agent
of the carrier, KKKK, for P245,969.31 representing the cost of the alleged shortage in the goods shipped and the diminution
in value of that portion said to have been contaminated with dirt. 13

Respondent SSA explained that they were not able to respond to the consignee's claim for payment because, according to
them, what they received was just a request for shortlanded certificate and not a formal claim, and that this "request" was
denied by them because they "had nothing to do with the discharge of the shipment." 14 Hence, on 18 July 1975, PPI filed an
action for damages with the Court of First Instance of Manila. The defendant carrier argued that the strict public policy
governing common carriers does not apply to them because they have become private carriers by reason of the provisions of
the charter-party. The court a quo however sustained the claim of the plaintiff against the defendant carrier for the value of the
goods lost or damaged when it ruled thus: 15
. . . Prescinding from the provision of the law that a common carrier is presumed negligent in case of loss or damage of the
goods it contracts to transport, all that a shipper has to do in a suit to recover for loss or damage is to show receipt by the
carrier of the goods and to delivery by it of less than what it received. After that, the burden of proving that the loss or damage
was due to any of the causes which exempt him from liability is shipted to the carrier, common or private he may be. Even if
the provisions of the charter-party aforequoted are deemed valid, and the defendants considered private carriers, it was still
incumbent upon them to prove that the shortage or contamination sustained by the cargo is attributable to the fault or
negligence on the part of the shipper or consignee in the loading, stowing, trimming and discharge of the cargo. This they
failed to do. By this omission, coupled with their failure to destroy the presumption of negligence against them, the defendants
are liable (emphasis supplied).

On appeal, respondent Court of Appeals reversed the lower court and absolved the carrier from liability for the value of the
cargo that was lost or damaged. 16 Relying on the 1968 case of Home Insurance Co. v. American Steamship Agencies,
Inc.,17 the appellate court ruled that the cargo vessel M/V "Sun Plum" owned by private respondent KKKK was a private
carrier and not a common carrier by reason of the time charterer-party. Accordingly, the Civil Code provisions on common
carriers which set forth a presumption of negligence do not find application in the case at bar. Thus —

. . . In the absence of such presumption, it was incumbent upon the plaintiff-appellee to adduce sufficient evidence to prove
the negligence of the defendant carrier as alleged in its complaint. It is an old and well settled rule that if the plaintiff, upon
whom rests the burden of proving his cause of action, fails to show in a satisfactory manner the facts upon which he bases
his claim, the defendant is under no obligation to prove his exception or defense (Moran, Commentaries on the Rules of Court,
Volume 6, p. 2, citing Belen v. Belen, 13 Phil. 202).

But, the record shows that the plaintiff-appellee dismally failed to prove the basis of its cause of action, i.e. the alleged
negligence of defendant carrier. It appears that the plaintiff was under the impression that it did not have to establish
defendant's negligence. Be that as it may, contrary to the trial court's finding, the record of the instant case discloses ample
evidence showing that defendant carrier was not negligent in performing its obligation . . . 18 (emphasis supplied).

Petitioner PPI appeals to us by way of a petition for review assailing the decision of the Court of Appeals. Petitioner theorizes
that the Home Insurance case has no bearing on the present controversy because the issue raised therein is the validity of a
stipulation in the charter-party delimiting the liability of the shipowner for loss or damage to goods cause by want of due
deligence on its part or that of its manager to make the vessel seaworthy in all respects, and not whether the presumption of
negligence provided under the Civil Code applies only to common carriers and not to private carriers. 19 Petitioner further
argues that since the possession and control of the vessel remain with the shipowner, absent any stipulation to the contrary,
such shipowner should made liable for the negligence of the captain and crew. In fine, PPI faults the appellate court in not
applying the presumption of negligence against respondent carrier, and instead shifting the onus probandi on the shipper to
show want of due deligence on the part of the carrier, when he was not even at hand to witness what transpired during the
entire voyage.

As earlier stated, the primordial issue here is whether a common carrier becomes a private carrier by reason of a charter-
party; in the negative, whether the shipowner in the instant case was able to prove that he had exercised that degree of
diligence required of him under the law.

