DBP To Melencion and MWSS

DBP vs Register of Deeds
Facts
On June 13, 1980, the Development Bank of the Philippines (hereafter, DBP) presented for registration to the
Register of Deeds of Nueva Ecija, Cabanatuan City, a sheriff's certificate of sale in its favor of two parcels of land
covered by Transfer Certificates of Title Nos. NT-149033 and NT-149034, both in the names of the spouses Andres
Bautista and Marcelina Calison, which said institution had acquired as the highest bidder at an extrajudicial
foreclosure sale. The transaction was entered as Entry No. 8191 in the Registry's Primary Entry Book and DBP paid
the requisite registration fees on the same day. Annotation of the sale on the covering certificates of title could
not, however be effected because the originals of those certificates were found to be missing from the files of
the Registry, where they were supposed to be kept, and could not be located. On the advice of the Register of
Deeds, DBP instituted proceedings in the Court of First Instance of Nueva Ecija to reconstitute said certificates,
and reconstitution was ordered by that court in a decision rendered on June 15, 1982. For reasons not apparent
on the record, the certificates of title were reconstituted only on June 19,1984.
On June 25, 1984, DBP sought annotation on the reconstituted titles of the certificate of sale subject of Entry
No. 8191 on the basis of that same four-year-old entry. The Acting Register of Deeds, being in doubt of the proper
action to take on the solicitation, took the matter to the Commissioner of Land Registration by consulta raising two
questions: (a) whether the certificate of sale could be registered using the old Entry No. 8191 made in 1980
notwithstanding the fact that the original copies of the reconstituted certificates of title were issued only on
June 19, 1984; and (b) if the first query was answered affirmatively, whether he could sign the proposed
annotation, having assumed his duties only in July 1982.
The resolution on the consulta held that Entry No. 8191 had been rendered "... ineffective due to the
impossibility of accomplishing registration at the time the document was entered because of the non-availability of
the certificate (sic) of title involved. For said certificate of sale to be admitted for registration, there is a need
for it to be re-entered now that the titles have been reconstituted upon payment of new entry fees," and
by-passed the second query as having been rendered moot and academic by the answer to the first.
Unwilling to accept that result, the DBP appealed the resolution to the Court of Appeals (then the Intermediate
Appellate Court) which, after reviewing the record, certified the appeal to this Court as involving a question purely
of law.
SC Ruling
That view fails to find support from a consideration of entire context of said Section 56 which in another part
also provides that the instrument subject of a primary entry "... shall be regarded as registered from the time
so noted ...," and, at the very least, gives such entry from the moment of its making the effect of putting the whole
world on notice of the existence the instrument on entered. Such effect (of registration) clearly attaches to the
mere making of the entry without regard to the subsequent step of annotating a memorandum of the instrument
subject of the entry on the certificate of title to which it refers. Indeed, said Section, in also providing that the
annotation, "... when made ... shall bear the same date ..." as the entry, may be said to contemplate unspecified
intervals of time occurring between the making of a primary entry and that of the corresponding annotation on the
certificate of title without robbing the entry of the effect of being equivalent to registration. Neither, therefore, is the
implication in the appealed resolution that annotation must annotation entry immediately or in short order justified
by the language of Section 56.
Furthermore, it is amply clear that the four-year hiatus between primary entry and proposed annotation in
this case has not been of DBP's making. Though it was under no necessity to present the owner's duplicates of the
certificates of title affected for purposes of primary entry, since the transaction sought to be recorded was an
involuntary transaction, and the record is silent as to whether it presented them or not, there is nonetheless
every probability that it did so. It was the mortgagee of the lands covered by those titles and it is usual in mortgage
transactions that the owner's duplicates of the encumbered titles are yielded into the custody of the mortgage until
the mortgage is discharged. Moreover, the certificates of title were reconstituted from the owner's duplicates, and
again it is to be presumed that said duplicates were presented by DBP, the petitioner in the reconstitution
proceedings.
It is, furthermore, admitted that the requisite registration fees were fully paid and that the certificate of sale
was registrable on its face. DBP, therefore, complied with all that was required of it for purposes of both
primary entry and annotation of the certificate of sale. It cannot be blamed that annotation could not be
made contemporaneously with the entry because the originals of the subject certificates of title were missing
and could not be found, since it had nothing to do with their safekeeping. If anyone was responsible for failure
of annotation, it was the Register of Deeds who was chargeable with the keeping and custody of those
documents.
