THIRD DIVISION

March 15, 2017

G.R. No. 199810

BEVERLY ANNE C. YAP, Petitioner

vs
REPUBLIC OF THE PHILIPPINES, represented by THE REGIONAL EXECUTIVE DIRECTOR, DEPARTMENT OF ENVIRONMENT AND
NATURAL RESOURCES (DENR), Respondent

DECISION

REYES, J.:

This is a petition for review on certiorari1 seeking to annul and set aside the Decision2 dated June 30, 2011 and, Resolution3 dated November
14, 2011 of the Court of Appeals (CA) in CA-G.R. CV No. 01753-MIN which reversed and set aside the Decision4 dated October 24, 2008 of the
Regional Trial Court (RTC) of Davao City, Branch 16, in Civil Case No. 29,705-03, dismissing the complaint for reversion of a parcel of land.

Antecedent Facts

Consuelo Vda. de dela Cruz applied for free patent over a parcel of land constituting about 1,292 square meters, designated as Lot No. 9087,
Cad. 102, located in Daliao, Toril, Davao City. As she could not wait for the approval of her application, she executed a Deed of
Waiver/Quitclaim5 on November 25, 1981 in favor of Rollie Pagarigan (Pagarigan).6

Pagarigan filed his own Free Patent Application (FPA) 7 and subsequently, Free Patent No. (XI-1)5133 was issued to him over said lot.
Original Certificate of Title (OCT) No. P-111828 was thereby issued in his name on November 25, 1982.9

On September 5, 1989, Pagarigan mortgaged the lot to Banco Davao-Davao City Development Bank (the Bank). For failure to pay his loan, the
property was foreclosed, and was eventually sold to the Bank at public auction on October 26, 1990. These proceedings were duly annotated
in the title.10

However, the land covered by OCT No. P-11182 was allegedly occupied by Teodoro Valparaiso and Pedro Malalis (protestants). On October
24, 1990, the protestants filed a formal protest with the Bureau of Lands (Bureau). They prayed for the recall of the free patent issued to
Pagarigan, and for the institution of a corresponding action for reversion considering that they have been in adverse, exclusive, and
continuous occupation of the subject property since 1945, cultivating it, and planting various crops, nipa palms and coconut trees on said
land.11

On January 2 7, 1992, the protestants caused the annotation of a notice of lis pendens in OCT No. P-11182. Assigned as Entry No. 647677, said
notice of lis pendens pertained to Civil Case No. 20-435-912 instituted by the protestants against Pagarigan, Menardo Metran and Rene Galope
to enjoin them from demolishing the former's houses pending the determination of the Department of Environment and Natural Resources
(DENR) on the propriety of cancelling the title obtained by Pagarigan.13

The administrative protest of the protestants reached the Office of the Secretary of the DENR. On May 15, 1995, Secretary Angel C. Alcala
rendered a Decision14 against Pagarigan, the salient portion and the fallo of which read as follows:

From the Investigation Reports submitted by both the Department's Regional Office involved and this Office as well as from the other pieces
of evidence available, both documentary and testimonial, it is obvious that actual fraud and bad faith have been committed by [Pagarigan] in
his subject public land application which led to the issuance of the title. The following facts and circumstances are uncontroverted, to wit;
that the [protestants] have been in actual occupation of the land in dispute since 1945 and have introduced improvements thereon; that
[Pagarigan] never occupied the same nor his predecessor-in-interest, Consuelo dela Cruz, that [Pagarigan] misrepresented in his application
that he was the actual occupant and that there were no others who occupied the lot in dispute; that the title was issued sans an actual
ground survey; and that [Pagarigan] did not post a copy of his Notice for [FPA] on both the Bulletin Boards of Daliao and Lizardo as required
by law.

xxxx

WHEREFORE, the instant appeal is hereby given DUE COURSE and the subject Decision appealed from SET
ASIDE and REVOKED. Consequently, the Regional Executive Director (RED), DENR Region XI, Davao City, is hereby ordered to institute an
action for cancellation of Original Certificate of Title (OCT) No. V-11182 of the Registry of Deeds of Davao City covering Lot No. 9087, Cad-
102, and for the reversion of the property covered thereby to the government.

After the cancellation of the subject title and the land already reverted to the government, Regional. Executive. Director (RED) concerned
shall then order the ground survey of the land in dispute and give due course to the public land applications of the [protestants].

so ORDERED.15

Meanwhile, on November 5, 1992, without consolidating title over the land in its name, the Bank sold the subject property to herein
petitioner Beverly Anne C. Yap (Yap) and Rosanna F. Villamor (Villamor). Upon the execution of the deed of sale, OCT No. P-11182 was
delivered to them and Transfer Certificate of Title No. 366983 16 was eventually issued in the name ofYap and Villamor on December 16,
2003.17

On February 28, 1997, the Department of Transportation and Communication filed a complaint for expropriation of a portion of the subject
lot before the RTC of Davao City, Branch 13, docketed as Civil Case No. 25,084-97.18
On February 19, 2003, the RTC Branch 13 rendered its Decision.19 Confronted with the issue of who among the claimants shall be entitled to
just compensation, the trial court ruled in this wise:

WHEREFORE, it is the judgment of this court that[:]

1. The plaintiff is entitled to expropriate the land subject of this case for the purpose of road right of way to the Davao Fish Port, which is for
public use;

2. The just compensation for the land is ₱278,[000].00;

3. [Villamor and Yap] are the ones entitled to the payment of just compensation for the property subject of this case, and plaintiff is directed
to pay the said amount to the said defendants;

4. The Commissioner's Fee of ₱3,850.00 shall be paid by plaintiff to Asian Appraisal Company, Inc., and may be deducted from the just
compensation for the land being expropriated.

This case is now considered closed.

SO ORDERED.20

Ruling of the RTC

On May 22, 2003, the respondent, through the Office of the Solicitor General (OSG), filed the Complaint for Cancellation of Patent,
Nullification of Title and Reversion with the RTC of Davao City.21 The case was raffled to Branch 16 thereof.

On October 24, 2008, the RTC Branch 16 rendered a Decision22 dismissing the respondent's complaint. The court ruled that since the subject
land has already been sold to third persons, it must be shown that the latter were part of the fraud and/or misrepresentation committed by
the original grantee, or at least were aware of it. However, since the RTC Branch 13 already declared in its decision in Civil Case No. 25,084-
97 that Yap and Villamor were purchasers in good faith and for value of the land in question, RTC Branch 16 maintained that, as a court of
co-equal jurisdiction, it is bound by the said finding under the principle of conclusiveness of judgment. Moreover, the fact that it took the
respondent 26 years, from the issuance of the free patent before it instituted an action for reversion, militates against its cause. Thefallo of
the trial court's decision reads:

IN VIEW of the foregoing, judgment 1s hereby rendered dismissing the instant complaint.

Defendants' [sic] [Bank] and Pagarigan compulsory counterclaim[ s] are likewise dismissed in the absence of proof that there was malice or
bad faith on [the respondent's] part when it sought the reversion of the property.

The dismissal of the action necessarily carries with it the dismissal of defendant's [sic] [Bank] cross-claim against [Pagarigan].

SO ORD[E]RED.23

Ruling of the CA

The respondent elevated its case to the CA. On June 30, 2011 , the CA rendered the assailed Decision 24 reversing that of the trial court. In so
ruling, the CA adopted the findings of the DENR as to the commission of fraud by Pagarigan in his FPA, and held that neither the Bank nor
Yap and Villamor were innocent purchasers for value. Further, the CA maintained that the decision of the RTC Branch 13 did not
constitute res judicata insofar as the same has not yet attained finality. The fallo of the CA decision reads:

WHEREFORE, We GRANT the appeal and REVERSE the decision of the [RTC]. We declare Free Patent No. (XI-1)5133 and [OCT] No. P-11182
issued in the name of [Pagarigan], and [TCT] No. T-366983 in the name of [Yap] and [Villamar], and all subsequent [TCTs] derived
therefrom, as null and void. We order the reversion of Lot 9087, Cad. 102, [l]ocated in Daliao, ToriI, Davao City, to the mass of public domain.

SO ORDERED.25

The Bank,26 Yap,27 and Villamor28 sought reconsideration of the CA decision, but their motion was evenly denied in the Resolution 29 dated
November 14, 2011.

Hence this petition filed solely by Yap.

Yap propounds the following assignments of errors:

I. Whether or not the decision of the CA is not in accord with the applicable decision enunciated by the Court in the case of Spouses
Macadangdang v. Spouses Martinez;30

II. Whether or not the CA departed from the rule declared by the Court in the case of Saad Agro-Industries, Inc. v. Republic of the
Philippines,31 that in reversion proceedings the same must be proved by clear and convincing evidence, mere preponderance of evidence not
even being adequate; and

III. Whether or not the decision of the CA runs counter to the rule on res judicata.321âwphi1
Yap asserts that she and Villamor purchased the subject property in good faith and for value. She maintains that on its face, nothing appears
in OCT No. P-11182 indicating that some other person has a right to, or interest over the property covered thereby. As such, there was no
obligation on their part to look beyond the certificate of title to determine the legal condition of the concerned property.

Granting that a notice of lis pendens was annotated in OCT No. P- 11182 filed before the Register of Deeds of Davao City, the same, however,
was not offered in evidence and should not have been considered. Accordingly, the presumption that Yap and Villamor were purchasers in
good faith and for value was not effectively rebutted.

Moreover, in the case for expropriation heard before the RTC Branch 13, they were already adjudged as innocent purchasers for value.
Under the principle of res judicata, it was but proper for RTC Branch 16 to uphold said pronouncement. Accordingly, it was an error on the
part of the CA to reverse the same.

Invoking the Court's ruling in Saad Agro-Jndustries,33 Yap asserts that the respondent failed to discharge the burden of proving the alleged
fraud and misrepresentation which attended Pagarigan's FPA.

Ruling of the Court

Yap's contentions are untenable. The decision of the CA does not run counter to the rule on conclusiveness of judgment.

Yap asserts that the CA erred in setting aside the decision of RTC Branch 16 in violation of the rule on res judicata. It was a finding already
made by the RTC Branch 13, a co-equal branch that the land is now in the hands of innocent purchasers for value. Thus, the respondent's
complaint for reversion must be dismissed on the basis of the principle of conclusiveness of judgment.

The Court does not agree.

In a catena of cases, the Court discussed the doctrine of conclusiveness of judgment, as a concept of res judicata as follows:

The second concept - conclusiveness of judgment - states that a fact or question which was in issue in a former suit and was there judicially
passed upon and determined by a court of competent jurisdiction, is conclusively settled by the judgment therein as far as the parties to that
action and persons in privity with them are concerned and cannot be again litigated in any future action between such parties or their
privies, in the same court or any other court of concurrent jurisdiction on either the same or different cause of action, while the judgment
remains unreversed by proper authority. It has been held that in order that a judgment in one action can be conclusive as to a particular
matter in another action between the same parties or their privies, it is essential that the issue be identical. If a particular point or question is
in issue in the second action, and the judgment will depend on the determination of that particular point or question, a former judgment
between the same parties or their privies will be final and conclusive in the second if that same point or question was in issue and
adjudicated in the first suit x x x. Identity of cause of action is not required but merely identity of issue.

Justice Feliciano, in Smith Bell & Company (Phils.), Inc. v. Court of Appeals x x x, reiterated Lopez v. Reyes x x x in regard to the distinction
between bar by former judgment which bars the prosecution of a second action upon the same claim, demand, or cause of action, and
conclusiveness of judgment which bars the relitigation of particular facts or issues in another litigation between the same parties on a
different claim or cause of action.

The general rule precluding the re-litigation of material facts or questions which were in issue and adjudicated in former action are
commonly applied to all matters essentially connected with the subject matter of the litigation. Thus, it extends to questions necessarily
implied in the final judgment, although no specific finding may have been made in reference thereto and although such matters were directly
referred to in the pleadings and were not actually or formally presented. Under this rule, if the record of the former trial shows that the
judgment could not have been rendered without deciding the particular matter, it will be considered as having settled that matter as to all
future actions between the parties and if a judgment necessarily presupposes certain premises, they are as conclusive as the judgment
itself.34 (Emphasis and underlining ours, and emphasis in the original deleted)

In Nabus v. CA,35 the Court stressed that when a party seeks relief upon a cause of action different from the one asserted by him in a previous
one, the judgment in the former suit is conclusive only as to such points or questions as were actually in issue or adjudicated
therein.36 However, in Calalang v. Register of Deeds of Quezon City,37 the Court clarified that the bar on re-litigation of a matter or question
extends to those questions necessarily implied in the final judgment, although no specific finding may have been made in reference thereto,
and although those matters were directly referred to in the pleadings and were not actually or formally presented. 38 "If the record of the
former trial shows that the judgment could not have been rendered without deciding a particular matter, it will be considered as
having settled that matter as to all future actions between the parties."39 Verily, as developed, these principles now embody paragraph
(c) of Section 47, Rule 39 of the Rules of Court, which reads:

(c) In any other litigation between the same parties or their successors in interest, that only is deemed to have been adjudged in a former
judgment or final order which appears upon its face to have been so adjudged, or which was actually and necessarily included therein or
necessary thereto.

Guided by the foregoing, the Court finds that RTC Branch 16 falsely appreciated the decision of RTC Branch 13. The Court quotes the
pertinent portions of the Decision dated February 19, 2003 of the RTC Branch 13:

THE COURT'S RULING:

CLAIMS OF [THE PROTESTANTS]:

[The protestants] claim that the decision of the Secretary of the DENR in effect conferred ownership of the land to them, so that they should
be paid the compensation and not defendants Yap and Villamar. In fact, defendant Malalis had declared the property for taxation purposes,
and had paid the taxes thereon from the time they had occupied the land.

[The protestants] alleged that the land subject of this case is still in the name of [Pagarigan], and OCT No. P-11182 has not yet been cancelled
and transferred in the names of defendants Yap and Villamar, who never even set foot on the land, nor declared the land for taxation
purposes. The alleged sale of [the Bank] of the land to Yap and Villamor did not confer ownership of the land to them, because the land had
not been delivered to them by the owner, and they have not exercised ownership over the same. In short their claim of ownership is based
on a technicality, and no amount of technicality may serve as a solid foundation for the enjoyment of the fruits of fraud, [the protestants]
alleged.

CLAIMS OF DEFENDANTS YAP AND VILLAMOR:

Defendants Yap and Villamar for their part, dispute the claim of [the protestants]. They alleged that they were buyers in good faith of the
property, and in fact, the owner's copy of OCT No. P-11182 has been delivered to them by [the Bank]. They alleged that the title which was
issued to [Pagarigan] cannot be attacked collaterally as in this case. There should be a case filed in court to annul the title if indeed the same
was fraudulently issued. For as long as the title is not yet declared null and void, the same remains valid, and whoever succeeds to the same
is the owner of the land, they alleged. Moreover, since they are purchasers in good faith, and for value, they have a right to be protected,
defendants Yap and Villamar alleged.