It is said that etymology is the basis of reliable judicial decisions in commercial cases. This being so, we find it fitting to first
define important terms which are relevant to our discussion.

A "charter-party" is defined as a contract by which an entire ship, or some principal part thereof, is let by the owner to another
person for a specified time or use; 20 a contract of affreightment by which the owner of a ship or other vessel lets the whole
or a part of her to a merchant or other person for the conveyance of goods, on a particular voyage, in consideration of the
payment of freight; 21 Charter parties are of two types: (a) contract of affreightment which involves the use of shipping space
on vessels leased by the owner in part or as a whole, to carry goods for others; and, (b) charter by demise or bareboat charter,
by the terms of which the whole vessel is let to the charterer with a transfer to him of its entire command and possession and
consequent control over its navigation, including the master and the crew, who are his servants. Contract of affreightment may
either be time charter, wherein the vessel is leased to the charterer for a fixed period of time, or voyage charter, wherein the
ship is leased for a single voyage. 22 In both cases, the charter-party provides for the hire of vessel only, either for a
determinate period of time or for a single or consecutive voyage, the shipowner to supply the ship's stores, pay for the wages
of the master and the crew, and defray the expenses for the maintenance of the ship.

Upon the other hand, the term "common or public carrier" is defined in Art. 1732 of the Civil Code. 23 The definition extends
to carriers either by land, air or water which hold themselves out as ready to engage in carrying goods or transporting
passengers or both for compensation as a public employment and not as a casual occupation. The distinction between a
"common or public carrier" and a "private or special carrier" lies in the character of the business, such that if the undertaking
is a single transaction, not a part of the general business or occupation, although involving the carriage of goods for a fee, the
person or corporation offering such service is a private carrier. 24

Article 1733 of the New Civil Code mandates that common carriers, by reason of the nature of their business, should observe
extraordinary diligence in the vigilance over the goods they carry.25 In the case of private carriers, however, the exercise of
ordinary diligence in the carriage of goods will suffice. Moreover, in the case of loss, destruction or deterioration of the goods,
common carriers are presumed to have been at fault or to have acted negligently, and the burden of proving otherwise rests
on them.26 On the contrary, no such presumption applies to private carriers, for whosoever alleges damage to or deterioration
of the goods carried has the onus of proving that the cause was the negligence of the carrier.

It is not disputed that respondent carrier, in the ordinary course of business, operates as a common carrier, transporting goods
indiscriminately for all persons. When petitioner chartered the vessel M/V "Sun Plum", the ship captain, its officers and
compliment were under the employ of the shipowner and therefore continued to be under its direct supervision and control.
Hardly then can we charge the charterer, a stranger to the crew and to the ship, with the duty of caring for his cargo when the
charterer did not have any control of the means in doing so. This is evident in the present case considering that the steering
of the ship, the manning of the decks, the determination of the course of the voyage and other technical incidents of maritime
navigation were all consigned to the officers and crew who were screened, chosen and hired by the shipowner. 27

It is therefore imperative that a public carrier shall remain as such, notwithstanding the charter of the whole or portion of a
vessel by one or more persons, provided the charter is limited to the ship only, as in the case of a time-charter or voyage-
charter. It is only when the charter includes both the vessel and its crew, as in a bareboat or demise that a common carrier
becomes private, at least insofar as the particular voyage covering the charter-party is concerned. Indubitably, a shipowner in
a time or voyage charter retains possession and control of the ship, although her holds may, for the moment, be the property
of the charterer. 28

Respondent carrier's heavy reliance on the case of Home Insurance Co. v. American Steamship Agencies, supra, is misplaced
for the reason that the meat of the controversy therein was the validity of a stipulation in the charter-party exempting the
shipowners from liability for loss due to the negligence of its agent, and not the effects of a special charter on common carriers.
At any rate, the rule in the United States that a ship chartered by a single shipper to carry special cargo is not a common
carrier, 29 does not find application in our jurisdiction, for we have observed that the growing concern for safety in the
transportation of passengers and /or carriage of goods by sea requires a more exacting interpretation of admiralty laws, more
particularly, the rules governing common carriers.