Land Titles: Primary Entry Book

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It does not, therefore, make sense to require DBP to repeat the process of primary entry, paying anew the
entry fees as the appealed resolution disposes, in order to procure annotation which through no fault on its
part, had to be deferred until the originals of the certificates of title were found or reconstituted. That it is
hardly just or equitable to do so also seems to have occurred to the Solicitor General, who dilutes his argument in
support of the appealed resolution with the suggestion that "... the making of a new entry ... would be the more
orderly procedure," and that DBP should not be made to pay filing fees anew.
Jurisprudence on the subject, while it has not been entirely consistent, is not wanting. In Government vs. Aballe,
this Court ruled that " ... (a)lthough a notice of attachment has not been noted on the certificate of title, its
notation in the book of entry of the register of deeds produces all the effects which the law gives to its
registration or inscription." Seemingly, that ruling was abandoned in the wartime case of Basa vs. De la Rama,
where it was held that the entry of an instrument in the primary entry book produces no legal effect unless a
memorandum thereof is noted on the certificate of title. Villasor vs. Camon, however, clarified that Aballe was
never really abandoned or reversed insofar as it applied to involuntary transactions: an attachment entered upon
the entry book is duly registered although the duplicate certificate is not presented at the time of registration to
the register of deeds. It [ruling in Aballe] was not abandoned for the decision was concurred by only two justices
or less than a majority, and said statement was not necessary or an obiter dictum and against the law, as
correctly stated by the two associate justices who dissented and only concurred in the result, but because said ruling,
subsisting and in force, does not support appellant's contention, for it is only applicable to registration of
involuntary instruments, such as attachment, or other liens and adverse claims of any description.
The decision in Villasor also quoted with approval the following excerpt from an earlier case, Philippine
National Bank vs. Fernandez: It was not necessary for the sheriff to present the owner's duplicate of the
certificate of title when he filed notice of attachment with the register of deeds, nor was it necessary for the
Philippine National Bank to present the owner's duplicate when the bank filed its certificate of sale for
registration.
Later cases appear to have applied the Aballe ruling that entry in the day book, even without the
corresponding annotation on the certificate of title, is equivalent to, or produces the effect of, registration to
voluntary transactions, provided the requisite fees are paid and the owner's duplicates of the certificates of
title affected are presented.
A similar ruling was made in Potenciano vs. Dineros, et al., concerning land a deed of sale of which was
entered in the day book upon payment of the corresponding fees and presentation of the owner's duplicate of the
covering certificate of title, on November 4, 1944. However, due to the confusion arising from the bombing of
Manila (this having happened during the final months of the Japanese Occupation), the papers presented by the
registrant were either lost or destroyed, no certificate of title was issued to him and as far as the records of the
Register of Deeds showed, the property remained in the name of the vendor. Another party later sued the vendor,
obtained judgment against him and purchased the property on execution sale. In affirming judgment annulling the
execution sale in an action brought by the original purchaser, this Court held:
The judgment creditor contends that entry of the deed in the day book is not sufficient registration.
Both upon law and authority this contention must be rejected. Section 56 of the Land Registration Act
says that deeds relating to registered land shall, upon payment of the filing fees, be entered in the
entry book — also called day book in the same section — with notation of the year, month, day, hour,
and minute of their reception and that "they shall be regarded as registered from the moment so
noted." An innocent purchaser for value of registered land becomes the registered owner and in
contemplation of law the holder of a certificate thereof the moment he presents and files a duly
notarized and lawful deed of sale and the same is entered on the day book and at the same time he
surrenders or presents the owner's duplicate certificate of title to the property sold and pays the full
amount of registration fees, because what remains to be done lies not within his power to perform.
Current doctrine thus seems to be that entry alone produces the effect of registration, whether the
transaction entered is a voluntary or an involuntary one, so long as the registrant has complied with all that is
required of him for purposes of entry and annotation, and nothing more remains to be done but a duty
incumbent solely on the register of deeds.
[RSPol note: Requisites in order for the innocent purchaser for value to be regarded the registered owner: (1)
notarized and lawful deed of sale, (2) presentation of owner’s duplicate certificate of title, and (3) payment of
registration fees. After compliance, what remains to be done lies with the ROD not with the registrant.]