THE COURT'S RULING:

The Decision of the Secretary of the DENR, in the case cited by [the protestants] cannot justify the court to declare that the title issued to
[Pagarigan] is void, and that [the protestants] are the owners of the property in question.

As correctly stated by defendants Yap and Villamar in their Memorandum, a Torrens title cannot be collaterally attacked. The title must be
attacked directly in a case filed in court specifically to annul the said title. The alleged fraud in the issuance of OCT No. P-11182 therefore
cannot be raised in this case, and the court will not consider the decision of the DENR Secretary to say that the title of [Pagarigan] is void,
and that the [protestants] are the owners of the land subject of this case.

Moreover, a Torrens title has the presumption of having been validly issued, and the defendants Yap and Villamor are not expected to look
beyond the title to determine its validity. They are purchasers in good faith and for value, and are therefore entitled to the protection of the
court.

Contrary to the allegation of [the protestants], there was in fact a valid delivery of the land to defendants Yap and Villamor. The execution of
a Deed of Sale in their favor by defendant [Bank], and delivery to them of the owner's copy of OCT No. P-11182 is a constructive delivery of
the property sold to them.

Although defendants Yap and Villamar had not taken actual physical possession of the property covered by OCT No. P-11182, the same did
not divest them of the ownership of the land covered by the said title. The occupation and possession of [the protestants] of the land in
question did not ripen into ownership because their occupation (even in the concept of an owner) cannot defeat a Torrens title. OCT No. P-
11182 is presumed to be valid until declared void by the courts.40

The foregoing shows that the question of whether or not Yap and Villamar are innocent purchasers was not an actual issue of fact in the case
before the RTC Branch 13, and which called for said court's adjudication. "An issue of fact is a point supported by one party's evidence and
controverted by another's."41 That Yap and Villamor were buyers in good faith is merely an allegation which was not proven in court. The
RTC Branch 13 did not actually make any clear pronouncement on the matter.

The expropriation proceeding was filed on February 28, 1997. The protestants caused the annotation of a notice of lis pendens on the original
copy of OCT No. P-11182 on January 27, 1992. Accordingly, if indeed the question on whether Yap and Villamar are buyers in good faith was
an actual issue of fact before the expropriation proc;eeding, the protestants could have easily controverted such claim by the mere
expedience of presenting a certified original copy of OCT No. P-11182. Forsooth, the notice at the back of a Torrens title serves as notice to
the whole world of the pending controversy over the land so registered.42

The RTC Branch 13 basically anchored its judgment on the indefeasibility of a Torrens title. Pursuant to the well-settled rule that a certificate
of title cannot be subject to collateral attack and can only be altered, modified, or cancelled in a direct proceeding in accordance with law,43 it
was clear that the trial court was without jurisdiction in an expropriation proceeding, to rule whether the title issued to Pagarigan is void -
notwithstanding the decision of the DENR Secretary. Thereupon, since the position of the protestants rests mainly on the validity of
Pagarigan's title which cannot be considered in the action, RTC Branch 13, in effect, posited that there was no legal way for it to rule
otherwise.

Accordingly, and as similarly advanced by the OSG in its Comment, the RTC Branch 13's pronouncement that Yap and Villamor were buyers
in good faith was, at best, a mere obiter dictum. Contrary to Yap's claim, there was nothing final or conclusive with the decision of the RTC
Branch 13 which the CA should be bound.

Neither the Bank, nor Yap and Villamor were purchasers in good faith and for value. Reversion of subject lot is in order.

"[F]actual findings of administrative or quasi-judicial bodies, which are deemed to have acquired expertise in matters within their respective
jurisdictions, are generally accorded not only respect but even finality, and bind the Court when supported by substantial evidence."44

The fact that Pagarigan fraudulently secured his free patent was duly established by the investigation conducted by the DENR through
Senior

Special Investigator Domingo Mendez. The decision of the DENR is very clear in this regard, thus:

From the Investigation Reports submitted by both the Department's Regional Office involved and this Office as well as from the other pieces
of evidence available, both documentary and testimonial, it is obvious that actual fraud and bad faith have been committed by [Pagarigan] in
his subject public land application which led to the issuance of the title. The following facts and circumstances are uncontroverted, to wit;
that the [protestants] have been in actual occupation of the land in di spute since 1945 and have introduced improvements thereon; that
[Pagarigan] never occupied the same nor his predecessor-in-interest, Consuelo de la Cruz; that [Pagarigan] misrepresented in his application
that he was the actual occupant and that there were no others who occupied the lot in dispute; that the title was issued sans an actual
ground survey; and that [Pagarigan] did not post a copy of his Notice for [FPA] on both the Bulletin Boards of Daliao and Lizardo as required
by law.45 (Emphasis ours)

Thus, the DENR ordered for the institution of the present action seeking the cancellation of the certificate of title issued in the name of
Pagarigan, and for the reversion of the land covered thereby to the government.

However, as adverted to above, Section 32 of Presidential Decree No. 1529 mandates that for a reversion case to prosper, it is not enough to
prove that the original grantee of a patent has obtained the same through fraud; it must also be proven that the subject property has not yet
been acquired by an innocent purchaser for value, because fraudulent acquisition cannot affect the titles of the latter.

Henceforth, the ultimate resolution of this case boils down to the determination on whether the subsequent conveyances of the subject lot
from Pagarigan were made to innocent purchasers for value. Specifically, based on the records, can we regard the Bank, and thereafter, Yap
and Villamor as innocent purchasers for value?

The Court answers in the negative.

Verily, the Court is in full accord with the following disquisitions of the CA on the matter, thus:

It cannot be overemphasized that [the Bank], being in the business of extending loans secured by real estate mortgage, is familiar with rules
on land registration. As such, it was, as here, expected to exercise more care and prudence than private individuals in its dealings with
registered lands. Accordingly, given inter alia the suspicion-provoking presence of occupants other than the owner on the land to be
mortgaged, it behooved them to conduct a more exhaustive investigation on the history of the mortgagor's title. That appellee Bank accepted
in mortgage the property in question notwithstanding the existence of structures on the property and which were in actual, visible, and
public possession of persons other than the mortgagor, constitutes gross negligence amounting to bad faith.46(Citation omitted)

Yap and Villamor are not innocent purchasers for value.

As pointed out by the CA, the respondent argued that at the time Yap and Villamar purchased the said lot from the Bank, a notice of lis
pendens was already annotated on OCT No. P-11182; hence, they cannot be considered as innocent purchasers for value. Yap and Villamor,
on the other hand, contended that the owner's duplicate copy they received from the Bank did not contain any annotations of encumbrance
or liens; hence, they cannot be bound by such annotation.47

In the present petition, Yap maintains that the presumption that she and Villamor are buyers in good faith and for value has not been
rebutted. She adds that even if it is assumed, for the sake of argument, that their predecessor-in-interest committed fraud and
misrepresentation, their title as innocent purchasers and for value will not in any way be affected. 48

This Court cannot sanction Yap's assertion. Time and again, the Court has ruled that the burden of proof to establish the status of a
purchaser and registrant in good faith lies upon the one who asserts it. This onus probandi cannot be discharged by mere invocation of the
legal presumption of good faith.49

It must be emphasized that aside from the fact that a notice of lis pendens was already annotated on OCT No. P-11182 even before Yap and
Villamar purchased the subject property, it was also established that when they did so, the said property was still registered in the name of
Pagarigan since the Bank did not consolidate its title thereto.50Stated simply, Yap and Villamor purchased the subject property not
from the registered owner.

In Trifonia D. Gabutan, et al. v. Dante D. Nacalaban, et al.,51 the Court held that:

A buyer for value in good Faith is one who buys property of another, without notice that some other person has a right to, or interest in, such
property and pays full and fair price for the same, at the time of such purchase, or before he has notice of the claim or interest of some other
persons in the property. He buys the property with the well-founded belief that the person from whom he receives the thing had title to the
property and capacity to convey it.

To prove good faith, a buyer of registered and titled land need only show that he relied on the face of the title to the property. He need not
prove that he made further inquiry for he is not obliged to explore beyond the four comers of the title. Such degree of proof of good faith,
however, is sufficient only when the following conditions concur: first, the seller is the registered owner of the land; second, the latter is in
possession thereof; and third, at the time of the sale, the buyer was not aware of any claim or interest of some other person in the property,
or of any defect or restriction in the title of the seller or in his capacity to convey title to the property.

Absent one or two of the foregoing conditions, then the law itself puts the buyer on notice and obliges the latter to exercise a higher degree
of diligence by scrutinizing the certificate of title and examining all factual circumstances in order to determine the seller's title and capacity
to transfer any interest in the property. Under such circumstance, it is no longer sufficient for said buyer to merely show that he relied on the
face of the title; he must now also show that he exercised reasonable precaution by inquiring beyond the title. Failure to exercise such degree
of precaution makes him a buyer in bad faith.52 (Emphasis and italics in the original)

Verily, as the Court held in a catena of cases:

[T]he law protects to a greater degree a purchaser who buys from the registered owner himself. Corollarily, it requires a higher degree of
prudence from one who buys from a person who is not the registered owner, although the land object of the transaction is registered. While
one who buys from the registered owner does not need to look behind the certificate of title, one who buys from one who is not the
registered owner is expected to examine not only the certificate of title but all factual circumstances necessary for him to determine if there
are any flaws in the title of the transferor, or in his capacity to transfer the land.

This Court has consistently applied the stricter rule when it comes to deciding the issue of good faith of one who buys from one who is not
the registered owner, but who exhibits a certificate of title.53(Emphasis in the original)
Neither estoppel nor laches lies
against the respondent m the
present case

Citing the cases of Saad Agro-Jndustries54 and Republic of the Philippines v. CA,55 the RTC Branch 16 opined that in an action for reversion, the
defenses of equitable estoppel, laches and Torrens System in land titles are available - without, however, stating that the foregoing also
applies in this case, and how.

In any event, neither of said cases is on all fours with the present case. Said cases did not dwell on whether an FPA was granted through the
employment of fraud and/or misrepresentation, nor the question of whether the concerned properties were conveyed to innocent
purchasers.

In Saad Agro-Industries, free patent was alleged to have been mistakenly issued over a property that was claimed by therein respondent as
inalienable for being part of a track of land classified as forest land. However, it was established that government has not yet classified the lot
in question as forest reserve prior to the issuance of the concerned free patent. Moreover, it was also established that therein subject
property was already conveyed to an innocent purchaser for value, Saad Agro-Industries, Inc. before the action for reversion was instituted.

In Republic of the Philippines v. CA,56 therein petitioner instituted an action to annul the certificates of title that were issued on the basis of a
null and void subdivision plan. While therein petitioner sufficiently proved that the actual area of the disputed property was unduly enlarged
in the said subdivision plan, it, however, presented no proof that therein respondent committed fraud when it submitted the subdivision
plan to the Land Registration Commission for approval. Since the plan was presumed to have been subjected to investigation, study and
verification by said commission, there was no one to be blamed except therein petitioner, acting through said body, itself. Thus, for having
allowed and approved the subdivision plan, the government was held to be in estoppel to question the same, and seek the annulment of titles
issued pursuant thereto. Moreover, when the action was instituted, the subdivided properties were already sold to innocent purchasers for
value. Additionally, although therein petitioner asserted that the action was instituted to protect the integrity of the Torrens System, it was,
however, unjustifiable that it took nearly 20 years before therein petitioner acted on the matter. Verily, therein petitioner's prolonged
inaction was held as tantamount to laches.

In the instant case, it was established that Pagarigan's FPA was secured on the basis of his fraudulent representations.1âwphi1 The
respondent cannot be faulted for having been misled into believing that an applicant is legally qualified to be granted free patent as to render
it estopped from asserting its right to recover its own property. While the action for reversion was instituted only in 2003, the circumstances
leading to the institution of the case hardly spells inaction or neglect on the part of the respondent as to be considered guilty of laches.

Forsooth, there was no prolonged inaction on the part of the respondent in this case. This can be gleaned in the decision 57 of the DENR
Secretary. Shortly after the protestants filed a formal protest with the Bureau on October 24, 1990, the Officer-in-Charge, Regional Executive
Director (RED) of the DENR Region XI, Davao City immediately ordered an investigation on November 15, 1990, 58 and the same commenced
on November 19, 1990. On February 14, 1994, the RED issued a decision dismissing the protestants' protest.59 Undaunted, the protestants
elevated their case to the Office of the DENR Secretary. On May 15, 1995, the DENR Secretary set-aside the RED's decision and ordered the
institution of appropriate action for the cancellation of OCT No. P-11182, and for the reversion of the property covered thereby to the
government.

The instant action does not

undermine the indefeasibility of
Torrens title

In the case of Lorzano v. Tabayag, Jr.,60 the Court reiterated that a Torrens title emanating from a free patent which was secured through
fraud does not become indefeasible because the patent from whence the title sprung is itself void and of no effect whatsoever. Thus:

Once a patent is registered and the corresponding certificate of title is issued, the land covered thereby ceases to be part of public domain
and becomes private property, and the Torrens Title issued pursuant to the patent becomes indefeasible upon the expiration of one year
from the date of such issuance. However, a title emanating from a free patent which was secured through fraud does not become
indefeasible, precisely because the patent from whence the title sprung is itself void and of no effect whatsoever. 61

On this point, the Court's ruling m Republic v. Heirs of Felipe Alejaga, Sr.62 is instructive:

True, once a patent is registered and the corresponding certificate of title [is] issued, the land covered by them ceases to be part of the public
domain and becomes private property. Further, the Torrens Title issued pursuant to the patent becomes indefeasible a year after the
issuance of the latter. However, this indefeasibility of a title does not attach to titles secured by fraud and misrepresentation. Well-settled is
the doctrine that the registration of a patent under the Torrens System does not by itself vest title; it merely confirms the registrant's already
existing one. Verily, registration under the Torrens System is not a mode of acquiring ownership. 63 (Citations omitted)

A fraudulently acquired free patent

may only be assailed by the
government m an action for
reversion

Nonetheless, a free patent that was fraudulently acquired, and the certificate of title issued pursuant to the same, may only be assailed by the
government in an action for reversion, pursuant to Section 101 of the Public Land Act. In Sherwill Development Corporation v. Sitio Sta. Nino
Residents Association, Inc.,64 the Court pointed out that:

It is also to the public interest that one who succeeds in fraudulently acquiring title to a public land should not be allowed to benefit
therefrom, and the State should, therefore, have an even existing authority, thru its duly-authorized officers, to inquire into the
circumstances surrounding the issuance of any such title, to the end that the Republic, thru the Solicitor General or any other officer who
may be authorized by Jaw, may file the corresponding action for the reversion of the land involved to the public domain, subject thereafter to
disposal to other qualified persons in accordance with law. In other words, the indefeasibility of a title over land previously public is not a
bar to an investigation by the Director of Lands as to how such title has been acquired, if the purpose of such investigation 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.65

WHEREFORE, the petition is hereby DENIED. The Decision dated June 30, 2011 and Resolution dated November 14, 2011 of the Court of
Appeals in CA-GR. CV No. 01753-MIN are AFFIRMED.