We quote with approval the observations of Raoul Colinvaux, the learned barrister-at-law 30 —

As a matter of principle, it is difficult to find a valid distinction between cases in which a ship is used to convey the goods of
one and of several persons. Where the ship herself is let to a charterer, so that he takes over the charge and control of her,
the case is different; the shipowner is not then a carrier. But where her services only are let, the same grounds for imposing a
strict responsibility exist, whether he is employed by one or many. The master and the crew are in each case his servants, the
freighter in each case is usually without any representative on board the ship; the same opportunities for fraud or collusion
occur; and the same difficulty in discovering the truth as to what has taken place arises . . .

In an action for recovery of damages against a common carrier on the goods shipped, the shipper or consignee should first
prove the fact of shipment and its consequent loss or damage while the same was in the possession, actual or constructive,
of the carrier. Thereafter, the burden of proof shifts to respondent to prove that he has exercised extraordinary diligence
required by law or that the loss, damage or deterioration of the cargo was due to fortuitous event, or some other circumstances
inconsistent with its liability. 31

To our mind, respondent carrier has sufficiently overcome, by clear and convincing proof, the prima facie presumption of
negligence.

The master of the carrying vessel, Captain Lee Tae Bo, in his deposition taken on 19 April 1977 before the Philippine Consul
and Legal Attache in the Philippine Embassy in Tokyo, Japan, testified that before the fertilizer was loaded, the four (4) hatches
of the vessel were cleaned, dried and fumigated. After completing the loading of the cargo in bulk in the ship's holds, the steel
pontoon hatches were closed and sealed with iron lids, then covered with three (3) layers of serviceable tarpaulins which were
tied with steel bonds. The hatches remained close and tightly sealed while the ship was in transit as the weight of the steel
covers made it impossible for a person to open without the use of the ship's boom. 32

It was also shown during the trial that the hull of the vessel was in good condition, foreclosing the possibility of spillage of the
cargo into the sea or seepage of water inside the hull of the vessel. 33 When M/V "Sun Plum" docked at its berthing place,
representatives of the consignee boarded, and in the presence of a representative of the shipowner, the foreman, the
stevedores, and a cargo surveyor representing CSCI, opened the hatches and inspected the condition of the hull of the vessel.
The stevedores unloaded the cargo under the watchful eyes of the shipmates who were overseeing the whole operation on
rotation basis. 34

Verily, the presumption of negligence on the part of the respondent carrier has been efficaciously overcome by the showing
of extraordinary zeal and assiduity exercised by the carrier in the care of the cargo. This was confirmed by respondent appellate
court thus —

. . . Be that as it may, contrary to the trial court's finding, the record of the instant case discloses ample evidence showing that
defendant carrier was not negligent in performing its obligations. Particularly, the following testimonies of plaintiff-appellee's
own witnesses clearly show absence of negligence by the defendant carrier; that the hull of the vessel at the time of the
discharge of the cargo was sealed and nobody could open the same except in the presence of the owner of the cargo and the
representatives of the vessel (TSN, 20 July 1977, p. 14); that the cover of the hatches was made of steel and it was overlaid
with tarpaulins, three layers of tarpaulins and therefore their contents were protected from the weather (TSN, 5 April 1978, p.
24); and, that to open these hatches, the seals would have to be broken, all the seals were found to be intact (TSN, 20 July
1977, pp. 15-16) (emphasis supplied).