Therefore, without necessarily holding that annotation of a primary entry on the original of the
certificate of title may be deferred indefinitely without prejudice to the legal effect of said entry, the Court
rules that in the particular situation here obtaining, annotation of the disputed entry on the reconstituted originals of
the certificates of title to which it refers is entirely proper and justified. To hold said entry "ineffective," as does the
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appealed resolution, amounts to declaring that it did not, and does not, protect the registrant (DBP) from claims
arising, or transactions made, thereafter which are adverse to or in derogation of the rights created or conveyed by
the transaction thus entered. That, surely, is a result that is neither just nor can, by any reasonable interpretation of
Section 56 of PD 1529, be asserted as warranted by its terms.
NHA vs Augusto
Facts
On April 19, 1983, spouses Augusto and Luz Basa loaned from NHA the amount of ₱556,827.10 secured
by a real estate mortgage over their properties covered by Transfer Certificates of Title (TCTs) Nos. 287008 and
285413, located at No. 30 San Antonio St., San Francisco del Monte, Quezon City. Spouses Basa did not pay the
loan despite repeated demands. To collect its credit, the NHA, on August 9, 1990, filed a verified petition for
extrajudicial foreclosure of mortgage before the Sheriff’s Office in Quezon City, pursuant to Act No. 3135, as
amended.
After notice and publication, the properties were sold at public auction where NHA emerged as the highest
bidder. On April 16, 1991, the sheriff’s certificate of sale was registered and annotated only on the owner’s
duplicate copies of the titles in the hands of the respondents, since the titles in the custody of the Register of
Deeds were among those burned down when a fire gutted the City Hall of Quezon City on June 11, 1988.
On April 16, 1992, the redemption period expired, without respondents having redeemed the properties.
Shortly thereafter, on April 24, 1992, NHA executed an Affidavit of Consolidation of Ownership over the foreclosed
properties, and the same was inscribed by the Register of Deeds on the certificates of title in the hand of NHA under
Entry No. 6572/T-287008-PR-29207.
On June 18, 1992, NHA filed a petition for the issuance of a Writ of Possession. The said petition was granted
by the Regional Trial Court (RTC) in an Order dated August 4, 1992.
A Writ of Possession was issued on March 9, 1993 by the RTC, ordering spouses Augusto and Luz Basa to
vacate the subject lots. The writ, however, remained unserved. This compelled NHA to move for the issuance of
an alias writ of possession on April 28, 1993.
RTC Ruling
Before the RTC could resolve the motion for the issuance of an alias writ of possession, respondents spouses
Basa and Eduardo Basa, on June 2, 1993, filed a Motion for Leave to Intervene and Petition in Intervention (with
Prayer for Temporary Restraining Order and/or Writ of Preliminary Injunction). Respondents anchored said petition
for intervention on Section 812 of Act No. 3135, as amended, which gives the debtor/mortgagor the remedy to
petition that the sale be set aside and the writ of possession be cancelled. In the said petition for intervention,
respondents averred that the extrajudicial foreclosure of the subject properties was a nullity since notices
were not posted and published, written notices of foreclosure were not given to them, and notices of sale were
not tendered to the occupants of the sold properties, thereby denying them the opportunity to ventilate their rights.
Respondents likewise insisted that even assuming arguendo that the foreclosure sale were valid, they were still
entitled to redeem the same since the one-year redemption period from the registration of the sheriff’s
certificate of foreclosure sale had not yet prescribed. Citing Bernardez v. Reyes and Bass v. De la Rama,
respondents theorized that the instrument is deemed registered only upon actual inscription on the certificate of
title in the custody of the civil registrar. Since the sheriff’s certificate was only inscribed on the owner’s
duplicate certificate of title, and not on the certificate of title in the possession of the Register of Deeds, then
there was no effective registration and the one-year redemption period had not even begun to run. Thus,
respondents asked the RTC, among others, to declare the foreclosure sale null and void, to allow the respondents to
redeem the mortgaged properties in the amount of ₱21,160.00, and to cancel the Writ of Possession dated March 9,
1993.