SO ORDERED.
 THIRD DIVISION

G.R. No. 204369 September 17, 2014

ENRIQUETA M. LOCSIN, Petitioner,

vs.
BERNARDO HIZON, CARLOS HIZON, SPS. JOSE MANUEL & LOURDES GUEVARA, Respondents.

DECISION

VELASCO, JR., J.:

Nature of the Case

Before Us is a Petition for Review on Certiorari under Rule 45 assailing the Decision 1 and Resolution of the Court of Appeals (CA), dated June
6, 2012 and October 30, 2012, respectively, in CA-G.R. CV No. 96659 entitled Enriqueta M Locsin v. Marylou Bolos, et al. In reversing the
ruling of the trial court, the CA held that respondents are innocent purchasers in good faith and for value of the subject property.

The Facts

Petitioner Enriqueta M. Locsin (Locsin) was the registered owner of a 760-sq.m. lot covered by Transfer Certificate of Title (TCT) No.
235094, located at 49 Don Vicente St., Don Antonio Heights Subdivision, Brgy. Holy Spirit, Capitol, Quezon City. In 1992, she filed an
ejectment case, Civil Case No. 38-6633,2 against one Billy Aceron (Aceron) before the Metropolitan Trial Court, Branch 3 8 in Quezon City
(MTC) to recover possession over the land in issue. Eventually, the two entered into a compromise agreement, which the MTC approved on
August 6, 1993.3

Locsin later went to the United States without knowing whether Aceron has complied with his part of the bargain under the compromise
agreement. In spite of her absence, however, she continued to pay the real property taxes on the subject lot.

In 1994, after discovering thather copy of TCT No. 235094 was missing, Locsin filed a petition for administrative reconstruction in order to
secure a new one, TCT No. RT-97467. Sometime in early 2002, she then requested her counsel to check the status of the subject lot. It was
then that they discovered the following:

1. One Marylou Bolos (Bolos) had TCT No. RT-97467 cancelled on February 11, 1999, and then secured a new one, TCT No. N-
200074, in her favor by registering a Deed of Absolute Sale dated November 3, 1979 allegedly executed by Locsin with the Registry
of Deeds;

2. Bolos later sold the subject lot to Bernardo Hizon (Bernardo) for PhP 1.5 million, but it was titled under Carlos Hizon’s (Carlos’)
name on August 12, 1999. Carlos is Bernardo’s son;

3. On October 1, 1999, Bernardo, claiming to be the owner of the property, filed a Motion for Issuance of Writ of Execution for the
enforcement of the court-approved compromise agreement in Civil Case No. 38-6633;

4. The property was already occupied and was, in fact, up for sale.

On May 9, 2002, Locsin, through counsel, sent Carlos a letter requesting the return of the property since her signature in the purported deed
of sale in favor of Bolos was a forgery. In a letter-reply dated May 20, 2002, Carlos denied Locsin’s request, claiming that he was unaware of
any defect or flaw in Bolos’ title and he is, thus, an innocent purchaser for value and good faith. On June 13, 2002, 4 Bernardo met with
Locsin’s counsel and discussed the possibility of a compromise. He ended the meeting with a promise to come up with a win-win situation
for his son and Locsin, a promise which turned out to be deceitful, for, on July 15, 2002, Locsin learned that Carlos had already sold the
property for PhP 1.5 million to his sister and her husband, herein respondents Lourdes and Jose Manuel Guevara (spouses Guevara),
respectively, who, as early as May 24, 2002, had a new certificate of title, TCT No. N-237083, issued in their names. The spouses Guevara
then immediately mortgaged the said property to secure a PhP 2.5 million loan/credit facility with Damar Credit Corporation (DCC).

It was against the foregoing backdrop of events that Locsin filed an action for reconveyance, annulment ofTCT No. N-237083, the
cancellation of the mortgage lien annotated thereon, and damages, against Bolos, Bernardo, Carlos, the Sps. Guevara, DCC, and the Register of
Deeds, Quezon City, docketed as Civil Case No. Q-02-47925, which was tried by the Regional Trial Court, Branch 77 in Quezon City (RTC).
The charges against DCC, however, weredropped on joint motion ofthe parties. This is in view of the cancellation of the mortgage for failure
of the spouses Guevara to avail of the loan/credit facility DCC extended in their favor.5

Ruling of the Trial Court

On November 19, 2010, the RTC rendered a Decision6 dismissing the complaint and finding for respondents,as defendants thereat, holding
that: (a) there is insufficient evidence to showthat Locsin’s signature in the Deed of Absolute Sale between her and Bolos is a forgery; (b) the
questioned deed is a public document, having been notarized; thus, it has, in its favor, the presumption of regularity; (c) Locsin cannot
simply rely on the apparent difference of the signatures in the deed and in the documents presented by her to prove her allegation of
forgery; (d) the transfers of title from Bolos to Carlos and from Carlos to the spouses Guevara are valid and regular; (e) Bernardo, Carlos, and
the spouses Guevara are all buyers in good faith. Aggrieved, petitioner appealed the case to the CA.

Ruling of the Court of Appeals

The CA, in its assailed Decision, ruled that it was erroneous for the RTC to hold that Locsin failed to prove that her signature was forged. In
its appreciation of the evidence, the CA found that, indeed, Locsin’s signature in the Deed of Absolute Sale in favor of Bolos differs from her
signatures in the other documents offered as evidence.
The CA, however, affirmed the RTC’s finding that herein respondents are innocent purchasers for value. Citing Casimiro Development Corp.
v. Renato L. Mateo,7 the appellate court held that respondents, having dealt with property registered under the Torrens System, need not go
beyond the certificate of title, but only has to rely on the said certificate. Moreover, as the CA added, any notice of defect or flaw in the title of
the vendor should encompass facts and circumstances that would impel a reasonably prudent man to inquire into the status of the title of
the property in order to amount to bad faith.

Accordingly, the CA ruled that Locsin can no longer recover the subject lot.8 Hence, the insant petition.

Arguments

Petitioner Locsin insists that Bernardo was well aware, at the time he purchased the subject property, of a possible defect in Bolos’ title since
he knew that another person, Aceron, was then occupying the lot in issue.9 As a matter of fact, Bernardo even moved for the execution of the
compromise agreement between Locsin and Aceron inCivil Case No. 38-6633 in order to enforce to oust Aceron of his possession over the
property.10

Thus, petitioner maintains that Bernardo, knowing as he did the incidents involving the subject property,should have acted as a reasonably
diligent buyer in verifying the authenticity of Bolos’title instead of closing his eyes to the possibility of a defecttherein. Essentially, petitioner
argues that Bernardo’s stubborn refusal to make an inquiry beyond the face of Bolos’ title is indicative of his lack of prudence in protecting
himself from possible defects or flaws therein, and consequently bars him from interposing the protection accorded toan innocent purchaser
for value.

As regards Carlos and the Sps. Guevara’s admissions and testimonies, petitioner points out that when these are placed side-by-side with the
concurrent circumstances in the case, it is readily revealed that the transfer from the former to the latter was only simulated and intended to
keep the property out of petitioner’s reach.

For their part, respondents maintain that they had the right to rely solely upon the face of Bolos’ clean title, considering that it was free from
any lien or encumbrance. They are not even required, so they claim, to check on the validity of the sale from which they derived their
title.11 Too, respondents claim that their knowledge of Aceron’s possession cannot be the basis for an allegation of bad faith, for the property
was purchased on an "asis where-is" basis. The Issue

Considering that the finding of the CAthat Locsin’s signature in the Deed of Absolute Sale in favor of Bolos was indeed bogus commands itself
for concurrence, the resolution of the present petition lies on this singular issue––whether or not respondents are innocent purchasers for
value.12

The Court’s Ruling

The petition is meritorious.

Procedural issue

As a general rule, only questions of law may be raised in a petition for review on certiorari. 13 This Court is not a trier offacts; and in the
exercise of the power of review, we do not normally undertake the re-examination of the evidence presented by the contending parties
during the trial of the case.14 This rule, however, admits of exceptions.For one, the findings of fact of the CA will not bind the parties in cases
where the inference made on the evidence is mistaken, as here.15

That being said, we now proceed to the core of the controversy.

Precautionary measures for buyers of real property

An innocent purchaser for value is one who buys the property of another without notice that some other person has a right to or interest in
it, and who pays a full and fair price atthe time of the purchase or before receiving any notice of another person’s claim. 16 As such, a defective
title–– or one the procurement of which is tainted with fraud and misrepresentation––may be the source of a completely legal and valid title,
provided that the buyer is an innocent third person who, in good faith, relied on the correctness of the certificate of title, or an innocent
purchaser for value.17

Complementing this is the mirror doctrine which echoes the doctrinal rule that every person dealing with registered land may safely rely on
the correctness of the certificate of title issued therefor and is in no way obliged to go beyond the certificate to determine the condition of
the property.18 The recognized exceptions to this rule are stated as follows:

[A] person dealing with registeredland has a right to rely on the Torrens certificate of title and to dispense with the need of inquiring further
except when the party has actual knowledge of facts and circumstances that would impel a reasonably cautious man to make such inquiry or
when the purchaser has knowledge of a defect or the lack of title in his vendor or of sufficient facts to induce a reasonably prudent man to
inquire into the status of the title of the property in litigation. The presence of anything which excites or arouses suspicion should then
prompt the vendee to look beyond the certificate and investigate the title of the vendor appearing on the face of said certificate. One who
falls within the exception can neither be denominated an innocent purchaser for value nor a purchaser in good faith and, hence, does not
merit the protection of the law.19 (emphasis added)

Thus, in Domingo Realty, Inc. v. CA,20 we emphasized the need for prospective parties to a contract involving titled lands to exercise the
diligence of a reasonably prudent person in ensuring the legality of the title, and the accuracy of the metes and bounds of the lot embraced
therein, by undertaking precautionary measures, such as:

1. Verifying the origin, history, authenticity, and validity of the title with the Office of the Register of Deeds and the Land
Registration Authority;
 2. Engaging the services of a competent and reliable geodetic engineer to verify the boundary,metes, and bounds of the lot subject
of said title based on the technical description in the said title and the approved survey plan in the Land Management Bureau;

3. Conducting an actual ocular inspection of the lot;

4. Inquiring from the owners and possessors of adjoining lots with respect to the true and legal ownership of the lot in question;

5. Putting up of signs that said lot is being purchased, leased, or encumbered; and

6. Undertaking such other measures to make the general public aware that said lot will be subject to alienation, lease, or
encumbrance by the parties.

In the case at bar, Bolos’ certificate of title was concededly free from liens and encumbrances on its face. However, the failure of Carlos and
the spouses Guevara to exercise the necessary level ofcaution in light of the factual milieu surrounding the sequence of transfers from Bolos
to respondents bars the application of the mirror doctrine and inspires the Court’s concurrence withpetitioner’s proposition.

Carlos is not an innocent purchaser for value

Foremost, the Court is of the view that Bernardo negotiated with Bolos for the property as Carlos’ agent. This is bolstered by the fact that he
was the one who arranged for the saleand eventual registration of the property in Carlos’ favor. Carlos testified during the May 27, 2009
hearing:21

Q: Are you privy with the negotiations between your father, Mr. Bernardo Hizon, and your co-defendant, Marylou Bolos, the alleged seller?

A: No, Ma’am.

Q: Do you remember having signed a Deed of Absolute Sale, dated August 12, 1999?

A: Yes, Ma’am.

Q: And, at that time that you have signed the Deed, was Marylou Bolos present?

A: No, Ma’am.

Q: Who negotiated and arranged for the sale of the property between Marylou Bolos and you? A: It was my father. (emphasis ours)

Consistent with the rule that the principal is chargeable and bound by the knowledge of, or notice to, his agent received in that
capacity,22 any information available and known to Bernardo is deemed similarly available and known to Carlos, including the following:

1. Bernardo knew that Bolos, from whom he purchased the subject property, never acquired possession over the lot. As a matter of
fact, in his March 11, 2009 direct testimony,23 Bernardo admitted having knowledge of Aceron’s lot possession as well as the
compromise agreement between petitioner and Aceron.

2. Bolos’ purported Deed of Sale was executed on November 3, 1979 but the ejectment case commenced by Locsin against Aceron
was in 1992, or thirteen (13)years after the property was supposedly transferred to Bolos.

3. The August 6, 1993 Judgment,24 issued by the MTC on the compromise agreement between Locsin and Aceron, clearly stated
therein that "[o]n August 2, 1993,the parties [Aceron and Locsin] submitted to [the MTC] for approval a Compromise Agreement
dated July 28, 1993." It further indicated that "[Aceron] acknowledges [Locsin’s] right of possessionto [the subject property], being
the registered owner thereof."

Having knowledge of the foregoing facts, Bernardo and Carlos, to our mind, should have been impelled to investigate the reason behind the
arrangement. They should have been pressed to inquire into the status of the title of the property in litigation in order to protect Carlos’
interest. It should have struck them as odd that it was Locsin, not Bolos, who sought the recovery of possession by commencing an ejectment
case against Aceron, and even entered into a compromiseagreement with the latter years afterthe purported sale in Bolos’ favor. Instead,
Bernardo and Carlos took inconsistent positions when they argued for the validity of the transfer of the property in favor of Bolos, but in the
same breath prayed for the enforcement of the compromise agreement entered into by Locsin.

At this point it is well to emphasize that entering into a compromise agreement is an act of strict dominion. 25 If Bolos already acquired
ownership of the property as early as 1979, it should have been her who entered into a compromise agreement with Aceron in 1993, not her
predecessor-in-interest, Locsin, who, theoretically, had already divested herself of ownership thereof.

The spouses Guevara are not innocent purchasers for value

As regards the transfer of the property from Carlos to the spouses Guevara, We find the existence of the sale highly suspicious. For one, there
is a dearth of evidence to support the respondent spouses’ position that the sale was a bona fide transaction. Evenif we repeatedly sift
through the evidence on record, still we cannot findany document, contract, or deed evidencing the sale in favor of the spouses Guevara. The
same goes for the purported payment of the purchase price of the property in the amount of PhP 1.5 million in favor of Carlos. As a matter of
fact, the only documentary evidence that they presented were as follows:

1. Deed of Sale between Locsin and Bolos;

2. TCT No. 200074 issued in Bolos’ name;

 3. TCT No. N-205332 in Carlos’ name;

4. TCT No. N-237083 in the nameof the Sps. Guevara.

To bridge the gap in their documentary evidence, respondents proffer their own testimonies explaining the circumstances surrounding the
alleged sale.26 However, basic is the rule that bare and self-serving allegations, unsubstantiated by evidence, are not equivalent to proof
under the Rules.27 As such, we cannot give credence to their representations that the sale between them actually transpired.

Furthermore, and noticeably enough,the transfer from Carlos to the spouses Guevara was effected only fifteen(15) days after Locsin
demanded the surrender of the property fromCarlos. Reviewing the timeline:

May 9, 2002: Locsin’s counsel sent a letter to Carlos, requesting that he return the property to Locsin since the latter’s signature in the
purported deed of sale between her and Bolos was a forgery.