The period during which private respondent was to observe the degree of diligence required of it as a public carrier began
from the time the cargo was unconditionally placed in its charge after the vessel's holds were duly inspected and passed
scrutiny by the shipper, up to and until the vessel reached its destination and its hull was reexamined by the consignee, but
prior to unloading. This is clear from the limitation clause agreed upon by the parties in the Addendum to the standard
"GENCON" time charter-party which provided for an F.I.O.S., meaning, that the loading, stowing, trimming and discharge of
the cargo was to be done by the charterer, free from all risk and expense to the carrier. 35 Moreover, a shipowner is liable for
damage to the cargo resulting from improper stowage only when the stowing is done by stevedores employed by him, and
therefore under his control and supervision, not when the same is done by the consignee or stevedores under the employ of
the latter. 36

Article 1734 of the New Civil Code provides that common carriers are not responsible for the loss, destruction or deterioration
of the goods if caused by the charterer of the goods or defects in the packaging or in the containers. The Code of Commerce
also provides that all losses and deterioration which the goods may suffer during the transportation by reason of fortuitous
event, force majeure, or the inherent defect of the goods, shall be for the account and risk of the shipper, and that proof of
these accidents is incumbent upon the carrier. 37 The carrier, nonetheless, shall be liable for the loss and damage resulting
from the preceding causes if it is proved, as against him, that they arose through his negligence or by reason of his having
failed to take the precautions which usage has established among careful persons. 38

Respondent carrier presented a witness who testified on the characteristics of the fertilizer shipped and the expected risks of
bulk shipping. Mr. Estanislao Chupungco, a chemical engineer working with Atlas Fertilizer, described Urea as a chemical
compound consisting mostly of ammonia and carbon monoxide compounds which are used as fertilizer. Urea also contains
46% nitrogen and is highly soluble in water. However, during storage, nitrogen and ammonia do not normally evaporate even
on a long voyage, provided that the temperature inside the hull does not exceed eighty (80) degrees centigrade. Mr.
Chupungco further added that in unloading fertilizer in bulk with the use of a clamped shell, losses due to spillage during such
operation amounting to one percent (1%) against the bill of lading is deemed "normal" or "tolerable." The primary cause of
these spillages is the clamped shell which does not seal very tightly. Also, the wind tends to blow away some of the materials
during the unloading process.

The dissipation of quantities of fertilizer, or its daterioration in value, is caused either by an extremely high temperature in its
place of storage, or when it comes in contact with water. When Urea is drenched in water, either fresh or saline, some of its
particles dissolve. But the salvaged portion which is in liquid form still remains potent and usable although no longer saleable
in its original market value.

The probability of the cargo being damaged or getting mixed or contaminated with foreign particles was made greater by the
fact that the fertilizer was transported in "bulk," thereby exposing it to the inimical effects of the elements and the grimy
condition of the various pieces of equipment used in transporting and hauling it.

The evidence of respondent carrier also showed that it was highly improbable for sea water to seep into the vessel's holds
during the voyage since the hull of the vessel was in good condition and her hatches were tightly closed and firmly sealed,
making the M/V "Sun Plum" in all respects seaworthy to carry the cargo she was chartered for. If there was loss or
contamination of the cargo, it was more likely to have occurred while the same was being transported from the ship to the
dump trucks and finally to the consignee's warehouse. This may be gleaned from the testimony of the marine and cargo
surveyor of CSCI who supervised the unloading. He explained that the 18 M/T of alleged "bar order cargo" as contained in
their report to PPI was just an approximation or estimate made by them after the fertilizer was discharged from the vessel and
segregated from the rest of the cargo.

The Court notes that it was in the month of July when the vessel arrived port and unloaded her cargo. It rained from time to
time at the harbor area while the cargo was being discharged according to the supply officer of PPI, who also testified that it
was windy at the waterfront and along the shoreline where the dump trucks passed enroute to the consignee's warehouse.

Indeed, we agree with respondent carrier that bulk shipment of highly soluble goods like fertilizer carries with it the risk of loss
or damage. More so, with a variable weather condition prevalent during its unloading, as was the case at bar. This is a risk
the shipper or the owner of the goods has to face. Clearly, respondent carrier has sufficiently proved the inherent character of
the goods which makes it highly vulnerable to deterioration; as well as the inadequacy of its packaging which further
contributed to the loss. On the other hand, no proof was adduced by the petitioner showing that the carrier was remise in the
exercise of due diligence in order to minimize the loss or damage to the goods it carried.

WHEREFORE, the petition is DISMISSED. The assailed decision of the Court of Appeals, which reversed the trial court, is
AFFIRMED. Consequently, Civil Case No. 98623 of the then Court of the First Instance, now Regional Trial Court, of Manila
should be, as it is hereby DISMISSED.