[RSPol note: The inscription was only made on the duplicate copy since the copy with the ROD was destroyed
by fire. To the respondents, there being no transciption on the COT with the ROD, there was no effective registration.
There being no registration, the one year period for redemption had not begun to run.]
On January 2, 1995, the RTC issued the first assailed Order with the following directives: 1) granting the
issuance of the alias writ of possession which allowed NHA to take possession of the subject properties; 2) admitting
the Petition in Intervention and "treating the same as the petition to set aside sale mentioned in [Sec. 8] of Act No.
3155"; and 3) granting the issuance of a Writ of Preliminary Injunction in favor of respondents that ordered NHA to
refrain from selling or disposing of the contested properties.

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CA Ruling
The Court of Appeals rendered a Decision dated February 24, 2000, in favor of the NHA. It declared null and
void the assailed orders of the RTC dated January 2, 1995 and September 4, 1995, to the extent that the said orders
admitted the petition in intervention and granted the issuance of the preliminary injunction; but it upheld the grant
of the alias writ of possession.
On November 27, 2000, the Court of Appeals, in its Amended Decision, reconsidered its earlier stance. It
declared that the period of redemption had not expired as the certificate of sale had not been registered or
annotated in the original copies of the titles supposedly kept with the Register of Deeds since said titles were
earlier razed by fire. Taking its cue from Bass v. De la Rama where the Court purportedly made a ruling that entry of
a document, such as sale of real property, in the entry book is insufficient to treat such document as registered,
unless the same had been annotated on the certificate of title; the Court of Appeals went on to say that the entry of
the certificate of sale in the owner’s duplicate of the titles could not have been sufficient to register the same
since anyone who would wish to check with the Register of Deeds would not see any annotation. Thus, entry
made on the owner’s duplicate of the titles cannot be considered notice that would bind the whole world. Having
been deprived of their right of redemption, the Court of Appeals deemed it proper to allow respondents to intervene.
Issue
The main issue before us is whether the annotation of the sheriff’s certificate of sale on the owner’s duplicate
certificate of titles is sufficient registration considering that the inscription on the original certificates could not be
made as the same got burned.
SC Ruling
Jurisprudence is replete with analogous cases. Of foremost importance is Development Bank of the Philippines
v. Acting Register of Deeds of Nueva Ecija where the Court listed cases where the transaction or instrument was
annotated not on the original certificate but somewhere else. In that case, DBP, following the extrajudicial
foreclosure sale where it emerged as the highest bidder, registered with the Register of Deeds the sheriff’s certificate
of sale in its favor. After it had paid the required fees, said transaction was entered in the primary entry book.
However, the annotation of the said transaction to the originals of the certificates of title could not be done because
the same titles were missing from the files of the Registry. This prompted DBP to commence reconstitution
proceedings of the lost titles. Four years had passed before the missing certificates of title were reconstituted. When
DBP sought the inscription of the four-year old sale transaction on the reconstituted titles, the Acting Register of
Deeds, being in doubt of the proper action to take, referred the matter to the Commissioner of the Land Registration
Authority by consulta, the latter resolved against the annotation of the sale transaction and opined that said entry was
"ineffective due to the impossibility of accomplishing registration at the time the document was entered
because of the non-availability of the certificate (sic) of title involved." In other words, annotation on the primary
book was deemed insufficient registration. The Court disagreed with this posture. Considering that DBP had paid all
the fees and complied with all the requirements for purposes of both primary entry and annotation of the certificate
of sale, the Court declared that mere entry in the primary book was considered sufficient registration since
"[DBP] cannot be blamed that annotation could not be made contemporaneously with the entry because the
originals of the subject certificates of title were missing and could not be found, since it had nothing to do
with their safekeeping. If anyone was responsible for failure of annotation, it was the Register of Deeds who was
chargeable with the keeping and custody of those documents."
To buttress its conclusion, the Court reviewed the relevant jurisprudence starting from 1934. The Court noted
that before the Second World War, particularly in Government of the Philippine Islands v. Aballe, the prevailing
doctrine was an inscription in the book of entry even without the notation on the certificate of title was
considered as satisfactory and produced all the effects which the law gave to its registration. During the war,
however, the Court observed that there was apparent departure from said ruling since in Bass v. De la Rama, the
holding was that entry of an instrument in the primary entry book does not confer any legal effect without a
memorandum thereof inscribed on the certificate of title. DBP noted that Bass v. De la Rama, however, survived
only for a little while since "later cases appear to have applied the Aballe ruling that entry in the day book, even
without the corresponding annotation on the certificate of title, is equivalent to, or produces the effect of, registration
to voluntary transactions, provided the requisite fees are paid and the owner’s duplicates of the certificates of title
affected are presented."