May 20, 2002:Carlos’ counsel replied to Locsin’s May 9, 2002 letter, claiming that Carlos was unaware of any defect or flaw in Bolos’ title,
making him an innocent purchaserof the subject property.

May 24, 2002: The Sps. Guevara allegedly purchased the property from Carlos.

When Bernardo met with Locsin’scounsel on June 13, 2002, and personally made a commitment to comeup with a win-win situation for his
son and Locsin, he knew fully well, too,that the property had already been purportedly transferred to his daughter and son-in-law, the
spouses Guevara, for he, no less, facilitated the same. This, to us, isglaring evidence of bad faith and an apparent intention to mislead Locsin
into believing that she could no longer recover the subject property.

Also, the fact that Lourdes Guevara and Carlos are siblings, and that Carlos’ agent in his dealings concerning the property is his own father,
renders incredible the argument thatLourdes had no knowledge whatsoever of Locsin’s claim of ownership atthe time of the purported sale.

Indeed, the fact that the spouses Guevara never intended to be the owner in good faith and for value of the lot is further made manifest by
their lack of interest in protecting themselvesin the case. It does not even appear in their testimonies that they, at the very least, intended to
vigilantly protect their claim over the property and prevent Locsin take it away from them. What they did was to simply appoint Bernardo as
their attorney-in-fact to handle the situation and never bothered acquainting themselves with the developments in the case. 28 To be sure,
respondent Jose Manuel Guevara was not even presented asa witness in the case.

There is also strong reason to believethat even the mortgage in favor of DCC was a mere ploy tomake it appear that the Sps. Guevara
exercised acts of dominion over the subject property. This is so considering the proximity between the property’s registration in their names
and its being subjected to the mortgage. Most telling is that the credit line secured by the mortgage was never used by the spouses, resulting
in the mortgage’s cancellation and the exclusion of DCC as a party in Civil Case No. Q-02-47925.1âwphi1

These circumstances, taken altogether, strongly indicate that Carlos and the spouses Guevara failed to exercise the necessary level of caution
expected of a bona fide buyer and even performed acts that are highly suspect. Consequently, this Court could not give respondents the
protection accorded to innocent purchasers in good faith and for value.

Locsin is entitled to nominal damages

We now delve into petitioner’s prayer for exemplary damages, attorney’s fees, and costs of suit. Here, the Court notes that petitioner failed to
specifically pray that moral damages be awarded. Additionally, she never invoked any of the grounds that would have warranted the award
of moral damages. As can be gleaned from the records, lacking from her testimony is any claim that she suffered any form of physical
suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, or any other
similar circumstance.29 Thus, we are constrained to refrain from awarding moral damages in favor of petitioner.

In the same vein, exemplary damages cannot be awarded in favor of petitioner. Well-settled that this species of damages is allowed only in
addition to moral damages such that no exemplary damages can be awarded unless the claimant first establishes his clear right to moral
damages.30 Consequently, despite our finding that respondents acted in a fraudulent manner, petitioner’s claim for exemplary damages is
unavailing at this point.

Nevertheless, we find an award for nominal damages to be in order. Under prevailing jurisprudence, nominal damages are "recoverable
where a legal right is technically violated and must be vindicated against an invasion that has produced no actual present loss of any kind or
where there has been a breach of contract and no substantial injury or actual damages whatsoever have been or can be shown." 31 As
expounded in Almeda v. Cariño,32 a violation of the plaintiff’s right, even if only technical, is sufficient to support an award of nominal
damages. So long as there is a showing of a violation of the right of the plaintiff, as herein petitioner, an award of nominal damages is
proper.33

In the case at bar, this Court recognizes that petitioner was unduly deprived of her ownership rights overthe property, and was compelled to
litigate for its recovery, for almost ten (10) years. Clearly, this could have entitled her to actual or compensatory damages had she quantified
and proved, during trial, the amounts which could have accrued in her favor, including commercial fruits such as reasonable rent covering
the pendency of the case. Nonetheless, petitioner’s failure to prove actual or compensatory damages does not erase the fact that her
property rights were unlawfully invaded by respondents, entitling her to nominal damages.

As to the amount to be awarded, it bears stressing that the same is addressed to the sound discretion ofthe court, taking into account the
relevant circumstances.34 Considering the length of time petitioner was deprived of her property and the bad faith attending respondents’
actuations in the extant case, we find the amount of seventy-five thousand pesos (PhP 75,000) as sufficient nominal damages. Moreover,
respondents should be held jointly and severally liable for the said amount, attorney’s fees in the amount of an additional seventy-
fivethousand pesos (PhP 75,000), and the costs of the suit.

WHEREFORE, in light of the foregoing, the Petition is hereby GRANTED. The assailed Decision of the Court of Appeals dated June 6, 2012 in
CA-G.R. CV No. 96659 affirming the Decision of the Regional Trial Court, Branch 77, Quezon City, in Civil Case No. Q-02-47925; as well as its
Resolution dated October 30, 2012, denying reconsideration thereof, are hereby REVERSED and SET ASIDE. TCT No. N-200074 in the name
of Marylou Bolos, and the titles descending therefrom, namely, TCT Nos. N-205332 and N-237083 in the name of Carlos Hizon, and the
Spouses Jose Manuel & Lourdes Guevara, respectively, are hereby declared NULL and VOID. Respondents and all other persons acting under
their authority are hereby DIRECTED to surrender possession of the subject property in favor of petitioner. Respondents Bernardo Hizon,
Carlos Hizon, and the spouses Jose Manuel and Lourdes Guevara shall jointly and severally pay petitioner PhP 75,000 as nominal damages,
PhP 75,000 as attorney's fees, and costs of suit.

The Register of Deeds of Quezon City is hereby ORDERED to (1) cancel TCT No. N-237083; (2) reinstate TCT No. RT-97467; and (3) reissue
TCT No. RT-97467 in favor of petitioner, without requiring from petitioner payment for any and all expenses in performing the three acts.

SO ORDERED.
 SECOND DIVISION

JEAN TAN, ROSELLER C. ANACINTO, CARLO LOILO ESPINEDA G.R. No. 193443
and DAISY ALIADO MANAOIS, represented in this act by
their Attorney-in-Fact, Present:
MA. WILHELMINA E. TOBIAS,
Petitioners, CARPIO, J.,
Chairperson,
BRION,
- versus PEREZ,
SERENO, and
REYES, JJ.
REPUBLIC OF THE PHILIPPINES,
Respondent. Promulgated:

April 16, 2012

x----------------------------------------------------------------------------------------x

RESOLUTION

REYES, J.:

This is a petition for review under Rule 45 of the Decision[1] dated July 6, 2009 and Resolution[2] dated August 12, 2010 Resolution of the

Court of Appeals (CA) in CA-G.R. CV No. 88995. The facts leading to its filing are as follows:

On June 14, 2001, the petitioners filed with the Regional Trial Court (RTC) of Naic, Cavite, an application for land registration covering a

parcel of land identified as Lot 9972, Cad-459-D of Indang Cadastre, situated in Barangay Bancod, Indang, Cavite and with an area of 6,920

square meters.[3] The petitioners alleged that they acquired the subject property from Gregonio Gatdula pursuant to a Deed of Absolute Sale

dated April 25, 1996; and they and their predecessors-in-interest have been in open, continuous and exclusive possession of the subject

property in the concept of an owner for more than 30 years.[4]

After trial and hearing, the RTC issued a Decision on July 29, 2006, granting the petitioners application, thus:

WHEREFORE, in view of the foregoing, this Court confirming its previous Order of general default, decrees and
adjudges Lot No. 9972 consisting of 6,920 square meters, Cad. 459-D, Indang Cadastre and its technical description as
herein above-described situated in Brgy. Bancod, Indang, Cavite, pursuant to the provisions of Act 496 as amended by P.D.
1529, as it is hereby decreed and adjudged to be confirmed and registered in the names of Jean Tan, of legal age, Filipino,
single, with postal address at Room 54 T. Pinpin St., Binondo, Manila; Roseller C. Anaci[n]to, of legal age, Filipino, single,
with postal address at Moncario Villag[e], Ampid-1, San Mateo, Rizal; Carlo Loilo Espineda, of legal age, Filipino, with
postal address at Cluster F. Cogeo, Antipolo, Rizal and Daisy Aliado Manaois, of legal age, Filipino and resident of Panghulo
Road, Malabon, Metro Manila.

Once this decision becomes final, let the corresponding decree of registration be issued by the Administrator,
Land Registration Authority.

SO ORDERED.[5]

The CA gave due course to the appeal filed by the Republic of the Philippines. By way of the assailed Decision, the CA ruled that the

petitioners failed to prove that they and their predecessors-in-interest have been in possession of the subject property for the requisite

period of 30 years. The CA posit:

We now determine if appellees have the right to register their title on such land despite the fact that their
possession commenced only after 12 June 1945. Records show that the appellees possession over the subject property
can be reckoned only from 21 June 1983, the date when according to evidence, the subject property became alienable and
disposable. From said date up to the filing of the application for registration of title over the subject property on 14 June
2001, only eighteen (18) years had lapsed. Thus, appellees possession of the subject property fell short of the
requirement of open, continuous and exclusive possession of at least 30 years.

Moreover, there was no adequate evidence which would show that appellees and their predecessors-in-interest exercised
acts of dominion over the subject land as to indicate possession in the concept of owner. The testimonies of appellees
witnesses regarding actual possession are belied by the absence of evidence on actual use of or improvements on the
subject property. Appellees presented only various tax declarations to prove possession. However, except for the
Certification, showing payment of tax due on tax declaration for the year 2003, there are no other evidence showing that
all the taxes due corresponding to the rest of the tax declarations were in fact paid by appellees or their predecessors-in-
interest.
 In sum, appellees were unable to prove that they or their predecessors-in-interest have been in possession of the subject
property for more than 30 years, which possession is characterized as open, continuous, exclusive, and notorious, in the
concept of an owner. Appellees failed to discharge their duty of substantiating possession and title to the subject land.

WHEREFORE, the appeal is hereby GRANTED and the Decision dated 29 July 2006 of the Regional Trial Court (RTC) of
Naic, Cavite, Branch 15 is REVERSED and SET ASIDE.

SO ORDERED.[6] (citation omitted)

The petitioners moved for reconsideration but this was denied by the CA in its August 12, 2010 Resolution.[7]

The petitioners question the conclusion arrived at by the CA, alleging that the evidence they presented prove that they and their

predecessors-in-interest have been in possession and occupation of the subject property for more than 30 years. The petitioners claim that

the following sufficed to demonstrate that they acquired title over the subject property by prescription:

a. the testimony of their attorney-in-fact, Ma. Wilhelmina Tobias, stating that:

i. the petitioners have been in actual, notorious and open possession of the subject property since the time
they purchased the same in 1996;
ii. the petitioners have regularly paid the taxes due on the subject property;
iii. the petitioners predecessors-in-interest, Victorio Garcia, Felipe Gatdula and Gregonio Gatdula, had been in
possession of the subject property for more than 30 years and had religiously paid the taxes due thereon; and
iv. the subject property is agricultural, alienable and disposable;

b. the testimony of the caretaker of the subject property, Margarito Pena, stating that:

i. he resides near the subject property;

ii. he witnessed the execution of the deed of sale that petitioners entered into with Gregonio Gatdula; and
iii. the petitioners and predecessors-in-interest have been in possession of the subject property for more
than 30 years;

c. the testimony of Ferdinand Encarnacion, a clerk in the Docket Division of the Land Registration Authority (LRA), stating
that:

i. no opposition to the petitioners application was filed before the LRA;

ii. an examiner of the LRA found nothing wrong with the petitioners application; and
iii. no title covering the subject property was previously issued;

d. Tax Declaration Nos. 2935, 2405 and 1823 for the years 1961, 1967 and 1974 in the name of Victorio Garcia; [8]

e. Tax Declaration Nos. 1534 and 3850 for the years 1980 and 1985 in the name of Felipe Gatdula; [9]

f. Tax Declaration Nos. 22453-A and 2925 for the years 1991 and 1994 in the name of Gregonio Gatdula;[10]

g. Tax Declaration Nos. 21956-A, 22096-A, 22097-A and 97-05078 in the name of the petitioners;[11]

h. Resolution No. 69, Series of 1998, of the Sangguniang Bayan of Indang, Cavite, which approved the reclassification of
several lots, including the subject property, from agricultural to residential/commercial; [12]

i. DARCO Conversion Order No. 040210005-(340)-99, Series of 2000, issued by the Department of Agrarian Reform on
July 13, 2000, which converted several parcels of land, including the subject property, from agricultural to
residential/commercial;[13]

j. Certification issued by the Department of Environment and Natural Resources (DENR) CALABARZON dated October 29,
2002, stating that the subject area falls within the Alienable and Disposable Land Project No. 13-A of Indang, Cavite per LC
Map 3091 certified on June 21, 1983.[14]

Issue

This Court is faced with the lone issue of whether the petitioners have proven themselves qualified to the benefits under the

relevant laws on the confirmation of imperfect or incomplete titles.

Our Ruling

Commonwealth Act No. 141, otherwise known as the Public Land Act governs the classification and disposition of lands forming

part of the public domain. Section 11 thereof provides that one of the modes of disposing public lands suitable for agricultural purposes is by
confirmation of imperfect or incomplete titles. Section 48 thereof enumerates those who are considered to have acquired an imperfect or

incomplete title over an alienable and disposable public land.

Presidential Decree No. 1529 (P.D. No. 1529), otherwise known as the Property Registration Decree, is a codification of all the laws

relative to the registration of property and Section 14 thereof specifies those who are qualified to register their incomplete title over an

alienable and disposable public land under the Torrens system. Particularly:

Section 14. Who may apply. The following persons may file in the proper Court of First Instance an application
for registration of title to land, whether personally or through their authorized representatives:

(1) Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive
and notorious possession and occupation of alienable and disposable lands of the public domain under a bona fide claim
of ownership since June 12, 1945, or earlier.
(2) Those who have acquired ownership of private lands by prescription under the provision of existing laws.
(3) Those who have acquired ownership of private lands or abandoned river beds by right of accession or
accretion under the existing laws.
(4) Those who have acquired ownership of land in any other manner provided for by law.

As this Court clarified in Heirs of Malabanan v. Republic of the Philippines,[15] and Republic of the Philippines v. East Silverlane Realty

Development Corporation,[16] Section 14(1) covers alienable and disposable lands while Section 14(2) covers private property. Thus, for ones

possession and occupation of an alienable and disposable public land to give rise to an imperfect title, the same should have commenced on

June 12, 1945 or earlier. On the other, for one to claim that his possession and occupation of private property has ripened to imperfect title,

the same should have been for the prescriptive period provided under the Civil Code. Without need for an extensive extrapolation, the

private property contemplated in Section 14(2) is patrimonial property as defined in Article 421 in relation to Articles 420 and 422 of the

Civil Code.