Costs against petitioner.SO ORDERED.

G.R. No. L-51910 August 10, 1989

LITONJUA SHIPPING COMPANY INC., petitioner vs.NATIONAL SEAMEN BOARD and GREGORIO P. CANDONGO
respondents.Ferrer, Valte, Mariano, Sangalang & Villanueva for petitioner. Estratonico S. Anano for private respondent.

FELICIANO, J.:

In this Petition for Certiorari, petitioner Litonjua Shipping Company, Inc. ("Lintonjua") seeks to annul and set aside a decision
dated, 31 May 1979 of the National Seamen Board ("NSB") in NSB Case No. 1331-77 affirming the decision dated 17 February
1977 of the NSB hearing officer which adjudged petitioner Litonjua liable to private respondent for violation of the latter's
contract of employment and which ordered petitioner to pay damages.

Petitioner Litonjua is the duly appointed local crewing Managing Office of the Fairwind Shipping Corporation ('Fairwind). The
M/V Dufton Bay is an ocean-going vessel of foreign registry owned by the R.D. Mullion Ship Broking Agency Ltd. ("Mullion").
On 11 September 1976, while the Dufton Bay was in the port of Cebu and while under charter by Fairwind, the vessel's master
contracted the services of, among others, private respondent Gregorio Candongo to serve as Third Engineer for a period of
twelve (12) months with a monthly wage of US$500.00. This agreement was executed before the Cebu Area Manning Unit of
the NSB. Thereafter, private respondent boarded the vessel. On 28 December 1976, before expiration of his contract, private
respondent was required to disembark at Port Kelang, Malaysia, and was returned to the Philippines on 5 January 1977. The
cause of the discharge was described in his Seaman's Book as 'by owner's arrange".1

Shortly after returning to the Philippines, private respondent filed a complaint before public respondent NSB, which complaint
was docketed as NSB-1331-77, for violation of contract, against Mullion as the shipping company and petitioner Litonjua as
agent of the shipowner and of the charterer of the vessel.

At the initial hearing, the NSB hearing officer held a conference with the parties, at which conference petitioner Litonjua was
represented by one of its supercargos, Edmond Cruz. Edmond Cruz asked, in writing, that the hearing be postponed for a
month upon the ground that the employee of Litonjua in charge of the case was out of town. The hearing officer denied this
request and then declared petitioner Litonjua in default. At the hearing, private respondent testified that when he was recruited
by the Captain of the Dufton Bay, the latter was accompanied to the NSB Cebu Area Manning Unit by two (2) supercargos
sent by petitioner Litonjua to Cebu, and that the two (2) supercargos Edmond Cruz and Renato Litonjua assisted private
respondent in the procurement of his National Investigation and Security Agency (NISA) clearance. Messrs. Cruz and Litonjua
were also present during private respondent's interview by Captain Ho King Yiu of the Dufton Bay.

On 17 February 1977, the hearing officer of the NSB rendered a judgment by default, 2 the dispositive portion of which read:

Wherefore, premises considered, judgment is hereby rendered ordering the respondents R.D. Mullion Shipbrokers Co., Ltd.,
and Litonjua Shipping Co., Inc., jointly and solidarily to pay the complainant the sum of four thousand six hundred fifty seven
dollars and sixty three cents ($4,657.63) or its equivalent in the Phil. currency within 10 days from receipt of the copy of this
Decision the payment of which to be coursed through the then NSB.

