REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE DEPARTMENT OF EDUCATION DIVISION OF LIPA CITY (FOR PANINSINGIN PRIMARY SCHOOL), petitioner,

vs. PRIMO MENDOZA and MARIA LUCERO, respondents. The Facts and the Case Paninsingin Primary School (PPS) is a public school operated by petitioner Republic of the Philippines (the Republic) through the Department of Education. PPS has been using 1,149 square meters of land in Lipa City, Batangas since 1957 for its school. But the property, a portion of Lots 1923 and 1925, were registered in the name of respondents Primo and Maria Mendoza (the Mendozas) under Transfer Certificate of Title (TCT) T-11410. 1 On March 27, 1962 the Mendozas caused Lots 1923 and 1925 to be consolidated and subdivided into four lots, as follows: Lot 1 292 square meters in favor of Claudia Dimayuga; Lot 2 292 square meters in favor of the Mendozas; Lot 3 543 square meters in favor of Gervacio Ronquillo; and Lot 4 1,149 square meters in favor of the City Government of Lipa. 2 As a result of subdivision, the Register of Deeds partially cancelled TCT T-11410 and issued new titles for Lots 1 and 3 in favor of Dimayuga and Ronquillo, respectively. Lot 2 remained in the name of the Mendozas but no new title was issued in the name of the City Government of Lipa for Lot 4. 3 Meantime, PPS remained in possession of the property. IaESCH The Republic claimed that, while no title was issued in the name of the City Government of Lipa, the Mendozas had relinquished to it their right over the school lot as evidenced by the consolidation and subdivision plan. Further, the property had long been tax-declared in the name of the City Government and PPS built significant, permanent improvements on the same. These improvements had also been tax-declared. 4 The Mendozas claim, on the other hand, that although PPS sought permission from them to use the property as a school site, they never relinquished their right to it. They allowed PPS to occupy the property since they had no need for it at that time. Thus, it has remained registered in their name under the original title, TCT T-11410, which had only been partially cancelled. On November 6, 1998 the Mendozas wrote PPS, demanding that it vacate the disputed property. 5 When PPS declined to do so, on January 12, 1999 the Mendozas filed a complaint with the Municipal Trial Court in Cities (MTCC) of Lipa City in Civil Case 0002-99 against PPS for unlawful detainer with application for temporary restraining order and writ of preliminary injunction. 6 On July 13, 1999 the MTCC rendered a decision, dismissing the complaint on ground of the Republic's immunity from suit. 7 The Mendozas appealed to the Regional Trial Court (RTC) of Lipa City which ruled that the Republic's consent was not necessary since the action before the MTCC was not against it. 8 In light of the RTC's decision, the Mendozas filed with the MTCC a motion to render judgment in the case before it. 9 The MTCC denied the motion, however, saying that jurisdiction over the case had passed to the RTC upon appeal. 10 Later, the RTC remanded the case back to the MTCC, 11 which then dismissed the case for insufficiency of evidence. 12 Consequently, the Mendozas once again appealed to the RTC in Civil Case 2001-0236. On June 27, 2006 the RTC found in favor of the Mendozas and ordered PPS to vacate the property. It held that the Mendozas 1

had the better right of possession since they were its registered owners. PPS, on the other hand, could not produce any document to prove the transfer of ownership of the land in its favor. 13 PPS moved for reconsideration, but the RTC denied it. The Republic, through the Office of the Solicitor General (OSG), appealed the RTC decision to the Court of Appeals (CA) in CA-G.R. SP 96604 on the grounds that: (1) the Mendozas were barred by laches from recovering possession of the school lot; (2) sufficient evidence showed that the Mendozas relinquished ownership of the subject lot to the City Government of Lipa City for use as school; and (3) Lot 4, Pcs5019 has long been declared in the name of the City Government since 1957 for taxation purposes. 14 In a decision dated February 26, 2008, the CA affirmed the RTC decision. 15 Upholding the Torrens system, it emphasized the indefeasibility of the Mendozas' registered title and the imprescriptible nature of their right to eject any person occupying the property. The CA held that, this being the case, the Republic's possession of the property through PPS should be deemed merely a tolerated one that could not ripen into ownership. DIEcHa The CA also rejected the Republic's claim of ownership since it presented no documentary evidence to prove the transfer of the property in favor of the government. Moreover, even assuming that the Mendozas relinquished their right to the property in 1957 in the government's favor, the latter never took steps to have the title to the property issued in its name or have its right as owner annotated on the Mendozas' title. The CA held that, by its omissions, the Republic may be held in estoppel to claim that the Mendozas were barred by laches from bringing its action. With the denial of its motion for reconsideration, the Republic has taken recourse to this Court via petition for review on certiorari under Rule 45. The Issue Presented The issue in this case is whether or not the CA erred in holding that the Mendozas were entitled to evict the Republic from the subject property that it had used for a public school. The Court's Ruling A decree of registration is conclusive upon all persons, including the Government of the Republic and all its branches, whether or not mentioned by name in the application for registration or its notice. 16 Indeed, title to the land, once registered, is imprescriptible. 17 No one may acquire it from the registered owner by adverse, open, and notorious possession. 18 Thus, to a registered owner under the Torrens system, the right to recover possession of the registered property is equally imprescriptible since possession is a mere consequence of ownership. Here, the existence and genuineness of the Mendozas' title over the property has not been disputed. While the consolidation and subdivision plan of Lots 1923 and 1925 shows that a 1,149 square meter lot had been designated to the City Government, the Republic itself admits that no new title was issued to it or to any of its subdivisions for the portion that PPS had been occupying since 1957. 19 That the City Government of Lipa tax-declared the property and its improvements in its name cannot defeat the Mendozas' title. This Court has allowed tax declarations to stand as proof of ownership only in the absence of a certificate of title. 20 Otherwise, they have little evidentiary weight as proof of ownership. 21 The CA erred, however, in ordering the eviction of PPS from the property that it had held as government school site for more than 50 years. The evidence on record shows that the Mendozas intended to cede the property to the City Government of Lipa permanently. In fact, they allowed the city to declare the property in its name for tax purposes. And when they sought in 1962 to have the bigger lot subdivided

into four, the Mendozas earmarked Lot 4, containing 1,149 square meters, for the City Government of Lipa. Under the circumstances, it may be assumed that the Mendozas agreed to transfer ownership of the land to the government, whether to the City Government of Lipa or to the Republic, way back but never got around to do so and the Republic itself altogether forgot about it. Consequently, the Republic should be deemed entitled to possession pending the Mendozas' formal transfer of ownership to it upon payment of just compensation. aHICDc The Court holds that, where the owner agrees voluntarily to the taking of his property by the government for public use, he thereby waives his right to the institution of a formal expropriation proceeding covering such property. Further, as the Court also held in Eusebio v. Luis, 22 the failure for a long time of the owner to question the lack of expropriation proceedings covering a property that the government had taken constitutes a waiver of his right to gain back possession. The Mendozas' remedy is an action for the payment of just compensation, not ejectment. In Republic of the Philippines v. Court of Appeals, 23 the Court affirmed the RTC's power to award just compensation even in the absence of a proper expropriation proceeding. It held that the RTC can determine just compensation based on the evidence presented before it in an ordinary civil action for recovery of possession of property or its value and damages. As to the time when just compensation should be fixed, it is settled that where property was taken without the benefit of expropriation proceedings and its owner filed an action for recovery of possession before the commencement of expropriation proceedings, it is the value of the property at the time of taking that is controlling. 24 Since the MTCC did not have jurisdiction either to evict the Republic from the land it had taken for public use or to hear and adjudicate the Mendozas' right to just compensation for it, the CA should have ordered the complaint for unlawful detainer dismissed without prejudice to their filing a proper action for recovery of such compensation. WHEREFORE, the Court partially GRANTS the petition, REVERSES the February 26, 2008 decision and the October 20, 2008 resolution of the Court of Appeals in CAG.R. 96604, and ORDERS the dismissal of respondents Primo and Maria Mendoza's action for eviction before the Municipal Trial Court in Cities of Lipa City in Civil Case 0002-99 without prejudice to their filing an action for payment of just compensation against the Republic of the Philippines or, when appropriate, against the City of Lipa. SO ORDERED. D.B.T. MAR-BAY CONSTRUCTION, INCORPORATED, petitioner, vs. RICAREDO PANES, ANGELITO PANES, SALVADOR CEA, ABOGADO MAUTIN, DONARDO PACLIBAR, ZOSIMO PERALTA and HILARION MANONGDO, respondents. Subject of this controversy is a parcel of land identified as Lot Plan Psu-123169, 4 containing an area of Two Hundred Forty Thousand One Hundred Forty-Six (240,146) square meters, and situated at Barangay (Brgy.) Pasong Putik, Novaliches, Quezon City (subject property). The property is included in Transfer Certificate of Title (TCT) No. 200519, 5 entered on July 19, 1974 and issued in favor of B.C. Regalado & Co. (B.C. Regalado). It was conveyed by B.C. Regalado to petitioner D.B.T. Mar-Bay Construction, Inc. (DBT) through a dacion en pago 6 for services rendered by the latter to the former. On June 24, 1992, respondents Ricaredo P. Panes (Ricaredo), his son Angelito P. Panes (Angelito), Salvador Cea, Abogado Mautin, Donardo Paclibar, Zosimo P. Peralta, and Hilarion Manongdo (herein collectively referred to as respondents) filed a Complaint 7 for "Quieting of Title with Cancellation of TCT No. 200519 and all Titles derived thereat (sic), Damages, with Petition for the Issuance of Injunction with Prayer for the Issuance of Restraining Order Ex-Parte, Etc." against B.C. Regalado, Mar-Bay Realty, Inc., Spouses Gereno Brioso and Criselda M. Brioso, Spouses Ciriaco and Nellie Mariano, 2