Going further, it was explained in Heirs of Malabanan and East Silverlane, that possession and occupation of an alienable and disposable

public land for the periods provided under the Civil Code will not convert it to patrimonial or private property. There must be an express

declaration that the property is no longer intended for public service or the development of national wealth. In the absence thereof, the

property remains to be alienable and disposable and may not be acquired by prescription under Section 14(2) of P.D. No. 1529. Thus:

In Heirs of Malabanan, this Court ruled that possession and occupation of an alienable and disposable public land
for the periods provided under the Civil Code do not automatically convert said property into private property or release
it from the public domain. There must be an express declaration that the property is no longer intended for public service
or development of national wealth. Without such express declaration, the property, even if classified as alienable or
disposable, remains property of the State, and thus, may not be acquired by prescription.

Nonetheless, Article 422 of the Civil Code states that [p]roperty of public dominion, when no
longer intended for public use or for public service, shall form part of the patrimonial property of the
State. It is this provision that controls how public dominion property may be converted into
patrimonial property susceptible to acquisition by prescription. After all, Article 420 (2) makes clear
that those property which belong to the State, without being for public use, and are intended for some
public service or for the development of the national wealth are public dominion property. For as long
as the property belongs to the State, although already classified as alienable or disposable, it
remains property of the public dominion if when it is intended for some public service or for
the development of the national wealth. (emphasis supplied)

Accordingly, there must be an express declaration by the State that the public
dominion property is no longer intended for public service or the development of the national
wealth or that the property has been converted into patrimonial. Without such express
declaration, the property, even if classified as alienable or disposable, remains property of the
public dominion, pursuant to Article 420(2), and thus incapable of acquisition by prescription.
It is only when such alienable and disposable lands are expressly declared by the State to be no
longer intended for public service or for the development of the national wealth that the period
of acquisitive prescription can begin to run. Such declaration shall be in the form of a law duly
enacted by Congress or a Presidential Proclamation in cases where the President is duly
authorized by law.

In other words, for one to invoke the provisions of Section 14(2) and set up acquisitive prescription against the State, it is
primordial that the status of the property as patrimonial be first established. Furthermore, the period of possession
preceding the classification of the property as patrimonial cannot be considered in determining the completion of the
prescriptive period.[17]
The petitioners application is obviously anchored on Section 14(2) of P.D. No. 1529 as they do not claim to have possessed, by themselves or

their predecessors-in-interest, the subject property since June 12, 1945 or earlier. That it was thru prescription that they had acquired an

imperfect title over the subject property is the foundation upon which the petitioners rest their application.

Unfortunately, this Court finds the evidence presented by the petitioners to be wanting. The petitioners failed to demonstrate that they and

their predecessors-in-interest possessed the property in the requisite manner, which this Court explained as follows:

It is concerned with lapse of time in the manner and under conditions laid down by law, namely, that the
possession should be in the concept of an owner, public, peaceful, uninterrupted and adverse. Possession is open when it
is patent, visible, apparent, notorious and not clandestine. It is continuous when uninterrupted, unbroken and not
intermittent or occasional; exclusive when the adverse possessor can show exclusive dominion over the land and an
appropriation of it to his own use and benefit; and notorious when it is so conspicuous that it is generally known and
talked of by the public or the people in the neighborhood. The party who asserts ownership by adverse possession must
prove the presence of the essential elements of acquisitive prescription.[18]

Tax declarations per se do not qualify as competent evidence of actual possession for purposes of prescription. More so, if the payment of the

taxes due on the property is episodic, irregular and random such as in this case. Indeed, how can the petitioners claim of possession for the

entire prescriptive period be ascribed any ounce of credibility when taxes were paid only on eleven (11) occasions within the 40-year period

from 1961 to 2001? In Wee v. Republic of the Philippines,[19] this Court stated that:

It bears stressing that petitioner presented only five tax declarations (for the years 1957, 1961, 1967, 1980 and 1985) for
a claimed possession and occupation of more than 45 years (1945-1993). This type of intermittent and sporadic
assertion of alleged ownership does not prove open, continuous, exclusive and notorious possession and
occupation. In any event, in the absence of other competent evidence, tax declarations do not conclusively establish
either possession or declarants right to registration of title.[20] (emphasis supplied and citation omitted)

In East Silverlane, it was emphasized that adverse, continuous, open, public possession in the concept of an owner is a conclusion of law and

the burden to prove it by clear, positive and convincing evidence is on the applicant. A claim of ownership will not proper on the basis of tax

declarations if unaccompanied by proof of actual possession.[21]

While there was an attempt to supplement the tax declaration by testimonial evidence, the same is futile and frivolous. The testimonies of

Margarito Pena and Ma. Wilhelmina Tobias do not merit consideration and do not make up for the inherent inadequacy of the eleven (11)

tax declarations submitted by the petitioners. Such witnesses did not state what specific acts of ownership or dominion were performed by

the petitioners and predecessors-in-interest and simply made that general assertion that the latter possessed and occupied the subject

property for more than thirty (30) years, which, by all means, is a mere conclusion of law. The RTC should have tackled evidence of such

nature with a disposition to incredulity, if not with an outright rejection.

Furthermore, the petitioners application was filed after only (1) year from the time the subject property may be considered patrimonial.

DARCO Conversion Order No. 040210005-(340)-99, Series of 2000, was issued by the DAR only on July 13, 2000, which means that the

counting of the thirty (30)-year prescriptive period for purposes of acquiring ownership of a public land under Section 14(2) can only start

from such date. Before the property was declared patrimonial by virtue of such conversion order, it cannot be acquired by prescription. This

is clear from the pronouncements of this Court in Heirs of Malabanan quoted above and in Republic of the Philippines v. Rizalvo,[22] which

states:

On this basis, respondent would have been eligible for application for registration because his claim of ownership and
possession over the subject property even exceeds thirty (30) years. However, it is jurisprudentially clear that the thirty
(30)-year period of prescription for purposes of acquiring ownership and registration of public land under Section 14 (2)
of P.D. No. 1529 only begins from the moment the State expressly declares that the public dominion property is no longer
intended for public service or the development of the national wealth or that the property has been converted into
patrimonial.[23]
WHEREFORE, premises considered, the instant petition is DENIED for lack of merit. The July 6, 2009 Decision and August 12, 2010

Resolution of the Court of Appeals are AFFIRMED.

SO ORDERED.
 THIRD DIVISION

REPUBLIC OF THE PHILIPPINES, G.R. No. 176885

Petitioner,
Present:

CARPIO MORALES, J.,

Chairperson,

BRION,
- versus -
BERSAMIN,

ABAD,* and

VILLARAMA, JR., JJ.

Promulgated:
DOMINGO ESPINOSA,
July 5, 2010
Respondent.

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

DECISION
VILLARAMA, JR., J.:

This petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, assails the Decision[1] of the Court of
Appeals (CA) dated August 16, 2004 in CA-G.R. CV. No. 72736 which affirmed the September 28, 2000 Judgment [2] of the Municipal Trial
Court (MTC) of Consolacion, Cebu ordering the confirmation and registration of respondents imperfect title over the disputed property.

Briefly, the undisputed factual antecedents are as follows:

On March 2, 1999, respondent filed with the MTC of Consolacion, Cebu, an application for registration of title to Lot No. 8408, Cad 545-D
located at Barangay Cabangahan, Consolacion, Cebu, with an area of 17,891 square meters and an assessed value of P9,730.00 per Tax Declaration No.
01039.[3]

At the trial, respondent was the sole witness presented to prove his possession and ownership over the land. He claimed to be the
owner of the disputed property, having acquired it from his mother, Isabel Espinosa, by virtue of a deed of absolute sale. He also testified that he
has been in open, public, continuous and notorious possession of the land in the concept of an owner for more than thirty (30) years, and that
his mother had declared the land for taxation purposes as early as 1965. He had the property surveyed and an advance survey and a technical
description were secured. The Chief of the Map Projection Section of the Department of Environment and Natural Resources (DENR) had also
verified in a notation on the right side portion of the plan that the lot is within the alienable and disposable area. A certification was also issued
by the DENR-Community Environment and Natural Resources Officer (CENRO) stating that the lot was not covered by any subsisting public land
application. The original tracing cloth plan of the property also appears to have been appended to the application but the records show that it
was not presented in court as the MTCs Clerk of Court had submitted the original tracing cloth plan to the Land Registration Authority.

On September 28, 2000, over petitioners opposition, the MTC granted respondents petition for registration of his imperfect
title. The trial court held:

After a careful consideration of the evidence presented in the above-entitled case, the Court is convinced, and so
holds, that the applicant was able to establish his ownership and possessions (sic) over the subject lot which is within the
area considered by the Department of Environment and Natural Resources (DENR) as alienable and disposable land of
the public domain.

The Court is likewise convinced that the applicant and that of his predecessors-in-interests have been in open,
actual, public, continuous, adverse and under claim of title thereto within the time prescribed by law (Sec. 14, sub-par. 1,
P.D. 1529) and/or in accordance with the Land Registration Act.
 WHEREFORE, and in view of all the foregoing, Judgment is hereby rendered rending (sic) for the registration and
the confirmation of title of the applicant over Lot No. 8408, Cad 545-D(New), situated at Cabangahan, Consolacion, Cebu,
Philippines, containing an area of 17,891 square meters and that upon the finality of this decision, let a corresponding
decree of registration be issued in favor of the herein applicant in accordance with Section 39, P.D. 1529.

SO ORDERED.[4]

Petitioner filed a notice of appeal[5] with the trial court. On August 16, 2004, the CA affirmed the judgment of the MTC. According to
the CA, the evidence presented competently and sufficiently shows that the property is within the alienable and disposable area of public
land. The CA considered the approved advance survey plan of Lot 8408, Cad 545-D presented by respondent and the notation thereon made
by Cynthia Ibanez, Chief of the Map Projection Section of DENR, as sufficient proof that the land is alienable public land, considering that the
plan, which had Ibanezs notation Conformed Per LC Map Notation LC Map No. 2545 Project No. 28, Block-1 certified on June 25, 1963,
verified to be within alienable and disposable land, was approved by the Land Management Services of the DENR. [6] The CA found the non-
presentation of the original tracing cloth plan during trial not fatal to respondents case because it was shown that the original tracing cloth
plan was appended to the application submitted before the MTC although the original tracing cloth plan was later submitted by the Clerk of
Court to the Land Registration Authority. The CA noted that applicants usually present the original drafting film or the approved survey plan
in court in lieu of the original tracing cloth plan.[7]

The CA also found that respondent acquired the property from his mother on June 15, 1971 and the latter declared the same for
taxation purposes sometime in 1965. Respondents possession of the property in the concept of an owner, when tacked with the previous
possession of his mother, his predecessor-in-interest, presented a consolidated ownership and possession of the property for a period of
over thirty (30) years. The CA further held that to require respondent to prove possession over the property as early as June 12, 1945 would
be unjust, unfair and iniquitous.[8]

Hence, the present petition.

On June 20, 2007, the Court required respondent to comment on the petition within ten (10) days from notice. Despite service of
the Courts Resolution, however, respondent failed to file the required Comment. Hence, on November 17, 2008, we dispensed with the filing
of the comment and considered the case submitted for resolution.

Petitioner raises the following grounds before this Court, to wit:

I.

THE HONORABLE COURT OF APPEALS ERRED IN GRANTING THE APPLICATION FOR LAND REGISTRATION BECAUSE
RESPONDENT FAILED TO PROVE THAT THE LAND HAS BEEN CLASSIFIED AS ALIENABLE OR DISPOSABLE.

II.

THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT A DECREE OF LAND REGISTRATION MAY ISSUE BECAUSE
RESPONDENT FAILED TO SUBMIT THE ORIGINAL TRACING CLOTH PLAN FROM THE LAND REGISTRATION AUTHORITY.[9]

Essentially, the issue is whether the Court of Appeals erred in affirming the trial courts judgment confirming respondents title to
the subject property.

The petition is impressed with merit.

It is doctrinal that all lands not appearing to be clearly of private dominion presumptively belong to the State. Public lands not shown
to have been reclassified or released as alienable agricultural land or alienated to a private person by the State remain part of the inalienable
public domain.[10] Unless public land is shown to have been reclassified or alienated to a private person by the State, it remains part of the
inalienable public domain.[11] The onus to overturn, by incontrovertible evidence, the presumption that the land subject of an application for
registration is alienable or disposable rests with the applicant.[12]

Generally, the Court is not bound to weigh all over again the evidence adduced by the parties, particularly where the findings of both
the trial court and the appellate court coincide. The resolution of factual issues is a function of the trial court whose findings on these matters
are, as a general rule, binding on this Court, more so where these have been affirmed by the CA.[13] In the present case, however, the general rule
with regard to the conclusiveness of the trial court and appellate tribunals factual findings should not be applied. A review of the records shows
that other than the notation on the advanced survey plan stating in effect that the subject property is alienable and disposable and respondents
self-serving testimony, there is an utter lack of evidence to show the actual legal classification of the disputed lot. Respondent was not able to
show proof that the property was alienable or disposable. The approved survey plan merely identifies the property preparatory to a judicial
proceeding for adjudication of title.[14]

The factual circumstances of the present case are similar to those in Republic v. Tri-Plus Corporation[15] (Tri-Plus case), wherein the
respondent filed an application for registration of title over two (2) lots also of the cadastral survey of Consolacion, Cebu. The petitioner Republic of
the Philippines, represented by the Office of the Solicitor General, likewise asserted that a mere notation appearing in the survey plans of the
disputed properties showing that the subject lands had been classified as alienable and disposable on June 25, 1963 was not sufficient to establish
the nature and character of these lands. The Republic claimed that there should be a positive act on the part of the government, such as a
certification from the DENR, to prove that the said lands were indeed alienable and disposable. On the other hand, the respondent argued that the
notations appearing in the survey plans of the subject properties serve as sufficient proof that the subject lands were alienable and disposable as
these were duly approved by the DENR, Land Management Services, whose official acts were presumed to be in accordance with law.

The Court, in the Tri-Plus case, ruled in favor of the petitioner and held that:

In any case, while the subject lands were properly identified, the Court finds that respondent failed to comply
with the other legal requirements for its application for registration to be granted.

Applicants for confirmation of imperfect title must prove the following: (a) that the land forms part of the
alienable and disposable agricultural lands of the public domain; and (b) that they have been in open, continuous,
exclusive and notorious possession and occupation of the same under a bona fide claim of ownership either since time
immemorial or since June 12, 1945.

In the present case, the Court finds merit in petitioners contention that respondent failed to prove the first
requirement that the properties sought to be titled forms part of the alienable and disposable agricultural lands of the
public domain.

Section 6 of Commonwealth Act No. 141, as amended, provides that the classification and reclassification of
public lands into alienable or disposable, mineral or forest land is the prerogative of the Executive Department.Under the
Regalian doctrine, which is embodied in our Constitution, all lands of the public domain belong to the State, which is the
source of any asserted right to any ownership of land. All lands not appearing to be clearly within private ownership are
presumed to belong to the State. Accordingly, public lands not shown to have been reclassified or released as alienable
agricultural land or alienated to a private person by the State remain part of the inalienable public domain.