The above conclusion was rationalized in the following terms:

From the evidence on record it clearly appears that there was no sufficient or valid cause for the respondents to terminate the
services of complainant prior to 17 September 1977, which is the expiry date of the contract. For this reason the respondents
have violated the conditions of the contract of employment which is a sufficient justification for this Board to render award in
favor of the complainant of the unpaid salaries due the latter as damages corresponding to the unexpired portion of the contract
including the accrued leave pay computed on the basis of five [51 days pay for every month of service based at $500.00
monthly salary. Complainant's wages account further show that he has an undrawn wage amounting to US$13.19 to be paid
by the respondents Philippine agency together with his accrued leave pay. 3

Petitioner Litonjua filed a motion for reconsideration of the hearing officer's decision; the motion was denied. Petitioner next
filed an "Appeal and/or Motion for Reconsideration of the Default Judgment dated 9 August 1977" with the central office of the
NSB. NSB then suspended its hearing officer's decision and lifted the order of default against petitioner Litonjua, thereby
allowing the latter to adduce evidence in its own behalf The NSB hearing officer, on 26 April 1978, made the following findings:

While it appears that in the preparation of the employment papers of the complainant, what was indicated therein was R.D.
Mullion Co. (HK) Ltd. referring to Exhibit "B" (Standard Format of a Service Agreement) and Exhibit "C" (Affidavit of
Undertaking), as thecompany whom Captain Ho King Yiu, the Master of the vessel Dufton Bay, was representing to be the
shipowner, the fact remains that at the time of the recruitment of the complainant, as duly verified by the National Seamen
Board, Cebu Area Manning Unit, the Litonjua Shipping Company was the authorized agent of the vessel's charterer, the
Fairwind Shipping Corporation, and that in the recruitment process, the Litonjua Shipping Company through its supercargos
in the persons of Edmund Cruz and Renato Litonjua, had knowledge thereof and in fact assisted in the interviews conducted
by the Master of the crew applicants as admitted by Renato Litonjua including the acts of facilitating the crew's NISA clearances
as testified to by complainant. Moreover, the participation of the Litonjua Shipping Corporation in the recruitment of
complainant, together with the other crewmembers, in Cebu in September 1976 can be traced to the contents of the letter of
April 5, 1976 by the Fairwind Shipping Limited, thru its Director David H.L. Wu addressed to the National Seamen Board, copy
of which is on file with Contracts and Licensing Division, quote:
This is to certify that Messrs. Litonjua Shipping, Inc. is duly appointed local crewing Managing Office to attend on our Crew
requirements as well as attend to our ship's requirements when in Philippine ports.

We further authorized Litonjua Shipping Co., Inc. to act as local representative who can sue and be sued, and to bind and sign
contracts for our behalf. 4

The NSB then lifted the suspension of the hearing officer's 17 February 1977 decision.

Petitioner Litonjua once more moved for reconsideration. On 31 May 1979, public respondent NSB rendered a decision 5
which affirmed its hearing offices decision of 17 February 1977 and which read in part as follows:

It is clear that respondent Litonjua Shipping Co., Inc. is the authorized Philippine agent of Fairwind Shipping Corporation,
charterer of the vessel 'Dufton Bay, wherein complainant, served as 3rd Engineer from 17 September until disembarkation on
December 28, 1976. It is also clear from the complainant's wages account bearing the heading 'Fairwind Shipping Corporation',
signed by the Master of the vessel that the Philippine agency referred to herein directed to pay the said withdrawn wages of
$13.19 is no other than Litonjua Shipping Company, Inc.

From this observation, it can be reasonably inferred that the master of the vessel acted for and in behalf of Fairwind Shipping
Corporation who had the obligation to pay the salary of the complainant. It necessarily follows that Fairwind Shipping
Corporation is the employer of said complainant. Moreover, it had been established by complainant that Litonjua Shipping
Company, Inc., had knowledge of and participated, through its employee, in the recruitment of herein complainant.

xxx xxx xxx

In view of the foregoing, and pursuant to Art. 3 of the New Labor Code of the Philippines, which provides that, 'The state shall
afford protection to labor . . .' as well as the provisions of Art. 4 thereof, that 'all doubts in the implementation and interpretation
of the provisions of the Code, including its implementing rules and regulations, shall be resolved in favor of labor', it is our
conclusion, that the decision dated February 17, 1977, is based on evidence formally offered and presented during the hearing
and that there was no grave abuse of discretion committed by the hearing officer in finding respondent Litonjua Shipping
Company, Inc., liable to complainant. (Emphasis supplied)

In the instant Petition for Certiorari, petitioner Litonjua assails the decision of public respondent NSB declaring the charterer
Fairwind as employer of private respondent, and for whose liability petitioner was made responsible, as constituting a grave
abuse of discretion amounting to lack of jurisdiction. The principal if not the sole issue to be resolved here is whether or not
the charterer Fairwind was properly regarded as the employer of private respondent Candongo.