Simply, respondents’ resort to Bass v. De la Rama is futile as the same was abandoned by the later cases, i.e.,
Bass, Potenciano and DBP.
Indeed, the prevailing rule is that there is effective registration once the registrant has fulfilled all that is
needed of him for purposes of entry and annotation, so that what is left to be accomplished lies solely on the
register of deeds. The Court thus once held: Current doctrine thus seems to be that entry alone produces the
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effect of registration, whether the transaction entered is a voluntary or an involuntary one, so long as the
registrant has complied with all that is required of him for purposes of entry and annotation, and nothing
more remains to be done but a duty incumbent solely on the register of deeds.
There would be, therefore, no reason not to apply the ruling in said cases to this one. It was not NHA’s fault
that the certificate of sale was not annotated on the transfer certificates of title which were supposed to be in
the custody of the Registrar, since the same were burned. Neither could NHA be blamed for the fact that there
were no reconstituted titles available during the time of inscription as it had taken the necessary steps in having the
same reconstituted as early as July 15, 1988. NHA did everything within its power to assert its right.
While it may be true that, in DBP, the Court ruled that "in the particular situation here obtaining, annotation of
the disputed entry on the reconstituted originals of the certificates of title to which it refers is entirely proper and
justified," this does not mean, as respondents insist, that the ruling therein applies exclusively to the factual milieu
and the issue obtaining in said case, and not to similar cases. There is nothing in the subject declaration that
categorically states its pro hac vice character. For in truth, what the said statement really conveys is that the current
doctrine that entry in the primary book produces the effect of registration can be applied in the situation obtaining in
that case since the registrant therein complied with all that was required of it, hence, it was fairly reasonable that its
acts be given the effect of registration, just as the Court did in the past cases. In fact the Court there continued with
this pronouncement: To hold said entry ineffective, as does the appealed resolution, amounts to declaring that
it did not, and does not, protect the registrant (DBP) from claims arising, or transactions made, thereafter
which are adverse to or in derogation of the rights created or conveyed by the transaction thus entered. That,
surely, is a result that is neither just nor can, by any reasonable interpretation of Section 56 of Presidential Decree
No. 1529 be asserted as warranted by its terms.
Moreover, respondents’ stand on the non-applicability of the DBP case to other cases, absent any statement
thereof to such effect, contravenes the principle of stare decisis which urges that courts are to apply principles
declared in prior decisions that are substantially similar to a pending case.
Since entry of the certificate of sale was validly registered, the redemption period accruing to respondents
commenced therefrom, since the one-year period of redemption is reckoned from the date of registration of the
certificate of sale. It must be noted that on April 16, 1991, the sheriff’s certificate of sale was registered and
annotated only on the owner’s duplicate copies of the titles and on April 16, 1992, the redemption period
expired, without respondents having redeemed the properties. In fact, on April 24, 1992, NHA executed an
Affidavit of Consolidation of Ownership. Clearly, respondents have lost their opportunity to redeem the properties
in question.
On the Issue of Publication

As regards respondents’ allegation on the defect in the publication and notice requirements of the extrajudicial
foreclosure sale, the same is unavailing. The rule is that it is the mortgagor who alleges absence of a requisite
who has the burden of establishing such fact. This is so because foreclosure proceedings have in their favor the
presumption of regularity and the burden of evidence to rebut the same is on the party who questions it. Here,
except for their bare allegations, respondents failed to present any evidence to support them. In addition, NHA
stated in its Comment to Motion for Leave of Court to Intervene that it had complied with the publication of
the Notice of Sheriff’s Sale in the Manila Times in the latter’s issues dated July 14, 21 and 28, 1990. It also
claimed that an Affidavit of Publication of said newspaper was attached as Annex "B" in the said comment. NHA
also said that respondents had been furnished with a copy of the Notice of Sheriff’s Sale as shown at the bottom
portion of said notice. From all these, it would tend to show that respondents’ aspersion of non-compliance with the
requirements of foreclosure sale is a futile attempt to salvage its statutory right to redeem their foreclosed properties,
which right had long been lost by inaction.