Avelino C. Perdido and Florentina Allado, Eufrocina A. Maborang and Fe Maborang, Spouses Jaime and Rosario Tabangcura, Spouses Oscar Ikalina and the Register of Deeds (RD) of Quezon City. Subsequently, respondents filed an Amended Complaint 8 and a Second Amended Complaint 9 particularly impleading DBT as one of the defendants. TCHEDA In the Complaints, Ricaredo alleged that he is the lawful owner and claimant of the subject property which he had declared for taxation purposes in his name, and assessed in the amount of P2,602,190.00 by the City Assessor of Quezon City as of the year 1985. Respondents alleged that per Certification10 of the Department of Environment and Natural Resources (DENR) National Capital Region (NCR) dated May 7, 1992, Lot Plan Psu-123169 was verified to be correct and on file in said office, and approved on July 23, 1948. Respondents also claimed that Ricaredo, his immediate family members, and the other respondents had been, and still are, in actual possession of the portions of the subject property, and their possession preceded the Second World War. To perfect his title in accordance with Act No. 496 (The Land Registration Act) as amended by Presidential Decree (P.D.) No. 1529 (The Property Registration Decree), Ricaredo filed with the RTC of Quezon City, Branch 82 a case docketed as LRC Case No. Q-91-011, with LRC Rec. No. N-62563. 11 Respondents averred that in the process of complying with the publication requirements for the Notice of Initial Hearing with the Land Registration Authority (LRA), it was discovered by the Mapping Services of the LRA that there existed an overlapping of portions of the land subject of Ricaredo's application, with the subdivision plan of B.C. Regalado. The said portion had, by then, already been conveyed by B.C. Regalado to DBT. Ricaredo asseverated that upon verification with the LRA, he found that the subdivision plan of B.C. Regalado was deliberately drawn to cover portions of the subject property. Respondents claimed that the title used by B.C. Regalado in the preparation of the subdivision plan did not actually cover the subject property. They asserted that from the records of B.C. Regalado, they gathered that TCT Nos. 211081, 12 211095 13 and 211132, 14 which allegedly included portions of the subject property, were derived from TCT No. 200519. However, TCT No. 200519 only covered Lot 503 of the Tala Estate with an area of Twenty-Two Thousand Six Hundred Fifteen (22,615) square meters, and was different from those mentioned in TCT Nos. 211081, 211095 and 211132. According to respondents, an examination of TCT No. 200519 would show that it was derived from TCT Nos. 14814, 15 14827, 16 14815 17 and T-28. In essence, respondents alleged that B.C. Regalado and DBT used the derivative titles which covered properties located far from Pasong Putik, Novaliches, Quezon City where the subject property is located, and B.C. Regalado and DBT then offered the same for sale to the public. Respondents thus submitted that B.C Regalado and DBT through their deliberate scheme, in collusion with others, used (LRC) Pcs-18345 as shown in the consolidation-subdivision plan to include the subject property covered by Lot Plan Psu-123169. cITaCS In his Answer 18 dated July 24, 1992, the RD of Quezon City interposed the defense that at the time of registration, he found all documents to be in order. Subsequently, on December 5, 1994, in his Motion 19 for Leave to Admit Amended Answer, with the Amended Answer attached, he admitted that he committed a grave mistake when he earlier said that TCT No. 200519 covered only one lot, i.e. Lot 503. He averred that upon careful examination, he discovered that TCT No. 200519 is composed of 17 pages, and actually covered 54 lots, namely: Lots 503, 506, 507, 508, 509, 582, 586, 655, 659, 686, 434, 495, 497, 299, 498, 499, 500, 501, 502, 493, 692, 776, 496, 785, 777, 786, 780, 783, 505, 654, 660, 661, 663, 664, 665, 668, 693, 694, 713, 716, 781, 779, 784, 782, 787, 893, 1115, 1114, 778, 669 and 788, all of the Tala Estate. Other lots included therein are Lot 890-B of Psd 36854, Lot 2 of (LRC) Pcs 12892 and Lot 3 of (LRC) Pcs 12892. Thus, respondents' allegation that Lots 661, 664, 665, 693 and 694 of the Tala Estate were not included in TCT No. 200519 was not true.

On December 28, 1993, then defendants Spouses Jaime and Rosario Tabangcura (Spouses Tabangcura) filed their Answer 20 with Counterclaim, claiming that they were buyers in good faith and for value when they bought a house and lot covered by TCT No. 211095 from B.C. Regalado, the latter being a subdivision developer and registered owner thereof, on June 30, 1986. When respondent Abogado Mautin entered and occupied the property, Spouses Tabangcura filed a case for Recovery of Property before the RTC, Quezon City, Branch 97 which rendered a decision 21 in their favor. On its part, DBT, traversing the complaint, alleged that it is the legitimate owner and occupant of the subject property pursuant to a dacion en pagoexecuted by B.C. Regalado in the former's favor; that respondents were not real parties-ininterests because Ricaredo was a mere claimant whose rights over the property had yet to be determined by the RTC where he filed his application for registration; that the other respondents did not allege matters or invoke rights which would entitle them to the relief prayed for in their complaint; that the complaint was premature; and that the action inflicted a chilling effect on the lot buyers of DBT. 22 The RTC's Rulings On June 15, 2000, the RTC through Judge Marciano I. Bacalla (Judge Bacalla), rendered a Decision 23 in favor of the respondents. The RTC held that the testimony of Ricaredo that he occupied the subject property since 1936 when he was only 16 years old had not been rebutted; that Ricaredo's occupation and cultivation of the subject property for more than thirty (30) years in the concept of an owner vested in him equitable ownership over the same by virtue of an approved plan, Psu 123169; that the subject property was declared under the name of Ricaredo for taxation purposes; 24 and that the subject property per survey should not have been included in TCT No. 200519, registered in the name of B.C. Regalado and ceded to DBT. The RTC further held that Spouses Tabangcura failed to present satisfactory evidence to prove their claim. Thus, the RTC disposed of the case in this wise: WHEREFORE, in view of the foregoing considerations, judgment is hereby rendered declaring Certificate of Title No. 200519 and all titles derived thereat as null and void insofar as the same embrace the land covered by Plan PSU123169 with an area of 240,146 square meters in the name of Ricaredo Panes; ordering defendant DBT Marbay Realty, Inc. to pay plaintiff Ricaredo Panes the sum of TWENTY THOUSAND (P20,000) pesos as attorney's fees plus costs of suit. SO ORDERED. On September 12, 2000, DBT filed a Motion 25 for Reconsideration, based on the grounds of prescription and laches. DBT also disputed Ricaredo's claim of open, adverse, and continuous possession of the subject property for more than thirty (30) years, and asserted that the subject property could not be acquired by prescription or adverse possession because it is covered by TCT No. 200519. While the said Motion for Reconsideration was pending, Judge Bacalla passed away. Meanwhile, on January 2, 2001, a Motion 26 for Intervention and a Complaint in Intervention were filed by Atty. Andres B. Pulumbarit (Atty. Pulumbarit), representing the Don Pedro/Don Jose de Ocampo Estate. The intervenor alleged that the subject property formed part of the vast tract of land with an area of 117,000 hectares, covered by Original Certificate of Title (OCT) No. 779 issued by the Honorable Norberto Romualdez on March 14, 1913 under Decree No. 10139, which belongs to the Estate of Don Pedro/Don Jose de Ocampo. Thus, the Complaint 27 in Intervention prayed that the RTC's Decision be reconsidered; that the legitimacy and superiority of OCT 779 be upheld; and that the subject property be declared as belonging to the Estate of Don Pedro/Don Jose de Ocampo. 3

In its Order 28 dated March 13, 2001, the RTC, through Acting Judge Modesto C. Juanson (Judge Juanson), denied Atty. Pulumbarit's Motion for Intervention because a judgment had already been rendered pursuant to Section 2, 29 Rule 19 of the 1997 Rules of Civil Procedure. On April 10, 2001, the RTC issued an Order 30 stating that there appeared to be a need for a clarificatory hearing before it could act on DBT's Motion for Reconsideration. Thus, a hearing was held on May 17, 2001. Thereafter, supplemental memoranda were required of the parties. 31 Both parties complied.32 However, having found that the original copy of TCT No. 200519 was not submitted to it for comparison with the photocopy thereof on file, the RTC directed DBT to present the original or certified true copy of the TCT on August 21, 2001. 33 Respondents moved to reconsider the said directive 34 but the same was denied. 35 DBT, on the other hand, manifested that a copy of TCT No. 200519, consisting of 17 pages, had already been admitted in evidence; and that because of the fire in the Office of the RD in Quezon City sometime in 1988, DBT, despite diligent effort, could not secure an original or certified true copy of said TCT. Instead, DBT submitted a certified true copy of Consolidated Subdivision Plan Pcs 18345. 36 On November 8, 2001, the RTC, through Judge Juanson, issued an Order 37 reversing the earlier RTC Decision and dismissing the Complaint for lack of merit. The RTC held that prescription does not run against registered land; hence, a title once registered cannot be defeated even by adverse, open or notorious possession. Moreover, the RTC opined that even if the subject property could be acquired by prescription, respondents' action was already barred by prescription and/or laches because they never asserted their rights when B.C. Regalado registered the subject property in 1974; and later developed, subdivided and sold the same to individual lot buyers. On December 18, 2001, respondents filed a Motion for Reconsideration 38 which the RTC denied in its Order 39 dated June 17, 2002. Aggrieved, respondents appealed to the CA. 40 CAIHaE The CA's Ruling On October 25, 2004, the CA reversed and set aside the RTC Orders dated November 8, 2001 and June 17, 2002 and reinstated the RTC Decision dated June 15, 2000. The CA held that the properties described and included in TCT No. 200519 are located in San Francisco del Monte, San Juan del Monte, Rizal and Cubao, Quezon City while the subject property is located in Brgy. Pasong Putik, Novaliches, Quezon City. Furthermore, the CA held that Engr. Vertudazo's testimony that there is a gap of around 1,250 meters between Lot 503 and Psu 123169 was not disproved or refuted. The CA found that Judge Juanson committed a procedural infraction when he entertained issues and admitted evidence presented by DBT in its Motion for Reconsideration which were never raised in the pleadings and proceedings prior to the rendition of the RTC Decision. The CA opined that DBT's claims of laches and prescription clearly appeared to be an afterthought. Lastly, the CA held that DBT's Motion for Reconsideration was not based on grounds enumerated in the Rules of Procedure. 41 Petitioner filed a Motion for Reconsideration, 42 which was, however, denied by the CA in its Resolution 43 dated February 22, 2005. Hence, this Petition. The Issues Petitioner raises the following as grounds for this Petition: I. PETITIONER'S FAILURE TO ALLEGE PRESCRIPTION IN ITS ANSWER IS NOT A WAIVER OF SUCH DEFENSE.