Petitioner Litonjua makes two (2) principal submissions in support of its contention, to wit:

1) As a general rule, admiralty law as embodied in the Philippine Code of Commerce fastens liability for payment of the
crew's wages upon the ship owner, and not the charterer; and

2) The evidence of record is grossly inadequate to shift such liability from the shipowner to the petitioner.6

Petitioner Litonjua contends that the shipowner, not the charterer, was the employer of private respondent; and that liability
for damages cannot be imposed upon petitioner which was a mere agent of the charterer. It is insisted that private respondent's
contract of employment and affidavit of undertaking clearly showed that the party with whom he had contracted was none
other than Mullion, the shipowner, represented by the ship's master. 7 Petitioner also argues that its supercargos merely
assisted Captain Ho King Yiu of the Dufton Bay in being private respondent as Third Engineer. Petitioner also points to the
circumstance that the discharge and the repatriation of private respondent was specified in his Seaman's Book as having been
"by owner's arrange." Petitioner Litonjua thus argues that being the agent of the charterer and not of the shipowner, it
accordingly should not have been held liable on the contract of employment of private respondent.

We are not persuaded by petitioner's argument. We believe that there are two (2) grounds upon which petitioner Litonjua may
be held liable to the private respondent on the contract of employment.

The first basis is the charter party which existed between Mullion, the shipowner, and Fairwind, the charterer. In modern
maritime law and usage, there are three (3) distinguishable types of charter parties: (a) the "bareboat" or "demise" charter; (b)
the "time" charter; and (c) the "voyage" or "trip" charter. A bareboat or demise charter is a demise of a vessel, much as a lease
of an unfurnished house is a demise of real property. The shipowner turns over possession of his vessel to the charterer, who
then undertakes to provide a crew and victuals and supplies and fuel for her during the term of the charter. The shipowner is
not normally required by the terms of a demise charter to provide a crew, and so the charterer gets the "bare boat", i.e., without
a crew. 8 Sometimes, of course, the demise charter might provide that the shipowner is to furnish a master and crew to man
the vessel under the charterer's direction, such that the master and crew provided by the shipowner become the agents and
servants or employees of the charterer, and the charterer (and not the owner) through the agency of the master, has
possession and control of the vessel during the charter period. A time charter, upon the other hand, like a demise charter, is
a contract for the use of a vessel for a specified period of time or for the duration of one or more specified voyages. In this
case, however, the owner of a time-chartered vessel (unlike the owner of a vessel under a demise or bare-boat charter),
retains possession and control through the master and crew who remain his employees. What the time charterer acquires is
the right to utilize the carrying capacity and facilities of the vessel and to designate her destinations during the term of the
charter. A voyage charter, or trip charter, is simply a contract of affreightment, that is, a contract for the carriage of goods, from
one or more ports of loading to one or more ports of unloading, on one or on a series of voyages. In a voyage charter, master
and crew remain in the employ of the owner of the vessel. 9

It is well settled that in a demise or bare boat charter, the charterer is treated as owner pro hac vice of the vessel, the charterer
assuming in large measure the customary rights and liabilities of the shipowner in relation to third persons who have dealt with
him or with the vessel. 10 In such case, the Master of the vessel is the agent of the charterer and not of the shipowner.11 The
charterer or owner pro hac vice, and not the general owner of the vessel, is held liable for the expenses of the voyage including
the wages of the seamen.12

It is important to note that petitioner Litonjua did not place into the record of this case a copy of the charter party covering the
M/V Dufton Bay. We must assume that petitioner Litonjua was aware of the nature of a bareboat or demise charter and that if
petitioner did not see fit to include in the record a copy of the charter party, which had been entered into by its principal, it was
because the charter party and the provisions thereof were not supportive of the position adopted by petitioner Litonjua in the
present case, a position diametrically opposed to the legal consequence of a bareboat charter.13 Treating Fairwind as owner
pro hac vice, petitioner Litonjua having failed to show that it was not such, we believe and so hold that petitioner Litonjua, as
Philippine agent of the charterer, may be held liable on the contract of employment between the ship captain and the private
respondent.