On the Writ of Possession

Considering that the foreclosure sale and its subsequent registration with the Register of Deeds were
done validly, there is no reason for the non-issuance of the writ of possession. A writ of possession is an order
directing the sheriff to place a person in possession of a real or personal property, such as when a property is
extrajudicially foreclosed.
This provision of law authorizes the purchaser in a foreclosure sale to apply for a writ of possession
during the redemption period by filing an ex parte motion under oath for that purpose in the corresponding
registration or cadastral proceeding in the case of property with Torrens title. Upon the filing of such motion
and the approval of the corresponding bond, the law also in express terms directs the court to issue the order for a
writ of possession.
The time-honored precept is that after the consolidation of titles in the buyer’s name, for failure of the
mortgagor to redeem, the writ of possession becomes a matter of right. Its issuance to a purchaser in an
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extrajudicial foreclosure is merely a ministerial function. The writ of possession issues as a matter of course upon
the filing of the proper motion and the approval of the corresponding bond. The judge issuing the writ following
these express provisions of law neither exercises his official discretion nor judgment. As such, the court granting the
writ cannot be charged with having acted without jurisdiction or with grave abuse of discretion. To accentuate the
writ’s ministerial character, the Court disallowed injunction to prohibit its issuance despite a pending action for
annulment of mortgage or the foreclosure itself.
Durawood vs Candice Bona

Facts
On June 3, 2004, petitioner Durawood Construction and Lumber Supply, Inc. (Durawood) filed an action for
sum of money plus damages with a prayer for the issuance of a writ of preliminary attachment against LBB
Construction and Development Corporation (LBB Construction) and its president Leticia Barber (Barber) before the
Regional Trial Court (RTC) of Antipolo. In said suit, which was docketed as Civil Case No. 04-7240, Durawood
prayed for the sum of ₱665,385.50 as payment for construction materials delivered to LBB Construction. On
June 14, 2004, the RTC issued an Order granting Durawood’s prayer for the issuance of a writ of attachment.
On June 16, 2004, the corresponding writ was issued. On June 17, 2004, Sheriff Rolando C. Leyva (Sheriff Leyva)
levied on a 344-square meter parcel of land in Richdale Subdivision, Antipolo City covered by Transfer
Certificate of Title (TCT) No. R-17571 in the name of LBB Construction. A Notice of Levy on Attachment was
annotated in TCT No. R-17571’s Memorandum of Encumbrances on the same day, June 17, 2004.
On July 13, 2004, respondent Candice S. Bona (Candice) filed a Motion seeking leave to intervene in Civil
Case No. 04-7240. Attached to said Motion was Candice’s Answer in Intervention, her Third Party Claim addressed
to Sheriff Leyva, and a copy of TCT No. R-17571. Candice claimed therein that she is a co-owner of the
property covered by TCT No. R-17571. She alleged that LBB Construction had sold the property to her and her
siblings, Michael Angelo S. Bona, Diane Sheila S. Bona, Glenda May S. Bona and Johann Louie Sebastian S. Bona,
through a Deed of Absolute Sale dated June 2, 2004. Candice asserted that the sale is the subject of Entry No.
30549 dated June 16, 2004 in the books of the Registry of Deeds of Antipolo City, while the levy on attachment
is only Entry No. 30590 dated June 17, 2004. What was attached to the Motion was a copy of TCT No. R-17571,
and not a title in Candice and her co-owners’ names.
[RSPol note: Property was attached on June 17, 2004 and the sale between LBB and Candice took place on
June 2, 2004, which sale was registered on June 16, 2004.]
On August 11, 2004, the RTC issued an Order granting Candice’s Motion to Intervene.
LBB Construction and Barber filed their Answer in Civil Case No. 04-7240, but failed to attend the scheduled
hearings, including the pre-trial. Consequently, Durawood was allowed to present its evidence ex parte.
It would appear from the records that on June 16, 2004, the supposed Register of Deeds of Antipolo City, Atty.