II. IT IS NOT ERRONEOUS TO REQUIRE THE PRODUCTION OF A CERTIFIED TRUE COPY OF TCT NO. 200519 AFTER THE DECISION ON THE MERITS HAS BEEN RENDERED BUT BEFORE IT BECAME FINAL. III. A REGISTERED LAND CAN NOT BE ACQUIRED BY ACQUISITIVE PRESCRIPTION. IV. THE TESTIMONY OF ENGR. VERTUDAZO ON THE BASIS OF THE TECHNICAL DESCRIPTION OF LOT 503 IN AN INCOMPLETE DOCUMENT IS UNRELIABLE. V. MR. PANES HAS NEVER BEEN IN OPEN, ADVERSE AND CONTINUOUS POSSESSION OF THE SUBJECT PROPERTY FOR MORE THAN THIRTY (30) YEARS. 44 Distilled from the petition and the responsive pleadings, and culled from the arguments of the parties, the issues may be reduced to two questions, namely: 1)Did the RTC err in upholding DBT's defenses of prescription and laches as raised in the latter's Motion for Reconsideration? 2)Which between DBT and the respondents have a better right over the subject property? Our Ruling We answer the first question in the affirmative. It is true that in Dino v. Court of Appeals 45 we ruled: (T)rial courts have authority and discretion to dismiss an action on the ground of prescription when the parties' pleadings or other facts on record show it to be indeed time-barred; (Francisco v. Robles, Feb. 15, 1954; Sison v. McQuaid, 50 O.G. 97; Bambao v. Lednicky, Jan. 28, 1961;Cordova v. Cordova, Jan. 14, 1958; Convets, Inc. v. NDC, Feb. 28, 1958; 32 SCRA 529; Sinaon v. Sorongan, 136 SCRA 408); and it may do so on the basis of a motion to dismiss (Sec. 1, [f] Rule 16, Rules of Court), or an answer which sets up such ground as an affirmative defense (Sec. 5, Rule 16), or even if the ground is alleged after judgment on the merits, as in a motion for reconsideration (Ferrer v. Ericta, 84 SCRA 705); or even if the defense has not been asserted at all, as where no statement thereof is found in the pleadings (Garcia v. Mathis, 100 SCRA 250; PNB v. Pacific Commission House, 27 SCRA 766; Chua Lamco v. Dioso, et al., 97 Phil. 821); or where a defendant has been declared in default (PNB v. Perez; 16 SCRA 270). What is essential only, to repeat, is that the facts demonstrating the lapse of the prescriptive period be otherwise sufficiently and satisfactorily 4

apparent on the record; either in the averments of the plaintiff's complaint, or otherwise established by the evidence. (Emphasis supplied) Indeed, one of the inherent powers of courts is to amend and control its processes so as to make them conformable to law and justice. This includes the right to reverse itself, especially when in its opinion it has committed an error or mistake in judgment, and adherence to its decision would cause injustice.46 Thus, the RTC in its Order dated November 8, 2001 could validly entertain the defenses of prescription and laches in DBT's motion for reconsideration. However, the conclusion reached by the RTC in its assailed Order was erroneous. The RTC failed to consider that the action filed before it was not simply for reconveyance but an action for quieting of title which is imprescriptible. Verily, an action for reconveyance can be barred by prescription. When an action for reconveyance is based on fraud, it must be filed within four (4) years from discovery of the fraud, and such discovery is deemed to have taken place from the issuance of the original certificate of title. On the other hand, an action for reconveyance based on an implied or constructive trust prescribes in ten (10) years from the date of the issuance of the original certificate of title or transfer certificate of title. The rule is that the registration of an instrument in the Office of the RD constitutes constructive notice to the whole world and therefore the discovery of the fraud is deemed to have taken place at the time of registration. 47 However, the prescriptive period applies only if there is an actual need to reconvey the property as when the plaintiff is not in possession of the property. If the plaintiff, as the real owner of the property also remains in possession of the property, the prescriptive period to recover title and possession of the property does not run against him. In such a case, an action for reconveyance, if nonetheless filed, would be in the nature of a suit for quieting of title, an action that is imprescriptible. 48 Thus, in Vda. de Gualberto v. Go, 49 this Court held: [A]n action for reconveyance of a parcel of land based on implied or constructive trust prescribes in ten years, the point of reference being the date of registration of the deed or the date of the issuance of the certificate of title over the property, but this rule applies only when the plaintiff or the person enforcing the trust is not in possession of the property, since if a person claiming to be the owner thereof is in actual possession of the property, as the defendants are in the instant case, the right to seek reconveyance, which in effect seeks to quiet title to the property, does not prescribe. The reason for this is that one who is in actual possession of a piece of land claiming to be the owner thereof may wait until his possession is disturbed or his title is attacked before taking steps to vindicate his right, the reason for the rule being, that his undisturbed possession gives him a continuing right to seek the aid of a court of equity to ascertain and determine the nature of the adverse claim of a third party and its effect on his own title, which right can be claimed only by one who is in possession. CAHTIS Insofar as Ricaredo and his son, Angelito, are concerned, they established in their testimonies that, for some time, they possessed the subject property and that Angelito bought a house within the subject property in 1987. 50 Thus, the respondents are proper parties to bring an action for quieting of title because persons having legal, as well as equitable, title to or interest in a real property may bring such action, and "title" here does not necessarily denote a certificate of title issued in favor of the person filing the suit. 51

Although prescription and laches are distinct concepts, we have held, nonetheless, that in some instances, the doctrine of laches is inapplicable where the action was filed within the prescriptive period provided by law. Therefore, laches will not apply to this case, because respondents' possession of the subject property has rendered their right to bring an action for quieting of title imprescriptible and, hence, not barred by laches. Moreover, since laches is a creation of equity, acts or conduct alleged to constitute the same must be intentional and unequivocal so as to avoid injustice. Laches will operate not really to penalize neglect or sleeping on one's rights, but rather to avoid recognizing a right when to do so would result in a clearly inequitable situation. 52

It must also be noted that portions of the subject property had already been sold to third persons who, like DBT, are innocent purchasers in good faith and for value, relying on the certificates of title shown to them, and who had no knowledge of any defect in the title of the vendor, or of facts sufficient to induce a reasonably prudent man to inquire into the status of the subject property. 63 To disregard these circumstances simply on the basis of alleged continuous and adverse possession of respondents would not only be inimical to the rights of the aforementioned titleholders, but would ultimately wreak havoc on the stability of the Torrens system of registration. A final note. While the Torrens system is not a mode of acquiring title, but merely a system of registration of titles to lands, justice and equity demand that the titleholder should not be made to bear the unfavorable effect of the mistake or negligence of the State's agents, in the absence of proof of his complicity in a fraud or of manifest damage to third persons. The real purpose of the Torrens system is to quiet title to land and put a stop forever to any question as to the legality of the title, except claims that were noted in the certificate at the time of the registration or that may arise subsequent thereto. Otherwise, the integrity of the Torrens system would forever be sullied by the ineptitude and inefficiency of land registration officials, who are ordinarily presumed to have regularly performed their duties. 64 Thus, where innocent third persons, relying on the correctness of the certificate of title thus issued, acquire rights over the property, the court cannot disregard those rights and order the cancellation of the certificate. The effect of such outright cancellation will be to impair public confidence in the certificate of title. The sanctity of the Torrens system must be preserved; otherwise, everyone dealing with the property registered under the system will have to inquire in every instance on whether the title had been regularly or irregularly issued, contrary to the evident purpose of the law. Every person dealing with the registered land may safely rely on the correctness of the certificate of title issued therefor, and the law will in no way oblige him to go behind the certificate to determine the condition of the property. 65 WHEREFORE, the instant Petition is GRANTED and the assailed Court of Appeals Decision dated October 25, 2004 is hereby REVERSED and SET ASIDE. A new judgment is hereby entered DISMISSING the Complaint filed by the respondents for lack of merit. SO ORDERED. DIONISIO CARAAN, represented by HEIDI CARAAN and ERLINDA CARAAN, petitioners, vs. COURT OF APPEALS and SPOUSES SALCEDO R. COSME and NORA LINDA S. COSME, respondents. This resolves the petition for review on certiorari seeking to set aside the Decision 1 of the Court of Appeals (CA) dated October 29, 1999 affirming with modification the Decision of the Regional Trial Court of Quezon City, Branch 104 (RTC), thereby ordering herein petitioners to vacate the property located at No. 65 Commodore St., Veterans Subdivision, Barangay Holy Spirit, Quezon City and surrender possession thereof to herein private respondents. The antecedent facts are as follows. On September 16, 1992, private respondents-spouses Salcedo R. Cosme and Nora Linda S. Cosme filed a complaint (accion reivindicatoria) with damages against Dionisio Caraan in the RTC. Therein, it was alleged that: herein private respondents are the registered owners of the real property located at No. 65 Commodore St., Veterans Subdivision, Barangay Holy Spirit, Quezon City under Transfer Certificate of Title (TCT) No. 214949; they had been paying realty taxes on the property from 1969 to 1993; sometime in March 1991, they discovered that the land was being occupied by petitioner who had built his residential house thereon; such occupancy by petitioner was effected through fraud, strategy and stealth without private respondents' knowledge and consent; demands to vacate, both oral and 5