There is a second and ethically more compelling basis for holding petitioner Litonjua liable on the contract of employment of
private respondent. The charterer of the vessel, Fairwind, clearly benefitted from the employment of private respondent as
Third Engineer of the Dufton Bay, along with the ten (10) other Filipino crewmembers recruited by Captain Ho in Cebu at the
same occasion. 14 If private respondent had not agreed to serve as such Third Engineer, the ship would not have been able
to proceed with its voyage. The equitable consequence of this benefit to the charterer is, moreover, reinforced by convergence
of other circumstances of which the Court must take account. There is the circumstance that only the charterer, through the
petitioner, was present in the Philippines. Secondly, the scope of authority or the responsibility of petitioner Litonjua was not
clearly delimited. Petitioner as noted, took the position that its commission was limited to taking care of vessels owned by
Fairwind. But the documentary authorization read into the record of this case does not make that clear at all. The words "our
ships" may well be read to refer both to vessels registered in the name of Fairwind and vessels owned by others but chartered
by Fairwind. Indeed the commercial, operating requirements of a vessel for crew members and for supplies and provisions
have no relationship to the technical characterization of the vessel as owned by or as merely chartered by Fairwind. In any
case, it is not clear from the authorization given by Fairwind to petitioner Litonjua that vessels chartered by Fairwind (and
owned by some other companies) were not to be taken care of by petitioner Litonjua should such vessels put into a Philippine
port. The statement of account which the Dufton Bay's Master had signed and which pertained to the salary of private
respondent had referred to a Philippine agency which would take care of disbursing or paying such account. 'there is no
question that Philippine agency was the Philippine agent of the charterer Fairwind. Moreover, there is also no question that
petitioner Litonjua did assist the Master of the vessel in locating and recruiting private respondent as Third Engineer of the
vessel as well as ten (10) other Filipino seamen as crew members. In so doing, petitioner Litonjua certainly in effect
represented that it was taking care of the crewing and other requirements of a vessel chartered by its principal, Fairwind.15

Last, but certainly not least, there is the circumstance that extreme hardship would result for the private respondent if petitioner
Litonjua, as Philippine agent of the charterer, is not held liable to private respondent upon the contract of employment. Clearly,
the private respondent, and the other Filipino crew members of the vessel, would be defenseless against a breach of their
respective contracts. While wages of crew members constitute a maritime lien upon the vessel, private respondent is in no
position to enforce that lien. If only because the vessel, being one of foreign registry and not ordinarily doing business in the
Philippines or making regular calls on Philippine ports cannot be effectively held to answer for such claims in a Philippine
forum. Upon the other hand, it seems quite clear that petitioner Litonjua, should it be held liable to private respondent for the
latter's claims, would be better placed to secure reimbursement from its principal Fairwind. In turn, Fairwind would be in an
indefinitely better position (than private respondent) to seek and obtain recourse from Mullion, the foreign shipowner, should
Fairwind feel entitled to reimbursement of the amounts paid to private respondent through petitioner Litonjua.

We conclude that private respondent was properly regarded as an employee of the charterer Fairwind and that petitioner
Litonjua may be held to answer to private respondent for the latter's claims as the agent in the Philippines of Fairwind. We
think this result, which public respondent reached, far from constituting a grave abuse of discretion, is compelled by equitable
principles and by the demands of substantial justice. To hold otherwise would be to leave private respondent (and others who
may find themselves in his position) without any effective recourse for the unjust dismissal and for the breach of his contract
of employment.

WHEREFORE, the Petition for certiorari is DISMISSED and the Decision of the then National Seamen Board dated 31 May
1979 is hereby AFFIRMED. No pronouncement as to costs.

SO ORDERED.