It must be stressed that incontrovertible evidence must be presented to establish that the land subject of the
application is alienable or disposable.

In the present case, the only evidence to prove the character of the subject lands as required by law is the
notation appearing in the Advance Plan stating in effect that the said properties are alienable and disposable.However,
this is hardly the kind of proof required by law. To prove that the land subject of an application for registration is
alienable, an applicant must establish the existence of a positive act of the government such as a presidential
proclamation or an executive order, an administrative action, investigation reports of Bureau of Lands
investigators, and a legislative act or statute. The applicant may also secure a certification from the Government
that the lands applied for are alienable and disposable. In the case at bar, while the Advance Plan bearing the
notation was certified by the Lands Management Services of the DENR, the certification refers only to the
technical correctness of the survey plotted in the said plan and has nothing to do whatsoever with the nature and
character of the property surveyed. Respondents failed to submit a certification from the proper government
agency to prove that the lands subject for registration are indeed alienable and disposable.[16] (Emphasis ours.)

Respondent having failed to present the quantum of evidence to prove that the land in dispute is alienable and disposable public
land, the CA should have reversed the MTC judgment conformably to our ruling in the Tri-Plus case. The presumption remains that subject
properties remain part of the inalienable public domain and, therefore, could not become the subject of confirmation of imperfect title.[17]

WHEREFORE, the Decision of the Court of Appeals in CA-G.R. CV. No. 72736 is REVERSED and SET ASIDE, and the petition for
registration in L.R.C. Case No. N-83 (LRA Record No. N-70924) is hereby DISMISSED.

No costs.

SO ORDERED.
 THIRD DIVISION

April 5, 2017

G.R. No. 186603

REPUBLIC OF THE PHILIPPINES, represented by the REGIONAL EXECUTIVE DIRECTOR, DENR, REGION VI, ILOILO CITY, Petitioners,
vs.
VALENTINA REGISTER OF PROVINCE OCCIDENTAL, CALISTON, DIOSCORO ESCARDA, ESPINOSA, DEEDS OF THE OF NEG ROS
LEONILA and & SPOUSES ESTRELLA, Respondents

DECISION

JARDELEZA, J.:

This is a petition for review on certiorari1 seeking to nullify the Court of Appeals' (CA) July 25, 2008 Decision2 and February 4, 2009
Resolution3 in CA-G.R. CV No. 00421. The CA modified the May 12, 2004 Decision4 of the Regional Trial Court (RTC), Branch 61 of
Kabankalan City, Negros Occidental, and dismissed the reversion case filed by the Republic of the Philippines (State) against respondents
Valentina Espinosa and her successor-in-interest, Leonila B. Caliston, to wit: WHEREFORE, the appeal is GRANTED. The Decision dated May
12, 2004 and Order dated July 16, 2004 are hereby modified upholding the validity of Original Certificate of Title No. 191-N and Transfer
Certificate of Title No. 91117, respectively, issued in the names of Valentina Espinosa and Leonila Caliston. The award of damages, attorney's
fees and expenses of litigation in favor of Leonila Caliston is affirmed.

SO ORDERED.5

On October 26, 1955, Cadastral Decree No. N-31626 was issued to Valentina Espinosa (Espinosa) in Cadastral Case No. 39, L.R.C. Cadastral
Record No. 980. It covered a 28,880-square meter lot located at Lot No. 3599 of Cadastral Record No. 980, Poblacion, Sipalay City, Negros
Occidental (property). By virtue of the decree, Original Certificate of Title (OCT) No. 191-N was issued on October 15, 1962 in the name
ofEspinosa.6 On June 17, 1976, Espinosa sold the property to Leonila B. Caliston (Caliston), who was later issued Transfer Certificate of Title
(TCT) No. T- 911177 on June 29, 1976.8

On January 13, 2003, the State, represented by the Regional Executive Director of the Department of Environment and Natural Resources
(DENR), Region VI, Iloilo City, through the Office of the Solicitor General (OSG), filed a Complaint 9 for annulment of title and/or reversion of
land with the RTC, Branch 61 of Kabankalan City, Negros Occidental. The State claimed that the property is inalienable public land because it
fell within a timberland area indicated under Project No. 27-C, Block C per Land Classification (LC) Map No. 2978, as certified by the Director
of Forestry on January 17, 1986.10

The spouses Dioscoro and Estrella Escarda (spouses Escarda) intervened, 11 alleging that they have been occupying the property since 1976
on the belief that it belongs to the State. 12 They prayed that Caliston be ordered to cease and desist from ejecting them. 13

In answer, Caliston countered that the property is not timberland. Invoking laches and prescription, she argued that her title was issued
earlier in 1962, while the map shows that the property was classified only in 1986.14 Caliston also claimed that the spouses Escarda lacked
the capacity or personality to intervene because only the State may initiate an action for reversion. She also alleged that the spouses Escarda
cannot claim a better right as against her because she merely tolerated their occupancy of the property until their refusal to vacate it. 15 As
counterclaim, Caliston claimed for moral and exemplary damages, attorney's fees and litigation expenses against the spouses Escarda for the
baseless and malicious complaint. 16

The RTC rendered a Decision17 dated May 12, 2004. Relying on LC Map No. 2978, the trial court ruled in favor of the State and ordered the
reversion of the property to the mass of the public domain, viz.:

WHEREFORE, premises considered, judgment 1s hereby rendered as follows:

1. Declaring Original Certificate of Title No.191-N in the name of Valentina Espinosa and all its derivative titles, such as: TCT No. T-
91117 in the name of Leonila Caliston, null and void ab initio;

2. Ordering defendants to surrender the owner's duplicate copy of OCT No. 191-N and TCT N[o]. T-91117 to defendant Register of
Deeds for the Province of Negros Occidental and the latter to cancel said titles and all their derivative titles, if any;

3. Ordering the reversion of the land covered by the aforesaid patent and title to the mass of the public domain under the
administration and disposition of the Director of Forestry (now Regional Executive Director, Region VI, Iloilo City);

4. Declaring that defendant Leonila Caliston has better right over the subject lot as against intervenors Spouses Dioscoro and
Estrella Escarda; and

5. Ordering the intervenors to pay defendant Leonila Caliston the following sums:

a) Not less than P20,000.00 for moral damages;

b) Not less than Pl0,000.00 for exemplary damages;

c) Not less than Pl0,000.00 for attorney's fees, plus so much appearance fees of ₱2,000.00 incurred and/or paid by
answering defendant in connection with this case; and

d) Not less than ₱5,000.00 for expenses of litigation.

SO ORDERED. 18

Caliston' s motion for reconsideration 19 was denied in an Order20 dated July 16, 2004. On August 5, 2004, Caliston filed a Notice of
Appeal21 with the RTC. On the other hand, the spouses Escarda did not file a notice of appeal. Records were then forwarded to the CA, where
proceedings ensued.

There, Caliston argued that the trial court improperly relied upon LC Map No. 2978, which was prepared long after the property was
alienated and awarded to Espinosa, her predecessor-in-interest. The map, the admissibility and genuineness of which have yet to be proved,
cannot be used to defeat the cadastral proceedings presumed to have been regularly conducted. Even assuming the map can be considered,
Caliston claims that her property is situated in an area indicated as alienable and disposable. She also reiterated her defenses of laches and
prescription. 22

For its part, the State argued that the lower court did not err in relying upon LC Map No. 2978 though it was prepared only in 1986.
According to the State, forest lands are incapable of private appropriation and possession, however long; prescription does not run against
the government. 23

The CA rendered a Decision24 dated July 25, 2008 modifying the RTC Decision. It upheld the validity of OCT No. 191-N and TCT No. 91117
issued in the names of Espinosa and Caliston, respectively, and affirmed the award of damages, attorney's fees, and expenses of litigation in
favor of Caliston.

The CA found that the State failed to prove fraud or misrepresentation on the part of Espinosa when she was issued OCT No. 191-N. It
further ruled that the State failed to prove that the property is forest land. The lone piece of evidence consisting of LC Map No. 2978, certified
by the Director of Forestry on January 17, 1986, was not authenticated pursuant to Section 24, 25 Rule 132 of the Rules of Court. It noted that
the parties stipulated only as to the existence of the map, but not as to its genuineness or the truthfulness of its content. Assuming that the
map is admitted in evidence, Espinosa's rights over the property, which accrued in 1962; should not be prejudiced by a subsequent
classification by the State done in 1986, or after 24 years. 26 The CA cited27 the case of SAAD Agro-Industries, Inc. v. Republic of the
Philippines. 28

In a Resolution29 dated February 4, 2009, the CA denied the State's Motion for Reconsideration.

Hence, this petition.

The lone issue presented is whether the State has sufficiently proved that the property is part of inalienable forest land at the time Espinosa
was granted the cadastral decree and issued a title.

We deny the petition.

The State failed to prove that the property was classified as forest land at the time of the grant of the cadastral decree and issuance of title to
Espinosa.

In land registration proceedings, the applicant has the burden of overcoming the presumption of State ownership. It must establish, through
incontrovertible evidence, that the land sought to be registered is alienable or disposable based on a positive act of the government. 30 Since
cadastral proceedings are governed by the usual rules of practice, procedure, and evidence, a cadastral decree and a certificate of title are
issued only after the applicant proves all the requisite jurisdictional facts-that they are entitled to the claimed lot, that all parties are heard,
and that evidence is considered.31 As such, the cadastral decree is a judgment which adjudicates ownership after proving these jurisdictional
facts.32

Here, it is undisputed that Espinosa was granted a cadastral decree and was subsequently issued OCT No. 191-N, the predecessor title of
Caliston's TCT No. 91117. Having been granted a decree in a cadastral proceeding, Espinosa can be presumed to have overcome the
presumption that the land sought to be registered forms part of the public domain. 33 This means that Espinosa, as the applicant, was able to
prove by incontrovertible evidence that the property is alienable and disposable property in the cadastral proceedings.

This is not to say, however, that the State has no remedy to recover the property if indeed it is part of the inalienable lands of the public
domain. The State may still do so through an action for reversion, as in the present case.

Reversion is the remedy where the State, pursuant to the Regalian doctrine, seeks to revert land back to the mass of the public domain. 34 It
is proper when public land is fraudulently awarded and disposed of to private individuals or corporations. 35 There are also instances when
we granted reversion on grounds other than fraud, such as when a "person obtains a title under the Public Land Act which includes, by
oversight, lands which cannot be registered under the Torrens system, or when the Director of Lands did not have jurisdiction over the same
because it is of the public domain."36

In this case, the State, through the Solicitor General, alleges neither fraud nor misrepresentation in the cadastral proceedings and in the
issuance of the title in Espinosa's favor. The argument for the State is merely that the property was unlawfully included in the certificate of
title because it is of the public domain.

Since the case is one for reversion and not one for land registration, the burden is on the State to prove that the property was classified as
timberland or forest land at the time it was decreed to Espinosa.37 To reiterate, there is no burden on Caliston to prove that the property in
question is alienable and disposable land. 38 At this stage, it is reasonable to presume that Espinosa, from whom Caliston derived her title,
had already established that the property is alienable and disposable land considering that she succeeded in obtaining the OCT over it.39 In
this reversion proceeding, the State must prove that there was an oversight or mistake in the inclusion of the property in Espinosa' s title
because it was of public dominion. This is consistent with the rule that the burden of proof rests on the party who, as determined by the
pleadings or the nature of the case, asserts the affirmative of an issue.40

Here, the State hinges its whole claim on its lone piece of evidence, the land classification map prepared in 1986.
The records show, however, that LC Map No. 2978 was not formally offered in evidence. The rules require that documentary evidence must
be formally offered in evidence after the presentation of testimonial evidence, and it may be done orally, or if allowed by the court, in
writing.41 Due process requires a formal offer of evidence for the benefit of the adverse party, the trial court, and the appellate courts.42 This
gives the adverse party the opportunity to examine and oppose the admissibility of the evidence. 43 When evidence has not been formally
offered, it should not be considered by the court in arriving at its decision.44 Not having been offered formally, it was error for the trial court
to have considered the survey map. Consequently, it also erred in ordering the reversion of the property to the mass of the public domain on
the basis of the same.

Moreover, even assuming that the survey can be admitted in evidence, this will not help to further the State's cause.1âwphi1This is because
the only fact proved by the map is one already admitted by the State, that is, that the land was reclassified in 1986. 45 This fact does not
address the presumption/conclusion that Espinosa has, at the time of the cadastral proceedings conducted in 1955, proved that the land is
alienable and disposable, as evidenced by the decree issued in his favor in 1962.

II

The reclassification of the area where the property is located in 1986 should not prejudice Espinosa and her successor-in-interest.46 Apropos
is the case of Sta. Monica Industrial and Dev't Corp. v. Court of Appeals. 47 In that case, the State offered in evidence a land classification map to
prove that at the time the land was decreed to the original owner, it had not yet been released and still fell within the forest zone. However,
the map did not conclusively state the actual classification of the land at the time it was adjudicated to the original owner. We thus ruled that
the State failed to prove that the titles should be annulled- Finally, we find the need to emphasize that in an action to annul a judgment, the
burden of proving the judgment's nullity rests upon the petitioner. The petitioner must establish by clear and convincing evidence that the
judgment is fatally defective. When the proceedings were originally filed by the Republic before the Court of Appeals, the petitioner
contended that when the decree in favor of De Perio was issued by Judge Ostrand in 1912 the parcels of land were still part of the inalienable
public forests. However, petitioner's case rested solely on land classification maps drawn several years after the issuance of the decree in
1912. These maps fail to conclusively establish the actual classification of the land in 1912 and the years prior to that. Before this
Court, petitioner reiterates said contention and refers, for the first time, to a 1908 proclamation reserving the land in Zambales as a naval
reservation and alleging that the subject parcels of land are parts thereof. These, for reasons discussed earlier, are insufficient to overcome
the legal presumption in favor of the decree's regularity, more so when we consider that notice of the application for registration and the
date of hearing thereof, addressed to the Attorney General, the Director of Lands, the Director of Public Works and the Director of Forestry,
among others, was published in the Official Gazette and that Governor General Smith's Proclamation of 1908 itself recognizes private
rights.48

We stress that our ruling is not inconsistent with the doctrine that forest lands are outside the commerce of man and unsusceptible of
private appropriation.1âwphi1 Neither are we changing the rule on imprescriptibility of actions for reversion. We are merely deciding on the
facts as proved by the record. To allow a reversion based on a classification made at the time when the property was already declared
private property by virtue of a decree would be akin to expropriation of land without due process of law. 49

At this juncture, we agree with the CA' s application of SAAD AgroIndustries, Inc., 50 which involved a complaint for annulment of title and
reversion of a lot covered by a free patent and original title. To support its claim that the lot was part of the timberland and forest reserve,
the State submitted as evidence a photocopy of a land classification map. This map also became the basis of the testimonies of City
Environment and Natural Resources Office officers declaring that the lot falls within the timberland or forest reserve. The State, however,
failed to submit either a certified true copy or an official publication of the map, prompting the trial court to deny its admission in evidence.
After proceedings, the trial court dismissed the complaint due to the State's failure to show that the subject lot therein is part of the
timberland or forest reserve or has been classified as such before the issuance of the free patent and the original title. The CA, relying on the
map, reversed the trial court.