Albeit the conclusion of the RTC in its Order dated November 8, 2001, which dismissed respondents' complaint on grounds of prescription and laches, may have been erroneous, we, nevertheless, resolve the second question in favor of DBT. It is a well-entrenched rule in this jurisdiction that no title to registered land in derogation of the rights of the registered owner shall be acquired by prescription or adverse possession. 53 Article 1126 54 of the Civil Code in connection with Section 46 55 of Act No. 496 (The Land Registration Act), as amended by Section 47 56 of P.D. No. 1529 (The Property Registration Decree), clearly supports this rule. Prescription is unavailing not only against the registered owner but also against his hereditary successors. Possession is a mere consequence of ownership where land has been registered under the Torrens system, the efficacy and integrity of which must be protected. Prescription is rightly regarded as a statute of repose whose objective is to suppress fraudulent and stale claims from springing up at great distances of time and surprising the parties or their representatives when the facts have become obscure from the lapse of time or the defective memory or death or removal of witnesses. 57 Thus, respondents' claim of acquisitive prescription over the subject property is baseless. Under Article 1126 of the Civil Code, acquisitive prescription of ownership of lands registered under the Land Registration Act shall be governed by special laws. Correlatively, Act No. 496, as amended by PD No. 1529, provides that no title to registered land in derogation of that of the registered owner shall be acquired by adverse possession. Consequently, in the instant case, proof of possession by the respondents is immaterial and inconsequential. 58 Moreover, it may be stressed that there was no ample proof that DBT participated in the alleged fraud. While factual issues are admittedly not within the province of this Court, as it is not a trier of facts and is not required to re-examine or contrast the oral and documentary evidence anew, we have the authority to review and, in proper cases, reverse the factual findings of lower courts when the findings of fact of the trial court are in conflict with those of the appellate court. 59 In this regard, we reviewed the records of this case and found no clear evidence that DBT participated in the fraudulent scheme. InRepublic v. Court of Appeals, 60 this Court gave due importance to the fact that the private respondent therein did not participate in the fraud averred. We accord the same benefit to DBT in this case. To add, DBT is an innocent purchaser for value and good faith which, through a dacion en pago duly entered into with B.C. Regalado, acquired ownership over the subject property, and whose rights must be protected under Section 32 61 of P.D. No. 1529. Dacion en pago is the delivery and transmission of ownership of a thing by the debtor to the creditor as an accepted equivalent of the performance of the obligation. It is a special mode of payment where the debtor offers another thing to the creditor, who accepts it as an equivalent of the payment of an outstanding debt. In its modern concept, what actually takes place in dacion en pago is an objective novation of the obligation where the thing offered as an accepted equivalent of the performance of an obligation is considered as the object of the contract of sale, while the debt is considered as the purchase price. 62

written, were made upon petitioner, the last written demand having been received by petitioner on August 7, 1992, but said demands went unheeded; thus, private respondents prayed that judgment be rendered ordering petitioner and all persons holding title under him to vacate the subject premises and deliver possession thereof to private respondents; pay private respondents the amount of P54,000.00 by way of reasonable compensation for the use and occupancy of the premises, P50,000.00 as moral damages, and P50,000.00 as attorney's fees. In his Answer with Counterclaim, petitioner alleged that he had acquired the land in question through extra-ordinary prescription of thirty years of continuous, public, open and uninterrupted possession; private respondents' title was one of the numerous titles derived from TCT No. 3548 in the name of Eustacio Morales and Vicente Villar doing business under the style of Vilma Malolos Subdivision, which was in turn derived from TCT No. 33531 which came from TCT No. 26285 and derived from (OCT) No. 614; and OCT No. 614 had been declared null and void by the RTC, Quezon City (Branch 83). 2 After trial on the merits, the RTC rendered its Decision dated August 9, 1995, the dispositive portion of which reads as follows: WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiffs [herein private respondents], whereby defendant [herein petitioner] is ordered to: (a)Vacate the premises concerned and to deliver and surrender the possession of the same to the plaintiff; ATHCac (b)To pay plaintiffs the sum of P54,000.00 as reasonable compensation for the use and occupancy of the premises subject matter of the aboveentitled case; (c)Pay the plaintiffs the sum P30,000.00 as moral damages; (d)Pay the plaintiffs the sum of P20,000.00 as attorney's fees and to pay the cost of the suit. 3 Herein petitioner Dionisio Caraan then appealed the RTC judgment to the CA. On October 29, 1999, the CA promulgated its Decision ruling thus: . . . Absent any countervailing factum probandum adduced by the defendantappellant [herein petitioner], the indefeasibility of the Torrens title under their [herein private respondents'] names buttresses the presumption ad homini that they have a better right of ownership over the land. . . . The defendant-appellant [herein petitioner] cannot seek refuge on his contention that he is a holder of a residential permit allegedly issued by the Bureau of Forest Development. Within the aegis of Section 3 (ff) of Presidential Decree No. 705, otherwise known as the Revised Forestry Code, a "[p]ermit is a short-term privilege or authority granted by the State to a person to utilize any limited forest resources or undertake a limited activity within any forest land without any right to occupation and possession therein." . . . xxx xxx xxx 6

Neither is the defendant-appellant a possessor in the concept of an owner, which fact is a conditio sine qua non in order to be entitled to ownership through acquisitive prescription. . . . mere possession with a juridical title, e.g., as a usufructuary, a trustee, a lessee, an agent or a pledgee, not being in the concept of owner, cannot ripen into ownership by acquisitive prescription, unless the juridical relation is first expressly repudiated and such repudiation has been communicated to the other party. 4 . . . The appellate court then affirmed the RTC judgment ordering petitioner Dionisio Caraan to vacate subject premises and to deliver and surrender possession thereof to herein private respondents. The CA, however, deleted the sums for compensatory and moral damages and attorney's fees awarded by the RTC in favor of private respondents. No motion for reconsideration of the CA Decision was filed. In the meantime, petitioner Dionisio Caraan died and his surviving heirs filed with this Court a petition for review on certiorari with motion that said heirs be substituted as petitioners in this case. Petitioners insist that private respondents' TCT No. 214949 is a derivative of OCT No. 614 and TCT No. 3548 which had been declared spurious and null and void; Dionisio Caraan has a better right of possession because he had been in open, public, adverse, continuous, and uninterrupted possession in the concept of owner of subject land for more than thirty years; and the subject land is part of a large tract of public land not yet classified for alienation to private ownership. On the other hand, private respondents argue that a certificate of title cannot be collaterally attacked, thus, TCT No. 214949 is valid and existing and conclusive evidence of ownership unless it becomes subject of a direct attack through a proceeding for cancellation of title. The Court finds the present petition bereft of merit. SDHAcI In Eduarte vs. Court of Appeals, 5 the Court reiterated the hornbook principle that "a certificate of title serves as evidence of an indefeasible title to the property in favor of the person whose name appears therein." 6 Private respondents having presented TCT No. RT-71061, which is the reconstituted title of TCT No. 214949, they have thus proven their allegation of ownership over the subject property. The burden of proof then shifted to petitioners who must establish by preponderance of evidence their allegation that they have a better right over the subject property. Petitioners attack the validity of private respondents' certificate of title, alleging that TCT No. 214949 is spurious as it was derived from OCT No. 614 which had allegedly been declared null and void pursuant to the Partial Decision on Defaulted Private Respondents dated March 21, 1988 issued in Civil Case No. Q-35672, entitled Teofilo M. Gariando, et al. vs. Gregorio Dizon, et al. Petitioners further point out that the subject land could not have been titled in favor of private respondents as said land is within the unclassified public forest land of Quezon City and not subject to disposition under the Public Land Law, per Certification dated April 16, 1985 issued by the Bureau of Forest Development. Petitioners further argue that they have a better right to subject property, as they had been in possession thereof in open, public, adverse, continuous, and uninterrupted possession in the concept of owner of subject land for more than thirty years. It should be borne in mind, however, that Section 48, Presidential Decree No. 1529 (P.D. No. 1529), provides that "a certificate of title shall not be subject to collateral attack. It cannot be altered, modified, or cancelled except in a direct proceeding in accordance with law." Petitioners' defense takes the form of a collateral attack on private respondents'

certificate of title. In Mallilin, Jr. vs. Castillo, 7 the Court defined a collateral attack on the title in this wise: . . . When is an action an attack on a title? It is when the object of the action or proceeding is to nullify the title, and thus challenge the judgment pursuant to which the title was decreed. The attack is direct when the object of an action or proceeding is to annul or set aside such judgment, or enjoin its enforcement. On the other hand, the attack is indirect or collateral when, in an action to obtain a different relief, an attack on the judgment is nevertheless made as an incident thereof. 8 In the present case, the attack on the title is definitely merely collateral as the relief being sought by private respondents in their action was recovery of possession. The attack on the validity of private respondents' certificate of title was merely raised as a defense in petitioners' Answer filed with the trial court. In Ybaez vs. Intermediate Appellate Court, 9 the Court categorically ruled that: It was erroneous for petitioners to question the Torrens Original Certificate of Title issued to private respondent over Lot No. 986 in Civil Case No. 671, an ordinary civil action for recovery of possession filed by the registered owner of the said lot, by invoking as affirmative defense in their answer the Order of the Bureau of Lands, dated July 19, 1978, issued pursuant to the investigatory power of the Director of Lands under Section 91 of Public Land Law (C.A. 141 as amended). Such a defense partakes of the nature of a collateral attack against a certificate of title brought under the operation of the Torrens system of registration pursuant to Section 122 of the Land Registration Act, now Section 103 of P.D. 1259. The case law on the matter does not allow collateral attack on the Torrens certificate of title on the ground of actual fraud. The rule now finds expression in section 48 of P.D. 1529 otherwise known as the Property Registration Decree. 10 (Emphasis supplied)

which, Your Honor, is to show that the property subject matter of this case is registered in the name of the herein plaintiff spouses Salcedo R. Cosme and Nora Linda S. Cosme. And in that regard, Your Honor, may we invite Counsel to stipulate that this is a Xerox copy and that we request to be marked as Exhibit A is a faithful reproduction of the original. If Counsel will stipulate, this will be the one to be submitted in evidence. Atty. Moya: This is a faithful reproduction, Your Honor. (Emphasis supplied) EICScD Furthermore, no objection was raised by counsel for petitioners in their written opposition/comment to private respondents' offer of evidence 12regarding the fact that what was marked and submitted to the court was the photocopy. In Blas vs. Angeles-Hutalla, 13 the Court held thus: The established doctrine is that when a party failed to interpose a timely objection to evidence at the time they were offered in evidence, such objection shall be considered as waived. In Tison v. Court of Appeals, the Supreme Court set out the applicable principle in the following terms: [F]or while the documentary evidence submitted by petitioners do not strictly conform to the rules on their admissibility, we are, however, of the considered opinion that the same may be admitted by reason of private respondent's failure to interpose any timely objection thereto at the time they were being offered in evidence. It is elementary that an objection shall be made at the time when an alleged inadmissible document is offered in evidence, otherwise, the objection shall be treated as waived, since the right to object is merely a privilege which the party may waive. As explained in Abrenica vs. Gonda, et al., it has been repeatedly laid down as a rule of evidence that a protest or objection against the admission of any evidence must be made at the proper time, otherwise, it will be deemed to have been waived. The proper time is when from the question addressed to the witness, or from the answer thereto, or from the presentation of the proof, the inadmissibility of the evidence is, or may be inferred. Thus, a failure to except to the evidence because it does not conform with the statute is a waiver of the provisions of the law. 14 . . . 7

The Court cannot, therefore, resolve the issue of the alleged invalidity of private respondents' certificate of title in the present action for recovery of possession. Even petitioners' claim that subject property could not have been titled in favor of private respondents because the same has not yet been classified for alienation for private ownership, cannot be given consideration because, as clearly stated in Apostol vs. Court of Appeals, "[t]he issue of the validity of the title of respondents can only be assailed in an action expressly instituted for that purpose." 11 Petitioners' asseveration that TCT No. RT-71061 (214949) should not have been admitted into evidence because private respondents merely presented the photocopy thereof is also unmeritorious. Private respondents presented the original of TCT No. RT-71061 (214949) in open court during the hearing held on April 13, 1994. The pertinent portions of the transcript of stenographic notes of said hearing are reproduced hereunder: Atty. Mazo: Your Honor, we are presenting in evidence this Transfer Certificate of Title No. RT-71061 (214949) as Exhibit A. The purpose of

Hence, considering the fact that counsel for petitioners admitted that the photocopy of TCT No. RT-71061 (214949) is a faithful reproduction of the original thereof, stipulated with private respondents' counsel that what will be marked and submitted to the trial court as Exhibit A is the photocopy, and the lack of objection on such ground which is then deemed a waiver thereof, the admission into evidence of the photocopy of TCT No. RT71061 was absolutely correct. Moreover, although the reconstituted title of TCT No. 214949 does show on its face that it was derived from OCT No. 614, 15 both the trial and appellate courts are correct in saying that petitioners' assertion that OCT No. 614 had been declared null and void is misleading. The RTC of Quezon City, Branch 83 issued a Partial Decision on Defaulted Private Respondents 16 dated March 21, 1988 in Civil Case No. Q35672 which declared OCT No. 614 and subsequent TCTs issued therefrom, "with the exception of those titles belonging to the non-defaulted respondents," 17 null and void. However, the defaulted private respondents in Civil Case No. Q-35672 filed a case for annulment of said partial judgment. The CA granted the petition for annulment of partial judgment in Civil Case No. Q-35672. The case was elevated via a petition for review on certiorari assailing the CA decision and on January 19, 2001, this Court promulgated a Decision in Pinlac vs. Court of Appeals, 18 docketed as G.R. No. 91486, affirming the CA Decision setting aside and annulling said partial decision on the ground of the trial court's lack of jurisdiction over the persons of respondents in said case. Petitioners have not been able to present any proof that, indeed, OCT No. 614 had been declared null and void by final judgment. Hence, petitioners' claim that private respondents' certificate of title is spurious deserves no consideration whatsoever. Private respondents' certificate of title must be deemed valid and existing, as it cannot be assailed through a collateral attack in the present action. HTCISE Consequently, petitioners' defense that they have a better right over the subject land because they had been in open, public, adverse, continuous, and uninterrupted possession in the concept of owner for more than 30 years must be struck down. Section 47 of P.D. No. 1529 provides that "[n]o title to registered land in derogation of the title of the registered owner shall be acquired by prescription or adverse possession." The ruling in Ragudo vs. Fabella Estate Tenants Association, Inc., 19 is exactly in point, to wit: . . . In a long line of cases, we have consistently ruled that lands covered by a title cannot be acquired by prescription or adverse possession. So it is that in Natalia Realty Corporation vs. Vallez, et al., we held that a claim of acquisitive prescription is baseless when the land involved is a registered land because of Article 1126 of the Civil Code in relation to Act 496 (now, Section 47 of Presidential Decree No. 1529): Appellants' claim of acquisitive prescription is likewise baseless. Under Article 1126 of the Civil Code, prescription of ownership of lands registered under the Land Registration Act shall be governed by special laws. Correlatively, Act No. 496 provides that no title to registered land in derogation of that of the registered owner shall be acquired by adverse possession. Consequently, proof of possession by the defendants is both immaterial and inconsequential. (Emphasis supplied) Therefore, as emphasized in the above quoted ruling, petitioners' allegations of uninterrupted possession for 30 years cannot prevail over private respondents' certificate of title, which is the best proof of ownership. As the Court stated 8

in Apostol vs. Court of Appeals, et al., 20 the registered owners are entitled to the possession of the property covered by the said title from the time such title was issued in their favor. Preponderance of evidence being in favor of private respondents, there can be no other conclusion but that private respondents, being the registered owners of subject property, should be placed in possession thereof. WHEREFORE, the petition is DENIED for lack of merit. The Decision of the Court of Appeals dated October 29, 1999 is hereby AFFIRMED. SO ORDERED. ENGR. GABRIEL V. LEYSON, DR. JOSEFINA L. POBLETE, FE LEYSON QUA, CARIDAD V. LEYSON and ESPERANZA V. LEYSON,petitioners, vs. NACIANSINO BONTUYAN and MAURECIA B. BONTUYAN, respondents. Calixto Gabud was the owner of a parcel of land located in Barangay Adlawon, Mabolo, Cebu City, which was declared for taxation purposes under Tax Declaration (T.D.) No. 03276-R in 1945 2 with the following boundaries: NorthCalixto GabudEastMarcelo Cosido SouthPedro BontuyanWestAsuncion Adulfo. 3 Because of the construction of a provincial road, the property was divided into two parcels of land covered by T.D. No. 03276-R and T.D. No. 01979-R. On February 14, 1948, Gabud executed a Deed of Absolute Sale 4 over the property covered by T.D. No. 03276-R, as well as the other lot covered by T.D. No. 01979-R, in favor of Protacio Tabal, married to Leodegaria Bontuyan. On the basis of the said deed, T.D. No. 03276-R was cancelled by T.D. No. 13615-R in the name of Protacio Tabal effective 1949. 5 On January 5, 1959, Tabal executed a Deed of Sale 6 over the property covered by T.D. No. 13615-R in favor of Simeon Noval, married to Vivencia Bontuyan, daughter of Gregorio Bontuyan, for P800.00. T.D. No. 13615-R was cancelled by T.D. No. 100356 in the names of the spouses Noval. 7 Gregorio Bontuyan received a copy of the said tax declaration in behalf of the spouses Noval. 8 The latter tax declaration was then cancelled by T.D. No. 008876 under the same names effective 1967. 9 Subsequently, the property was surveyed by Cadastral Land Surveyor Mauro U. Gabriel on January 22, 1964. The plan survey was approved on September 30, 1966. 10 The property covered by T.D. No. 008876 was identified as Lot No. 17150 of Cebu Cadastre No. 12, while the property covered by T.D. No. 01979-R was identified as Lot No. 13272. On May 22, 1968, the spouses Noval executed a Deed of Absolute Sale 11 over the two lots covered by T.D. No. 008876 in favor of Lourdes V. Leyson for P4,000.00. Lourdes Leyson took possession of the property and had it fenced. Despite the said sale, T.D. No. 008876 was cancelled by T.D. No. 21267 effective 1974. 12 Thereafter, T.D. No. 21267 was cancelled by T.D. No. 23821 13 which, in turn, was cancelled by T.D. No. 01-17455 effective 1980. 14 In 1989, the latter was cancelled by a new tax declaration, T.D. No. 01-00100646. All these tax declarations were in the names of the spouses Noval. 15 Meanwhile, Lourdes Leyson paid for the realty taxes over the property. However, the tax declaration issued thereon continued to be under the names of the spouses Noval. 16 Despite his knowledge that the property had been purchased by his son-in-law and daughter, the spouses Noval, Gregorio Bontuyan, who was then 91 years old, filed an application with the Bureau of Lands for a free patent over Lot No. 17150 on December 4, 1968. He alleged therein that the property was public land and was neither claimed nor occupied by any person, 17 and that he first entered upon and began cultivating the same in 1918. Thus, on November 19, 1971, Free Patent No. 510463 was issued over Lot No. 17150 in his favor, on the basis of which Original Certificate of Title (OCT) No. 0-1619 was issued to and under his name on March 21, 1974. 18 Another parcel of land, Lot No. 13272, was also