When the case was brought before this court, we reinstated the trial court's decision. We held that the photocopy of the land classification
map cannot be considered in evidence because it is excluded under the best evidence rule. We emphasized that all parties, including the
Government, are bound by the rules of admissibility and must comply with it- The rules of admissibility must be applied uniformly. The
same rule holds true when the Government is one of the parties. The Government, when it comes to court to litigate with one of its citizens,
must submit to the rules of procedure and its rights and privileges at every stage of the proceedings are substantially in every respect the
same as those of its citizens; it cannot have a superior advantage. This is so because when a [sovereign] submits itself to the jurisdiction of
the court and participates therein, its claims and rights are justiciable by every other principle and rule applicable to the claims and rights of
the private parties under similar circumstances. Failure to abide by the rules on admissibility renders the L.C. Map submitted by respondent
inadmissible as proof to show that the subject lot is part of the forest reserve. 51

We went on to explain that even if the map was admitted in evidence to prove that the lot was classified as part of the timberland or forest
reserve, the classification was made long after private interests had intervened. Not only was the lot already occupied and cultivated, a free
patent and a certificate of title were also awarded and issued years ahead of the classification- Even assuming that the L.C. Map submitted by
respondent is admissible in evidence, still the land in question can hardly be considered part of the timberland or forest reserve. L.C. Map
No. 2961, which purports to be the "correct map of the areas demarcated as permanent forest pursuant of the provisions of P.D. No. 705 as
amended" was made only in 1980. Thus, the delineation of the areas was made nine (9) years after Orcullo was awarded the free patent over
the subject lot.

xxx

Obviously, private interests have intervened before classification was made pursuant to P.D. No. 705. Not only has Orcullo by herself and
through her predecessors-ininterest cultivated and possessed the subject lot since 1930, a free patent was also awarded to her and a title
issued in her name as early as 1971. In fact, it appears that the issuance of the free patent and certificate of title was regular and in order.
Orcullo complied with the requisites for the acquisition of free patent provided under Commonwealth Act No. 141 (Public Land Act), as
certified by the Director of Lands and approved by the Secretary of Agriculture and Natural Resources.

xxx

The Regalian doctrine is well-enshrined not only in the present Constitution, but also in the 1935 and 1973 Constitutions. The Court has
always recognized and upheld the Regalian doctrine as the basic foundation of the State's property regime. Nevertheless, in applying this
doctrine, we must not lose sight of the fact that in every claim or right by the Government against one of its citizens, the paramount
considerations of fairness and due process must be observed. Respondent in this case failed to show that the subject lot is part of timberland
or forest reserve it adverted to. In the face of the uncontroverted status of Free Patent No. 473408 and OCT No. 0-6667 as valid and regular
issuances, respondent's insistence on the classification of the lot as part of the forest reserve must be rejected. 52

These principles laid down in SAAD Agro-Industries, Inc. undoubtedly apply here. As part of fair play and due process, the State is as bound
by the rules on formal offer of evidence as much as every private party is. More, the State's subsequent reclassification of the area where the
property is situated cannot be used to defeat the rights of a private citizen who acquired the land in a valid and regular proceeding
conducted 24 years earlier.

The result would have been different had the State proved that the property was already classified as part of forest land at the time of the
cadastral proceedings and when title was decreed to Espinosa in 1962. However, it failed to discharge this burden; the grant of title which
carries with it the presumption that Espinosa had already proved the alienable character of the property in the cadastral proceedings stands.
To grant the reversion based on a subsequent reclassification, more so on lack of evidence, would amount to taking of private property
without just compensation and due process of law.53 This, however, is not what our Constitution envisions; fairness and due process are
paramount considerations that must still be observed.54

WHEREFORE, the petition for review on certiorari is DENIED. The Court of Appeals' July 25, 2008 Decision and February 4, 2009 Resolution
are AFFIRMED. No costs.

SO ORDERED.
 FIRST DIVISION

G.R. No. 146262 January 21, 2005

HEIRS OF EUGENIO LOPEZ, SR., petitioners,

vs.
HON. ALFREDO R. ENRIQUEZ, in his capacity as Administrator of the Land Registration Authority and the REGISTER OF DEEDS OF
MARIKINA CITY, respondents.

DECISION

CARPIO, J.:

The Case

This is a petition for review1 to reverse the Decision2 dated 29 November 2000 of the Court of Appeals ("appellate court") in CA-G.R. SP No.
55993. The appellate court affirmed the Resolution3 dated 21 May 1999 issued by the Land Registration Authority ("LRA") in Consulta No.
2879. The LRA ruled that a notice of lis pendens based on a motion is not registrable.

The Facts

Alfonso Sandoval ("Sandoval") and Roman Ozaeta, Jr. ("Ozaeta") filed an application for registration of title before the Regional Trial Court of
Pasig City, Branch 152 ("land registration court"), docketed as Case No. 2858, Land Registration Case No. N-18887 ("LRC No. N-18887"). The
land registration court issued an order of general default and hearings on the application followed. On 31 May 1966, the land registration
court granted the application. The decision became final and executory, and the land registration court issued a certificate of finality dated 8
March 1991.4

The National Land Titles and Deeds Administration (now LRA) issued on 20 October 1977 Decree Nos. N-217643 and N-217644 in the
names of Sandoval and his wife Rosa Ruiz, and Ozaeta and his wife Ma. Salome Lao. 5

On 16 July 1997, petitioners Eugenio Lopez, Jr., Manolo Lopez, Oscar Lopez, and Presentacion L. Psinakis ("petitioners"), heirs of Eugenio
Lopez, Sr., filed a motion6 in LRC No. N-18887. The motion alleged that Sandoval and Ozaeta sold the lots subject of the application to the late
Eugenio Lopez, Sr. on 23 September 1970. Petitioners prayed that the court consider in the land registration case the Deed of Absolute
Sale7 over the lots executed by Sandoval and Ozaeta and their respective spouses in favor of Eugenio Lopez, Sr. Invoking Section 22 of
Presidential Decree No. 1529 ("PD 1529"),8 petitioners also prayed that the court issue the decree of registration in their names as the
successors-in-interest of Eugenio Lopez, Sr.

The land registration court gave due course to the motion and conducted hearings.9

The Register of Deeds of Marikina City issued the corresponding OCT Nos. O-1603 and O-1604 in favor of Sandoval and Ozaeta and their
spouses only on 18 August 1998.10 The pertinent entries11 in the Decrees read:

This Decree is issued pursuant to the Decision dated 31st day of May, 1966 of the Hon. Pedro C. Navarro, Judge of [Court of First Instance of
Rizal, Branch II, Pasig, Rizal], and the Honorable Briccio C. Ygaña, this 3rd day of July, 1998.

Issued at the National Land Titles and Deeds Registration Administration, Quezon City, this 20th day of October, in the year of Our Lord
nineteen hundred and ninety-seven at 8:01 a.m.

(signed)
ALFREDO R. ENRIQUEZ
ADMINISTRATOR
National Land Titles and Deeds
Registration Administration

Entered in the "Registration Book" for Marikina, pursuant to the provisions of section 39 of PD No. 1529, on the 18th day of August
nineteen hundred and ninety-eight, at 1:16 p.m.

(signed)
EDGAR D. SANTOS
Register of Deeds (Emphasis added)

Petitioners filed another motion on 25 November 1998 to declare void Decree Nos. N-217643 and N-217644 and Original Certificate of Title
("OCT") Nos. O-1603 and O-1604. Petitioners pointed out that the OCTs show that incumbent Administrator Alfredo R. Enriquez signed the
Decrees on 20 October 1997, before he assumed office on 8 July 1998 and even before Hon. Briccio C. Ygaña issued the Order of 3 July
1998.12

Petitioners questioned the inconsistencies in the dates and requested the LRA to recall the decrees. The LRA Administrator denied the
request and explained the inconsistencies in the dates in a letter13 dated 1 December 1998. The entire letter states:

Republic of the Philippines

Department of Justice

LAND REGISTRATION AUTHORITY

Quezon City
 1 December 1998

Atty. Crisostomo A. Quizon

Quiason Makalintal Barot Torres & Ibarra Law Offices
2nd Floor Benpres Building
Exchange Road corner Meralco Ave.
Ortigas Center, Pasig City

Sir:

This concerns your letter requesting the recall of Decree Nos. N-217643 and N-217644 issued in Land Registration Case No. N-2858, LRC
Record No. N-18887, both in the names of Alfonso Sandoval and his wife, Rosa Ruiz, and Roman Ozaeta, Jr., and his wife, Ma. Salome Lao.

Records of this Authority show that aforesaid decrees of registration were prepared on October 20, 1977 pursuant to the decision of the
court dated May 31, 1966 and the order for issuance of decree dated August 24, 1993. Said decrees were forwarded to the Office of the
Administrator on August 8, 1998 and was [sic] released therefrom on August 13, 1998. Consequently, said decrees were signed sometime
between August 8 and 13 1998 and definitely not on October 20, 1997 as what is reflected thereon because the undersigned Administrator
assumed office only on July 8, 1998. Apparently, at the time the decrees were signed it was not noticed, through oversight, that they were
dated October 20, 1977. It is therefore hereby clarified that Decree Nos. N-217643 and N-217644 were actually issued sometime between
August 8 and 13 1998 and not on October 20, 1997.

Regarding the claim that these decrees were prematurely issued as the motion for the issuance of the decrees in favor of the Heirs of Eugenio
Lopez, the properties involved having been sold to him by the applicants, is still pending with the court, it is informed that no copy of said
motion nor of the order directing this Office to comment thereon appears on file in the records of the case. Hence, these matters could not
have been taken into consideration in the issuance of the decrees. Had the Administration been apprised of these incidents, perhaps the
issuance of the decrees could have been held in abeyance until the court has resolved the same.

As to the recall of the decrees of registration, we regret to inform you that since the certificates of title transcribed pursuant to said decrees
have already been issued and released by the Registrar of Deeds concerned, it is now beyond our authority to recall them unless duly
authorized by the court.

We hope that we have satisfactorily disposed of the concerns raised in your letter.

Very truly yours,

(signed)
ALFREDO R. ENRIQUEZ
Administrator

On 25 November 1998, petitioners filed with the Register of Deeds of Marikina City an application to annotate the notice of lis pendens at the
back of OCT Nos. O-1603 and O-1604 on the ground that petitioners have filed with the land registration court a motion to declare OCT Nos.
O-1603 and O-1604 void.14 Petitioners attached to the application a copy of the 25 November 1998 motion and the pertinent OCTs.

In a letter15 dated 15 December 1998, the Register of Deeds of Marikina City denied the application to annotate the notice of lis pendens. The
entire letter states:

Republic of the Philippines

Department of Justice

LAND REGISTRATION AUTHORITY

Registry of Deeds, Marikina City

15 December 1998

Atty. Crisostomo A. Quizon

2nd Floor, Benpres Bldg.
Exchange Road cor. Meralco Avenue
Pasig City

Sir:

This is in connection to [sic] your application to have a Notice of Lis Pendens [annotated] at the back of OCT Nos. O-1603 and O-1604 issued
in the name of ALFONSO SANDOVAL AND SPOUSE.

Pursuant to Sec. 76, PD No. 1529[,] the contents of the notice are the name[s] of the parties, the court where the action is pending, the date
the action was instituted and a copy of the compalint [sic] in order to determine if the person named in the title is impleaded.

We regret to inform you that the application, bereft of the original petition or compaint [sic] upon which this office will base its action, is
DENIED.

If you do not agree with our findings, you can, without withdrawing the documents you submitted, elevate the matter en consulta five (5)
days from receipt hereof to the Office of the Administrator, Land Registration Authority, East Avenue cor. NIA Road, Quezon City.

Very truly yours,

(signed)
EDGAR D. SANTOS
Register of Deeds

On 14 January 1999, three days after receipt of the letter, petitioners elevated the denial in consulta to the LRA. The case was docketed as
Consulta No. 2879.

The Ruling of the Land Registration Authority

In its resolution16 dated 21 May 1999, the LRA stated that the sole question for resolution is whether a notice of lis pendens is registrable
based on a motion to declare void the decrees and titles. The LRA agreed with the Register of Deeds that a notice of lis pendens based on a
motion is not registrable. Relying on Section 24, Rule 14 of the Rules of Court, the LRA ruled that only a party to a case has the legal
personality to file a notice of lis pendensrelative to the pending case.

The LRA focused on petitioners’ standing in LRC No. N-18887. The LRA declared that petitioners are not parties in LRC No. N-18887. Since a
land registration case is a proceeding in rem, an order of general default binds the whole world as a party in the case. Petitioners are mere
movants whose personality the court has not admitted. Based on Section 26 of PD 1529, the LRA ruled that petitioners should have filed a
motion to lift the order of general default. Pertinent portions of the LRA decision read:

Until and after the Order of General Default in LRC Case No. 18887 is lifted, petitioners cannot be clothed with personality as oppositors in
said land registration case by merely filing a motion after a judgement has been rendered. Such being the case, a notice of lis pendens on the
basis of the motion filed by petitioners cannot be admitted for registration. To rule otherwise would preempt the judgment of the Court in so
far as the personalities of the movants as oppositors in the land registration case is concerned.

WHEREFORE, premises considered, this Authority is of the opinion and so holds that the notice of lis pendens is not registrable.

SO ORDERED.17

The Ruling of the Court of Appeals

Undaunted, petitioners filed before the appellate court a petition for review of the LRA’s decision. Petitioners filed the petition on the ground
of manifest error and grave abuse of discretion on the part of the LRA Administrator when he ruled in Consulta No. 2879 that the notice of lis
pendens is not registrable.

The appellate court dismissed the petition for lack of merit. The appellate court reiterated the LRA’s ruling that only a party to a case has the
legal personality to file a notice of lis pendens. Petitioners have no legal personality because they failed to file a motion to lift the order of
general default in the land registration case.

Issues

Petitioners present the following issues for resolution of this Court:

1. WHETHER PETITIONERS’ MOTION TO DECLARE VOID THE DECREES ISSUED BY THE LAND REGISTRATION AUTHORITY IS A
PROPER BASIS FOR FILING THE NOTICE OF LIS PENDENS, and

2. WHETHER PETITIONERS CAN FILE THE MOTION TO DECLARE VOID THE DECREES ISSUED BY THE LAND REGISTRATION
COURT IN LRC CASE NO. N-18887 DESPITE THE FACT THAT THE COURT HAS NOT LIFTED THE GENERAL ORDER OF DEFAULT.18

The Ruling of the Court

The petition has no merit.

We agree with the observation of the appellate court that the pleadings filed by petitioners, public respondents and the Office of the Solicitor
General cite "more or less the same provisions of the laws as applicable in support of their respective contentions but differ x x x only with
respect to their interpretation thereof."19 With this observation in mind, we quote the pertinent provisions of the 1997 Rules of Civil
Procedure and of PD 1529.