registered under the name of Gregorio Bontuyan under OCT No. 0-1618. He then declared Lot No. 17150 for taxation purposes under T.D. No. 13596 effective 1974. 19 On February 20, 1976, Gregorio Bontuyan executed a Deed of Absolute Sale 20 over Lot No. 17150 in favor of his son, Naciansino Bontuyan. jur2005cd On April 28, 1980, Gregorio Bontuyan, then 103 years old, executed another Deed of Absolute Sale 21 over Lot Nos. 13272 and 17150, covered by OCT No. 0-1618 and OCT No. 0-1619, respectively, in favor of Naciansino Bontuyan for P3,000.00. On the basis of the said deed, OCT No. 0-1619 was cancelled by TCT No. 1392 in the name of Naciansino Bontuyan on December 2, 1980. 22 Gregorio Bontuyan died intestate on April 12, 1981. 23 On March 30, 1981, the spouses Bontuyan executed a Real Estate Mortgage over Lot No. 17150 covered by OCT No. 01619 in favor of the Development Bank of the Philippines (DBP) as security for a loan of P11,200.00. 24 Naciansino Bontuyan had earlier executed an affidavit that the property was not tenanted. Shortly thereafter, the spouses Bontuyan left the Philippines and resided in the United States. Meanwhile, Lourdes Leyson died intestate. The spouses Bontuyan returned to the Philippines in 1988 to redeem the property from DBP only to discover that there were tenants living on the property installed by Engineer Gabriel Leyson, one of the late Lourdes Leyson's children. Despite being informed that the said spouses owned the property, the tenants refused to vacate the same. The tenants also refused to deliver to the spouses the produce from the property. The spouses Bontuyan redeemed the property from DBP on September 22, 1989. DHSACT On February 12, 1993, Jose Bontuyan, Nieves Atilano, Pacifico Bontuyan, Vivencia Noval and Naciansino Bontuyan, the surviving heirs of Gregorio Bontuyan, executed an Extrajudicial Settlement 25 of the latter's estate and adjudicated Lot No. 13272 in favor of Naciansino. Based on the said deed, T.D. No. 01-001-00877 was issued to and under the name of Naciansino over the said property starting 1994. On June 24, 1993, Naciansino Bontuyan, through counsel, wrote Engr. Gabriel Leyson, demanding that he be furnished with all the documents evidencing his ownership over the two lots, Lots Nos. 17150 and 13272. 26 Engr. Leyson ignored the letter. EIcSTD The spouses Bontuyan, thereafter, filed a complaint against Engr. Leyson in the Regional Trial Court (RTC) of Cebu City for quieting of title and damages. They alleged that they were the lawful owners of the two lots and when they discovered, upon their return from the United States, that the property was occupied and cultivated by the tenants of Engr. Leyson, they demanded the production of documents evidencing the latter's ownership of the property, which was ignored. The spouses Bontuyan prayed that, after due proceedings, judgment be rendered in their favor, thus: WHEREFORE, premises considered, it is most respectfully prayed of this Honorable Court to render judgment against the defendant and in favor of the plaintiffs, to wit: (a)Confirming the ownership of the plaintiffs on the lots in question; SEHDIC (b)Ordering defendant to pay the plaintiffs the amount of Twenty Thousand Pesos (P20,000.00) as the share of the plaintiffs of the produce of the lots in question; (c)Ordering defendant to pay plaintiffs the sum of P50,000.00 as reimbursement of attorney's fees and the further sum of 9

P500.00 as appearance fee every time the case is called for trial; (d)Ordering the defendant to pay plaintiffs the sum of P50,000.00 as moral damages and exemplary damages may be fixed by the court; (e)Ordering defendant to pay plaintiffs the sum of P5,000.00 as actual expenses for the preparation and filing of the complaint; (f)Ordering defendant to pay the costs; and SDHAEC (g)Granting to plaintiffs such other reliefs and remedies just and equitable in the premises. 27 In his answer to the complaint, Engr. Leyson averred, by way of affirmative defenses, that the two lots were but portions of a parcel of land owned by Calixto Gabud, covered by T.D. No. 03276-R, and was subdivided into two parcels of land because of the construction of a provincial road on the property; Gabud later sold the two lots to Protacio Tabal, who sold the same to Simeon Noval, married to Vivencia Bontuyan, one of the children of Gregorio Bontuyan; Simeon Noval later sold the property to Lourdes Leyson on May 22, 1968 who, forthwith, took possession thereof as owner; and Gregorio Bontuyan was issued a free patent over the property through fraud. Engr. Leyson concluded that the said patent, as well as OCT No. 0-1619 and TCT No. 1392, were null and void and that the plaintiffs acquired no title over the property. Engr. Leyson interposed a counterclaim against the spouses Bontuyan and repleaded as an integral part thereof all the material allegations in his affirmative defense. He prayed that, after due proceedings, judgment be rendered in his favor, thus: AcSHCD a)Dismissing Plaintiffs' complaint for failure to include indispensable parties; b)Declaring the Defendant and his four (4) sisters, namely, Dr. Josefina L. Poblete, Mrs. Fe L. Qua, Esperanza Leyson and Caridad Leyson as the true and legal owners and possessors of the parcels of land in issue; c)Declaring OCT No. 0-1619 in the name of Gregorio Bontuyan and TCT No. 1392 in the name of Naciansino Bontuyan null and void and to order the Register of Deeds to cancel the same and issue new ones in favor of the Defendant Gabriel V. Leyson and his four (4) sisters, namely: Dr. Josefina L. Poblete, Mrs. Fe L. Qua, Esperanza V. Leyson and Caridad V. Leyson; d)And on the Counterclaim, to order Plaintiffs to pay the Defendant the following sums: d-1)P50,000.00 as attorney's fees and appearance fee of P1,000.00 per hearing; d-2)P500,000.00 as moral damages; d-3)P20,000.00 as exemplary damages; d-4)P10,000.00 as expenses of litigation. Defendant further prays for such other reliefs just and equitable in the premises. 28

In due course, the other children of Lourdes Leyson, namely, Dr. Josefina L. Poblete, Fe Leyson Qua, Caridad V. Leyson and Esperanza V. Leyson, were allowed to intervene as defendants. They filed their answer-in-intervention wherein they adopted, in their counterclaim, paragraphs 7 to 26 of the answer of their brother, Engr. Leyson, the original defendant. They prayed that, after due hearing, judgment be rendered in their favor as follows:

1392 in the name of Naciansino Bontuyan null and void; ordering the Register of Deeds to cancel OCT No. 0-1619 and TCT No. 1392 and issue new ones in favor of defendant Gabriel Leyson and intervenors Josefina Poblete, Fe Qua, Esperanza Leyson and Caridad Leyson; ordering plaintiff to pay defendant and intervenors the following: a)P50,000.00attorney's fees;

Wherefore, this Honorable Court is prayed to render judgment in favor of the Defendant and the Defendants-inIntervention and against the Plaintiffs as follows: AIDSTE a)Promissory Plaintiffs' complaint for failure to include indispensable parties and for lack of cause of action; b)Declaring the Defendant and his four (4) sisters, namely: Dr. Josefina L. Poblete; Mrs. Fe L. Qua, Esperanza Leyson and Caridad Leyson as the true and legal owners and possessors of the parcels of land in issue; c)Declaring OCT No. 0-1619 in the name of Gregorio Bontuyan and TCT No. 1392 in the name of Naciansino Bontuyan null and void and to order the Register of Deeds to cancel the same and issue new ones in favor of the Defendant Gabriel V. Leyson and his four (4) sisters, namely: Dr. Josefina L. Poblete, Mrs. Fe L. Qua, Esperanza V. Leyson and Caridad V. Leyson; d)On the Counterclaim, Plaintiffs should pay the Defendants the following sums: AIaHES d-1)P50,000.00 as attorney's fees and appearance fee of P1,000.00 per hearing; d-2)P500,000.00 as moral damages to each Intervenor; d-3)P50,000.00 as exemplary damages; d-4)P15,000.00 as expenses of litigation. Defendant further prays for such other reliefs just and equitable in the premises. 29 TcEDHa In their reply, the spouses Bontuyan averred that the counterclaim of the defendants for the nullity of TCT No. 1392 and the reconveyance of the property was barred by laches and prescription. On January 21, 1999, the trial court rendered judgment in favor of the Leyson heirs and against the spouses Bontuyan. The fallo of the decision reads: WHEREFORE, foregoing considered judgment is hereby rendered dismissing plaintiff's complaint for dearth of evidence declaring the defendant and the intervenors as the true and legal owners and possessors of the subject parcels of land; declaring OCT No. 0-1619 in the name of Gregorio Bontuyan and TCT No. 10

b)1,000.00per appearance; c)100,000.00moral damages for defendant and intervenors; d)10,000.00exemplary damages;

and

e)10,000.00litigation expenses. SO ORDERED. 30 cTECHI The trial court held that Simeon Noval had sold the lots to Lourdes Leyson on May 22, 1968, who thus acquired title over the property. The spouses Bontuyan appealed the decision to the CA which affirmed, with modification, the decision of the RTC. The appellate court held that the Leyson heirs were the owners of Lot No. 13273, while the spouses Bontuyan were the owners of Lot No. 17150. The CA ruled that the answer of the Leyson heirs to the complaint constituted a collateral attack of OCT No. 0-1619 which was proscribed by law. The Leyson heirs filed a motion for reconsideration of the decision insofar as Lot No. 17150 was concerned, contending that their counterclaim for the nullification of OCT No. 0-1619 contained in their answer constituted a direct attack on the said title. The CA denied the motion. The Leyson heirs then filed a petition for review with this Court and made the following assignments of error: First Assignment of Error THE HONORABLE COURT OF APPEALS COMMITTED ERROR WHEN IT RULED THAT THE NULLITY OR THE VALIDITY OF OCT NO. 0-1619 CANNOT BE RULED UPON IN THESE PROCEEDINGS BROUGHT BY THE RESPONDENTS FOR THE QUIETING OF THEIR TITLE. Second Assignment of Error THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT RULED THAT PETITIONERS' ANSWER WITH COUNTERCLAIM, PRAYING FOR THE CANCELLATION OF PLAINTIFFS' TORRENS CERTIFICATE IS A MERE COLLATERAL ATTACK ON THE TITLE. 31 TADaCH Third Assignment of Error THE APPELLATE COURT GRAVELY ERRED WHEN IT MODIFIED THE DECISION OF THE REGIONAL TRIAL COURT DATED JANUARY 21, 1999 BY RULING THAT PETITIONERS ARE DECLARED THE OWNERS OF LOT 13273 BUT RESPONDENTS ARE DECLARED THE OWNERS OF LOT 17150 UNDER OCT NO. 0-1619 AND PRESENTLY COVERED BY TCT NO. 1392 IN THE NAME OF NACIANSINO BONTUYAN, DESPITE THE APPELLATE COURT'S AFFIRMING THE FINDINGS OF THE TRIAL COURT THAT

FRAUD WAS COMMITTED BY GREGORIO BONTUYAN (RESPONDENTS' PREDECESSOR-IN-INTEREST) IN ACQUIRING TITLE OVER THE SUBJECT PROPERTIES. 32 Fourth Assignment of Error THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT RULED THAT RECONVEYANCE OF TITLE OF LOT 17150 COVERED BY OCT NO. 0-1619 AND PRESENTLY COVERED BY TCT NO. 1392, IN FAVOR OF PETITIONERS HAD PRESCRIBED. 33 aIHSEc Fifth Assignment of Error THE APPELLATE COURT GRAVELY ERRED IN NOT GRANTING ATTORNEY'S FEES AND APPEARANCE FEES DESPITE RESPONDENTS' FRAUD IN ACQUIRING TITLE OVER THE SUBJECT PROPERTIES. 34 On the first two assignments of errors, the petitioners aver that the counterclaim in their answer to the complaint constituted a direct attack of the validity of OCT No. 0-1619. They maintain that the appellate court's reliance on the ruling of this Court in Cimafrancia v. Intermediate Appellate Court 35was misplaced. They assert that what is controlling is the ruling in Pro Line Sports Center, Inc. v. Court of Appeals 36 wherein this Court held that the counterclaim of the petitioners therein constituted a direct attack on a certificate of title. The petitioners, likewise, cited Section 55 of Act No. 496, as amended, to buttress their stance. They plead that their answer to the complaint should be liberally construed so as to afford them substantial justice. On the other hand, the respondents assert that the decision of the CA is correct. They claim that Lot No. 17150 was still public land when Lourdes Leyson purchased the same from Simeon Noval, and that the property became private land only when Free Patent No. 510463 was issued to and under the name of Gregorio Bontuyan. HCDaAS We agree with the contention of the petitioners that the CA erred in not nullifying OCT No. 0-1619 and TCT No. 1392 and ordering the respondents to reconvey the property covered by the said title to the petitioners. The respondents, as plaintiffs in the court a quo, were burdened to prove their claim in their complaint that Gregorio Bontuyan was the owner of Lot No. 17150 and that they acquired the property in good faith and for valuable consideration from him. 37 However, the respondents failed to discharge this burden. The evidence on record shows that Calixto Gabud sold the property to Protacio Tabal on February 14, 1948, 38 and that the latter sold the property to Simeon Noval on January 5, 1959. 39 Simeon Noval then sold the property to Lourdes Leyson on May 22, 1968. 40 The respondents failed to adduce any evidence to prove that Lourdes Leyson, or even Simeon Noval, sold the property to Gregorio Bontuyan, or to any of the respondents for that matter. Since Gregorio Bontuyan was not the owner of the property, he could not have sold the same to his son Naciansino Bontuyan and the latter's wife, the respondents herein. As the Latin adage goes: NEMO DAT QUOD NON HABET. Gregorio Bontuyan could not feign ignorance of Simeon Noval's ownership of the property, considering that the latter was his son-in-law, and that he (Gregorio Bontuyan) was the one who received the owner's copy of T.D. No. 100356 covering the property under the name of Simeon Noval. 41 At the dorsal portion of the said tax declaration, there was even an annotation that the property was transferred to Simeon Noval as shown by the deed of sale executed before Notary Public Gregorio A. Uriarte who notarized the deed of sale over the property executed by Protacio Tabal in favor of Simeon Noval on January 5, 1959. 42 We note that the respondents failed to adduce in evidence any receipts of real property tax payments made on the property under their names, which would have fortified 11

their claim that they were the owners of the property. We agree with the findings of the CA, thus: This case involves two parcels of land Lot 17150 and Lot 13273. Lot 17150 is registered under the Torrens System under the names of plaintiffs-appellants, while Lot 13273 remained to be unregistered. DSITEH In this case, records show that defendant-appellee and intervenorsappellees are the true owners of the subject lots. They have in their favor tax receipts covering the subject lots issued since 1945. While, indeed, tax receipts and declarations are not incontrovertible evidence of ownership, such, however, if accompanied with open, adverse, continuous possession in the concept of an owner, as in this case, constitute evidence of great weight that person under whose name the real taxes were declared has a claim of right over the land. Further, defendant-appellee and intervenors-appellees presented before the trial court the Deed of Absolute Sale dated February 14, 1948, executed by Calixto Gabud, conveying the subject lots in favor of Protacio Tabal. The deed is a notarial document. Likewise presented is the Deed of Absolute Sale of the subject lots dated January 5, 1959, executed by Protacio Tabal in favor of spouses Simeon Noval and Vivencia Bontuyan. The document is, likewise, a notarial document. aAcDSC Defendant-appellee and intervenorsappellees also presented the Deed of Absolute Sale of the subject lots dated May 22, 1968, executed by spouses Simeon Noval and Vivencia Bontuyan in favor of Lourdes Leyson. The deed is a notarial document. A notarial document is evidence of the facts in clear, unequivocal manner therein expressed. It has in its favor the presumption of regularity. It is admissible in evidence without necessity of preliminary proof as to its authenticity and due execution. CAScIH There exist (sic) no trace of irregularity in the transfers of ownership from the original owner, Calixto Gabud, to defendant-appellee and intervenorsappellees.

Plaintiffs-appellants, on the other hand, offered no convincing evidence as to how their predecessor-in-interest, Gregorio Bontuyan, acquired the subject lots. Plaintiffs-appellants presented only the Free Patent and OCT No. 0-1619, covering Lot No. 17150, issued in the name of Gregorio Bontuyan. cdasia As to Lot No. 13273, We find no sufficient reason why defendant-appellee and intervenors-appellees should be disturbed in their ownership and possession of the same. 43

As copiously shown by the record, Gregorio Bontuyan filed his application for a free patent with the Bureau of Lands on December 4, 1968 in gross bad faith, thereby defrauding Lourdes Leyson of the said property through deceit. Gregorio Bontuyan falsely declared in the said application: (a) that he entered upon and cultivated the property since 1918 and that the property was not claimed or occupied by any person; and (b) that Lot No. 17150 was located in Sirao, Cebu City, when, in fact, the property was located in Adlawon, Cebu City. Lourdes Leyson was not notified of the said application and failed to file any opposition thereto. Gregorio Bontuyan was then able to secure Free Patent No. 510463 on November 19, 1971 and OCT No. 0-1619 on March 21, 1974. It appears in the said title that the property's location was indicated as "Sirao, Cebu City." 44 Indeed, the CA declared that Gregorio Bontuyan had acquired title to the property through fraud: However, as to Lot No. 17150, We find that despite the fraud committed by Gregorio Bontuyan (plaintiffs-appellants' predecessor-in-interest) in acquiring his title over the said lot, ownership over the said lot should be adjudged in favor of plaintiffs-appellants. Records, indeed, show that, at the time when Gregorio Bontuyan applied for Free Patent, Gregorio Bontuyan was living with his daughter, Vivencia Bontuyan (defendant-appellee's predecessor-ininterest). Thus, Gregorio Bontuyan must have known that at the time when he applied for free patent on December 1968, the subject lots were already sold on May 1968 by his daughter Vivencia Bontuyan in favor of Lourdes Leyson, predecessor-in-interest of defendantsappellees. DAHEaT Moreover, records further show that Gregorio Bontuyan sold twice Lot [No.] 17150 to plaintiffs-appellants. The first was in 1976 and the other was in 1980. Plaintiffs-appellants offered no reasonable explanation why Gregorio Bontuyan have (sic) to sell twice Lot No. 17150 in favor of plaintiffs-appellants. As found by the trial court, these are badges of bad faith which affect the validity of the title of Gregorio Bontuyan over the subject lots. ICHcTD We are aware that the torrens system does not create or vest title. It only confirms and records title already existing and vested. It does not protect a usurper from the true owner. It cannot be a shield for the commission of fraud. It does not permit one to enrich himself at the expense of another. Where one does not have any rightful claim over a real property, the torrens system of registration can confirm or record nothing. 45 The findings of the CA affirmed the findings of the trial court in its decision, thus: After having thoroughly analyzed the records and the evidences adduced during the trial of this case, this Court is convinced and sincerely believes that the lots in question were originally owned by Calixto Gabud as evidenced by T.D. [No.] 03276R marked as Exh. "1." In 1945, this consisted of only one lot in Adlawon, Cebu City, as there was no provincial road yet. However in 1948, the said parcel of land was divided into two because a provincial road was constructed passing through it. Hence, T.D. [No.] 03276R and T.D. [No.] 01979-R were issued to Calixto 12