Section 14, Rule 13 of the 1997 Rules of Civil Procedure provides:

SECTION 14. Notice of lis pendens. – In an action affecting the title or the right of possession of real property, the plaintiff and the defendant,
when affirmative relief is claimed in his answer, may record in the office of the registry of deeds of the province in which the property is
situated a notice of the pendency of the action. Said notice shall contain the names of the parties and the object of the action or defense, and a
description of the property in that province affected thereby. Only from the time of filing such notice for record shall a purchaser, or
encumbrancer of the property affected thereby, be deemed to have constructive notice of the pendency of the action, and only of its
pendency against the parties designated by their real names.

The notice of lis pendens hereinabove mentioned may be cancelled only upon order of the court, after proper showing that the notice is for
the purpose of molesting the adverse party, or that it is not necessary to protect the rights of the party who caused it to be recorded.

Section 76 of PD 1529 states:

SECTION 76. Notice of lis pendens. – No action to recover possession of real estate, or to quiet title thereto, or to remove clouds upon the title
thereof, or for partition or other proceedings of any kind in court directly affecting the title to land or the use or occupation thereof or the
buildings thereon, and no judgment, and no proceeding to vacate or reverse any judgment, shall have any effect upon registered land as
against persons other than the parties thereto, unless a memorandum or notice stating the institution of such action or proceeding and the
court wherein the same is pending, as well as the date of the institution thereof, together with a reference to the number of the certificate of
title, and an adequate description of the land affected and the registered owner thereof, shall have been filed and registered.

Notice of Lis Pendens

Lis pendens literally means a pending suit. The doctrine of lis pendens refers to the jurisdiction, power or control which a court acquires over
property involved in a suit, pending the continuance of the action, and until final judgment. 20

The purposes of lis pendens are (1) to protect the rights of the party causing the registration of the lis pendens, and (2) to advise third
persons who purchase or contract on the subject property that they do so at their peril and subject to the result of the pending litigation.21

The filing of a notice of lis pendens has a two-fold effect. First, it keeps the subject matter of the litigation within the power of the court until
the entry of the final judgment to prevent the defeat of the final judgment by successive alienations. Second, it binds a purchaser, bona fide or
not, of the land subject of the litigation to the judgment or decree that the court will promulgate subsequently. However, the filing of a notice
of lis pendens does not create a right or lien that previously did not exist.22

Without a notice of lis pendens, a third party who acquires the property after relying only on the certificate of title is a purchaser in good
faith. Against such third party, the supposed rights of a litigant cannot prevail, because the former is not bound by the property owner’s
undertakings not annotated in the transfer certificate of title.23 Thus, we have consistently held that —

The notice of lis pendens x x x is ordinarily recorded without the intervention of the court where the action is pending. The notice is but an
incident in an action, an extrajudicial one, to be sure. It does not affect the merits thereof. It is intended merely to constructively advise, or
warn, all people who deal with the property that they so deal with it at their own risk, and whatever rights they may acquire in the property
in any voluntary transaction are subject to the results of the action, and may well be inferior and subordinate to those which may be finally
determined and laid down therein. The cancellation of such a precautionary notice is therefore also a mere incident in the action, and may be
ordered by the Court having jurisdiction of it at any given time. And its continuance or removal x x x is not contingent on the existence of a
final judgment in the action, and ordinarily has no effect on the merits thereof. 24

A notice of lis pendens may involve actions that deal not only with title or possession of a property, but also with the use or occupation of a
property.25 The litigation must directly involve a specific property which is necessarily affected by the judgment. Magdalena Homeowners
Association, Inc. v. Court of Appeals26 enumerated the cases where a notice of lis pendens is appropriate:

[A] notice of lis pendens is proper in the following cases, viz:

a) An action to recover possession of real estate;

b) An action to quiet title thereto;

c) An action to remove clouds thereon;

d) An action for partition; and

e) Any other proceedings of any kind in Court directly affecting the title to the land or the use or occupation thereof or the buildings
thereon.

On the other hand, the doctrine of lis pendens has no application in the following cases:

a) Preliminary attachments;

b) Proceedings for the probate of wills;

c) Levies on execution;

d) Proceedings for administration of estate of deceased persons; and

e) Proceedings in which the only object is the recovery of a money judgment.27

As decreed by Section 76 of PD 1529, a notice of lis pendens should contain a statement of the institution of an action or proceeding, the court
where the same is pending, and the date of its institution. A notice of lis pendensshould also contain a reference to the number of the
certificate of title of the land, an adequate description of the land affected and its registered owner.l^vvphi1.net

The Register of Deeds denied registration of the notice of lis pendens because "the application was bereft of the original petition or
complaint upon which this office will base its action."28 In consulta to the LRA, petitioners pointed out that they have complied with the
requirements for the registration of the notice of lis pendens, as follows:

7.2.1 The Notice of Lis Pendens contains a statement of the filing by the Heirs of Eugenio Lopez of a motion to declare Original
Certificates of Title Nos. O-1603 and O-1604 null and void;

7.2.2 It contains the name of the court wherein the motion is pending which is "the registration court, Regional Trial Court, Branch
152, Pasig City." The date of the filing of the motion is shown on the motion itself wherein the receipt of said motion by the land
registration court on November 25, 1998 is duly stamped;

7.2.3 The numbers of the Original Certificates of Title Nos. O-1603 and O-1604 are clearly indicated in the notice;
 7.2.4 There is adequate description of the land affected in the Notice of Lis Pendens;

7.2.5 The names of the registered owners are indicated in Paragraph 4 of the Motion attached to the Notice;

7.2.6 A copy of the motion to declare OCT Nos. O-1603 and O-1604 null and void, dated November 25, 1998 upon which the
Register of Deeds of the Province of Rizal will base its action is attached as Annex "A" of the Notice of Lis Pendens. (Emphasis in the
original)29

Petitioners’ enumeration readily reveals that they have not complied with the requisites. Both the LRA and the appellate court denied the
application for a notice of lis pendens because petitioners are mere movants, and not original parties, in LRC No. N-18887. As petitioners are
not parties to an action as contemplated in Section 76 of PD 1529, they failed to present the requisite pleading to the Register of Deeds of
Marikina City. We hold that the Register of Deeds correctly denied the application for a notice of lis pendens.

Reconveyance

Petitioners committed a fatal procedural error when they filed a motion in LRC No. N-18887 on 16 July 1997. The remedy of petitioners is an
action for reconveyance against Sandoval, Ozaeta and their spouses. Reconveyance is based on Section 55 of Act No. 496, as amended by Act
No. 3322, which states that "xxx in all cases of registration procured by fraud the owner may pursue all his legal and equitable remedies
against the parties to such fraud, without prejudice, however, to the rights of any innocent holder for value of a certificate of title xxx."

An action for reconveyance is an action in personam available to a person whose property has been wrongfully registered under the Torrens
system in another’s name. Although the decree is recognized as incontrovertible and no longer open to review, the registered owner is not
necessarily held free from liens. As a remedy, an action for reconveyance is filed as an ordinary action in the ordinary courts of justice and
not with the land registration court.30Reconveyance is always available as long as the property has not passed to an innocent third person
for value.1awphi1.nét A notice of lis pendens may thus be annotated on the certificate of title immediately upon the institution of the action
in court. The notice of lis pendens will avoid transfer to an innocent third person for value and preserve the claim of the real owner.31

Necessity of a Motion to Lift the Order of General Default

In its comment,32 the LRA states that under Section 26 of PD 1529 the order of default includes petitioners. Therefore, petitioners’ failure to
move to lift the default order did not give them standing in the case. As long as the court does not lift the order of general default, petitioners
have no legal standing to file the motion to declare void the decrees of registration issued to the applicant. Section 26 of PD 1529 provides
thus:

Sec. 26. Order of default; effect. – If no person appears and answers within the time allowed, the court shall, upon motion of the applicant, no
reason to the contrary appearing, order a default to be recorded and require the applicant to present evidence. By the description in the
notice "To All Whom It May Concern", all the world are made parties defendant and shall be concluded by the default order.

Where an appearance has been entered and an answer filed, a default order shall be entered against persons who did not appear and
answer.

Petitioners’ justification for filing a motion to annul the decrees and titles, as opposed to filing a motion to lift the order of general default,
rests on two related assumptions. First, with the filing of the 16 July 1997 motion and giving of due course to the motion by the land
registration court, petitioners assert that they acquired legal standing in the registration proceedings. Second, buyer Eugenio Lopez, Sr.
stepped into the shoes of the sellers-applicants Sandoval and Ozaeta when applicants sold the property to him. As successors-in-interest of
the buyer, petitioners contend that they are not strangers to the proceedings.

To justify their two assumptions, petitioners traced the antecedent of Section 22 of PD 1529 to Section 29 of Act 496 33 and its judicial
interpretation in Mendoza v. Court of Appeals.34

Section 22 of PD 1529 provides:

SECTION 22. Dealings with land pending original registration.—After the filing of the application and before the issuance of the decree of
registration, the land therein described may still be the subject of dealings in whole or in part, in which case the interested party shall
present to the court the pertinent instruments together with the subdivision plan approved by the Director of Lands in case of transfer of
portions thereof, and the court, after notice to the parties, shall order such land registered subject to the conveyance or encumbrance
created by said instruments, or order that the decree of registration be issued in the name of the person to whom the property has been
conveyed by said instruments.

The pertinent portion of Section 29 of Act 496 provides:

SECTION 29. After the filing of the application and before the issuance of the decree of title by the Chief of the General Land Registration
Office, the land therein described may be dealt with and instruments relating thereto shall be recorded in the office of the register of deeds at
any time before issuance of the decree of title, in the same manner as if no application had been made. The interested party may, however,
present such instruments to the Court of First Instance instead of presenting them to the office of the Register of Deeds, together with a
motion that the same be considered in relation with the application, and the court, after notice to the parties shall order such land registered
subject to the encumbrance created by said instruments, or order the decree of registration issued in the name of the buyer or of the person
to whom the property has been conveyed by said instruments. x x x

Mendoza v. Court of Appeals35 explains the procedure in cases of conveyance of the land subject of a registration proceeding by an
instrument executed between the time of filing of the application for registration and the issuance of the decree of title.

The law does not require that the application for registration be amended by substituting the "buyer" or the "person to whom the property
has been conveyed" for the applicant. Neither does it require that the "buyer" or the "person to whom the property has been conveyed" be a
party to the case. He may thus be a total stranger to the land registration proceedings. The only requirements of the law are: (1) that the
instrument be presented to the court by the interested party together with a motion that the same be considered in relation with the
application; and (2) that prior notice be given to the parties to the case xxx.361awphi1.nét

Petitioners also assert that they do not dispute the judgment of the land registration court. However, this position is in conflict with their 25
November 1998 motion to have the decree and the titles declared void. Petitioners now assume the roles of both successors-in-interest and
oppositors. This confusion of roles brought about petitioners’ grave error in procedure.

The land registration court granted the application in LRC No. N-18887 on 31 May 1966 and issued a certificate of finality dated 8 March
1991. Petitioners filed their motion to consider the deed of sale in the registration on 16 July 1997. Petitioners filed their motion to have the
decrees and the corresponding certificates of title declared void on 25 November 1998. Petitioners filed both motions long after the decision
in LRC No. N-18887 became final and executory. Neither petitioners nor even the applicants from whom they base their claim presented the
Deed of Sale before the land registration court while the action was pending.

Considering the facts and arguments as presented above, we hold that the motion filed by petitioners is insufficient to give them standing in
the land registration proceedings for purposes of filing an application of a notice of lis pendens. However, we disagree with the LRA and the
appellate court’s observation that petitioners need to file a motion to lift the order of general default. A motion to lift the order of general
default should be filed before entry of final judgment. The land registration court granted the application for registration of title on 31 May
1966 and issued a certificate of finality on 8 March 1991. Petitioners filed their motion on 16 July 1997. Thus, even if petitioners filed a
motion to lift the order of general default, the order of default could not be set aside because the motion was filed out of time.

In Lim Toco v. Go Fay,37 this Court explained the effect of an order of default to the party defaulted. A party declared in default loses his
standing in court. As a result of his loss of standing, a party in default cannot appear in court, adduce evidence, be heard, or be entitled to
notice. A party in default cannot even appeal from the judgment rendered by the court, unless he files a motion to set aside the order of
default under the grounds provided in what is now Section 3, Rule 9 of the 1997 Rules of Civil Procedure.

Indeed, in its comment before this Court, the LRA stated thus:

Under Section 26, PD 1429, petitioners are deemed to have been included by the default order. Those who did not file an answer should be
considered as having lost their standing in court from that stage (Republic v. Dela Rosa, 173 SCRA 12) except when they file a motion to set
aside the order [of] default on the grounds mentioned in Section 3, Rule 18 of the Rules of Court (Toco v. Fay, 80 Phil. 166).

In land registration cases (as in the said LRC No. N-18887), an order of general default was deemed to have been issued based on the
presumption of regularity in judicial proceedings (Pascual, et al. v. Ortega, et al., 58 O.G. 12 March 1962 C.A.). Petitioners failed to adduce any
evidence showing that the order of general default was lifted. Records disclosed that without first filing a motion to lift the order of general
default, petitioners filed a motion to declare as null and void the decrees and titles. Until the order of general default is lifted by the court,
petitioner could not be considered as a party to the action. They are deemed movants whose personality as far as the case is concerned is not
yet admitted by the court considering that the order of default has not been lifted.38

One should be careful, however, to distinguish between movants as mere interested parties prescribed under Section 22 of PD 1529 and
movants as intervenors-oppositors to the land registration proceedings. It is only in the latter case that a motion to lift the order of general
default is required. It is only in the latter case that the doctrine pronounced in Serrano v. Palacio,39 as repeatedly invoked by the LRA and
OSG, is applicable:

x x x [P]etitioners committed an error of procedure when they filed a motion to intervene in the x x x land registration case for the proper
procedure would have been for them to ask first for the lifting of the order of general default, and then, if lifted, to file an opposition to the
application of the applicants. This is so because proceedings in land registration are in rem, and not in personam, the sole object being the
registration applied for, and not the determination of any right not connected with the registration (Estila vs. Alvero, 37 Phil. 498).

Petitioners are not mere interested parties in this case. By filing their motion to have the decrees and the corresponding certificates of title
declared void, they took the role of oppositors to the application for land registration.

The appellate court stated that "in as much as it would want to oblige to the plea of petitioners to hasten or expedite the proceedings and to
avoid further expenses on the part of the petitioners, however[,] (it) could not."40 Indeed, it requires a delicate balancing act between the
objective of the Rules of Court to secure a just, speedy and inexpensive disposition of every action and proceeding 41 and the strict
requirements for a notice of lis pendens. The facts in this case show that petitioners have not complied with the requirements.

WHEREFORE, we DENY the petition. We AFFIRM the Decision of the Court of Appeals in CA-G.R. SP No. 55993 dated 29 November 2000.

SO ORDERED.