Gabud. On February 16, 1948, Calixto Gabud sold the said parcels of land to spouses Protacio Tabal and Ludegaria (sic) Bontuyan as evidenced by an Absolute Deed of Sale, Exh. "2." On January 5, 1959, spouses Protacio Tabal and Ludegaria (sic) Bontuyan, in turn, sold the same parcels of land to spouses Simeon Noval and Vivencia Bontuyan as evidenced by a Deed of Sale, Exh. "4." It is noteworthy to mention at this point in time that Vivencia Bontuyan is one of the daughters of Gregorio Bontuyan, the father of herein plaintiff Naciansino Bontuyan. In May 1968, spouses Simeon Noval and Vivencia Bontuyan sold the subject parcels of land to Lourdes vs. (sic) Leyson, the mother of herein defendant as evidenced by a Deed of Sale marked as Exh. "6." It is quite perplexing for the court to imagine that Gregorio Bontuyan, father of herein plaintiff, who was then residing with spouses Simeon Noval and Vivencia Bontuyan at 179 C San Jose dela Montaa, Mabolo, Cebu City, as reflected in his application for Free Patent (Exhs. "8" & "26") dated December 4, 1968 was unaware of the sale of the subject parcels of land made by his daughter Vivencia Bontuyan and spouse Simeon Noval to Lourdes Leyson. It is evident that, after the sale from spouses Noval to Lourdes Leyson in May 1968, Gregorio Bontuyan applied for Free Patent for the same parcels of land in December 1968 claiming to have cultivated the land since 1918, stating therein the location as Sirao and not Adlawon which is the true and correct location. Sirao and Adlawon are two different barangays which are not even adjacent to each other. In fact, as borne out by Exh. "25," it is separated by Barangay Guba. In 1974, Free Patent No. 510463 and OCT# 0-1619 was issued to Gregorio Bontuyan covering subject property, the location of which is in Barangay Sirao in consonance to his application. Gregorio Bontuyan's application for Free Patent over subject parcels of land had raised in the mind of this Court reasonable badges of bad faith on his part as the subject parcels of land were already sold by his daughter Vivencia Bontuyan and spouse Simeon Noval to Lourdes Leyson. Another badge of bad faith is raised in the mind of this Court when he (Gregorio) sold the subject parcels of land twice to his son Naciansino Bontuyan in 1976 and 1980, respectively, wherein both Deeds of Sale were notarized by different Notary Publics, (Exhs. "10" & "16"). 46 Considering that Lourdes Leyson was in actual possession of the property, the respondents cannot, likewise, claim that they were in good faith when Gregorio Bontuyan allegedly sold the property to them on April 28, 1980. HAICTD Anent the third and fourth assignments of error, we do not agree with the ruling of the CA that the petitioners failed to directly attack the validity of OCT No. 0-1619. The CA failed to consider the fact that, in their respective answers to the complaint, the petitioners inserted therein a counterclaim wherein they repleaded all the material allegations in their affirmative defenses, that Gregorio Bontuyan secured OCT No. 0-1619 through fraud and deceit and prayed for the nullification thereof. While Section 47 of Act No. 496 provides that a certificate of title shall not be subject to collateral attack, the rule is that an action is an attack on a title if its object is to nullify the same, and thus challenge the proceeding pursuant to which the title was decreed. The attack is considered direct when the object of an action is to annul or set aside such

proceeding, or enjoin its enforcement. On the other hand, an attack is indirect or collateral when, in an action to obtain a different relief, an attack on the proceeding is nevertheless made as an incident thereof. 47 Such action to attack a certificate of title may be an original action or a counterclaim in which a certificate of title is assailed as void. A counterclaim is considered a new suit in which the defendant is the plaintiff and the plaintiff in the complaint becomes the defendant. It stands on the same footing and is to be tested by the same rules as if it were an independent action. 48 Furthermore, since all the essential facts of the case for the determination of the title's validity are now before the Court, to require the party to institute cancellation proceedings would be pointlessly circuitous and against the best interest of justice. 49 TAacIE The CA, likewise, erred in holding that the action of the petitioners to assail OCT No. 0-1619 and TCT No. 1392 and for the reconveyance of the property covered by the said title had already prescribed when they filed their answer to the complaint. Case law has it that an action for reconveyance prescribes in ten years, the point of reference being the date of registration of the deed or the date of issuance of the certificate of title over the property. In an action for reconveyance, the decree of registration is highly regarded as incontrovertible. What is sought instead is the transfer of the property or its title, which has been wrongfully or erroneously registered in another person's name, to its rightful or legal owner, or to one who has a better right. 50 SAcCIH However, in a series of cases, this Court declared that an action for reconveyance based on fraud is imprescriptible where the plaintiff is in possession of the property subject of the acts. In Vda. de Cabrera v. Court of Appeals, 51 the Court held: . . . [A]n action for reconveyance of a parcel of land based on implied or constructive trust prescribes in ten years, the point of reference being the date of registration of the deed or the date of the issuance of the certificate of title over the property, but this rule applies only when the plaintiff or the person enforcing the trust is not in possession of the property, since if a person claiming to be the owner thereof is in actual possession of the property, as the defendants are in the instant case, the right to seek reconveyance, which in effect seeks to quiet title to the property, does not prescribe. The reason for this is that one who is in actual possession of a piece of land claiming to be the owner thereof may wait until his possession is disturbed or his title is attacked before taking steps to vindicate his right, the reason for the rule being, that his undisturbed possession gives him a continuing right to seek the aid of a court of equity to ascertain and determine the nature of the adverse claim of a third party and its effect on his own title, which right can be claimed only by one who is in possession. aCSHDI

of a third party and its effect on his own title, which right can be claimed only by one who is in possession. No better situation can be conceived at the moment for Us to apply this rule on equity than that of herein petitioners whose . . . possession of the litigated property for no less than 30 years and was suddenly confronted with a claim that the land she had been occupying and cultivating all these years, was titled in the name of a third person. We hold that in such a situation the right to quiet title to the property, to seek its reconveyance and annul any certificate of title covering it, accrued only from the time the one in possession was made aware of a claim adverse to his own, and it is only then that the statutory period of prescription commences to run against such possessor. The paramount reason for this exception is based on the theory that registration proceedings could not be used as a shield for fraud. 53 Moreover, to hold otherwise would be to put premium on land-grabbing and transgressing the broader principle in human relations that no person shall unjustly enrich himself at the expense of another. 54 HCaEAT In the present case, Lourdes Leyson and, after her death, the petitioners, had been in actual possession of the property. The petitioners were still in possession of the property when they filed their answers to the complaint which contained their counterclaims for the nullification of OCT No. 0-1619 and TCT No. 1392, and for the consequent reconveyance of the property to them. The reconveyance is just and proper in order to put a stop to the unendurable anomaly that the patentees should have a Torrens title for the land which they and their predecessors never possessed and which has been possessed by another in the concept of an owner. 55 AaITCH On the fifth assignment of error, we rule for the petitioners. The award of attorney's and appearance fees is better left to the sound discretion of the trial court, and if such discretion is well exercised, as in this case, it will not be disturbed on appeal. 56 With the trial and the appellate courts' findings that the respondents were in bad faith, there is sufficient basis to award attorney's and appearance fees to the petitioners. Had it not been for the filing of a baseless suit by the respondents against the petitioners, the latter would not have sought the services of counsel to defend their interests and represent them in this case. IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The Decision of the Court of Appeals declaring the respondents the owners of Lot No. 17150 covered by OCT No. 0-1619 and TCT No. 1392; and setting aside the award of attorney's fees in favor of the petitioners by the Regional Trial Court are REVERSED AND SET ASIDE. The Court hereby AFFIRMS the ownership of the petitioners of Lot No. 17150. OCT No. 0-1619 and TCT No. 1392 covering the said lot are hereby nullified. The Register of Deeds is ORDERED to cancel TCT No. 1392 and to issue another title over the property in favor of the petitioners as co-owners thereof. The trial court's award of P50,000.00 for attorney's fees to the petitioners is AFFIRMED. No pronouncement as to costs. SO ORDERED. IaHDcT

Similarly, in the case of David v. Malay, 52 the same pronouncement was reiterated by the Court: . . . There is settled jurisprudence that one who is in actual possession of a piece of land claiming to be owner thereof may wait until his possession is disturbed or his title is attacked before taking steps to vindicate his right, the reason for the rule being, that his undisturbed possession gives him a continuing right to seek the aid of the court of equity to ascertain and determine the nature of the adverse claim 13