Randy A. Rutaquio (Atty. Rutaquio), cancelled TCT No. R-17571 and issued TCT No. R-22522 in the name of
Candice and her co-owners. The parties, however, do not dispute that said cancellation of the old TCT and
issuance of the new one was antedated, since Atty. Rutaquio was still the Register of Deeds of Malabon on said
date. According to a certification of the Land Registration Authority, it was a certain Atty. Edgar D. Santos
(Atty. Santos) who was the Acting Register of Deeds of Antipolo City on June 16, 2004.
RTC Ruling
The Register of Deeds of Antipolo City is directed to reinstate the notice of levy on attachment in TCT No.
R-22522 in the names of intervenors immediately upon receipt of this Order.
On March 8, 2006, the new Acting Register of Deeds Jose S. Loriega, Jr. complied with the March 6, 2006
Order of the RTC by reinstating in TCT No. R-22522 the Notice of Levy on Attachment in favor of
Durawood.
On April 7, 2006, the RTC issued an Order denying Candice’s Motion for Reconsideration. In said Order, the
RTC highlighted its observation that in TCT No. R-17571, the inscription of the levy on attachment by Atty.
Santos dated June 17, 2004 was in page A (the dorsal portion) of the title, while the supposedly earlier
inscription of the Deed of Sale by Atty. Rutaquio dated June 16, 2004 was found in page B (a separate page)
of the title. The RTC found this fact, as well as the above-mentioned certification that Atty. Santos was the Acting
Register of Deeds of Antipolo City from June 1 to 30, 2004, sufficient proof of the irregularity of the June 16, 2004
inscription of the Deed of Sale.
[RSPol Note: The levy inscription by Atty. Santos was in Page A on June 17 when Santos was the acting ROD
of Antipolo but the supposed earlier transaction (sale) was inscribed by Atty. Rutaquio in Page B when Rutaquio was
still ROD in Malabon.]

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On April 11, 2006, Sheriff Leyva sold the subject property at public auction for ₱1,259,727.90 with Durawood
being the lone bidder, and issued the corresponding Certificate of Sale. The sale was inscribed in TCT No. R-22522
on the same date.
Candice filed with the Court of Appeals a Petition for Certiorari and Prohibition assailing the March 2, 2006
and April 7, 2006 Orders of the RTC.
CA Ruling
On April 18, 2007, the Court of Appeals rendered the assailed Decision in favor of Candice. According to
the Court of Appeals, the sequence of presentation of the entries in the TCT cannot control the determination
of the rights of the claimants over a disputed property. It is the registration in the Primary Entry Book (also
referred to in other cases as the day book) that establishes the order of reception of instruments affecting registered
land. As explained by Atty. Rutaquio, the entry in the day book is only the preliminary step in the registration. The
inscription of the levy on attachment on TCT No. R-17571 (which was made before the inscription of the Deed of
Sale on said title) retroacts to the date of entry in the Primary Entry Book, which is June 17, 2004. However, the
inscription of the Deed of Sale on TCT No. R-17571, although made after the inscription of the levy on attachment,
retroacts to the earlier date of entry in the Primary Entry Book, which is June 16, 2004.
SC Ruling
The Court of Appeals, in considering the date of entry in the day book of the Registry of Deeds as controlling
over the presentation of the entries in TCT No. R-17571, relied on Section 56 of Presidential Decree No. 1529 which
provides that:
SEC. 56. Primary Entry Book; fees; certified copies. – Each Register of Deeds shall keep a primary
entry book in which, upon payment of the entry fee, he shall enter, in the order of their reception, all
instruments including copies of writs and processes filed with him relating to registered land. He shall, as a
preliminary process in registration, note in such book the date, hour and minute of reception of all
instruments, in the order in which they were received. They shall be regarded as registered from the
time so noted, and the memorandum of each instrument, when made on the certificate of title to
which it refers, shall bear the same date: Provided, that the national government as well as the provincial
and city governments shall be exempt from the payment of such fees in advance in order to be entitled to
entry and registration.
The consequence of the highlighted portion of the above section is two-fold: (1) in determining the date in
which an instrument is considered registered, the reckoning point is the time of the reception of such
instrument as noted in the Primary Entry Book; and (2) when the memorandum of the instrument is later made on
the certificate of title to which it refers, such memorandum shall bear the same date as that of the reception of the
instrument as noted in the Primary Entry Book. Pursuant to the second consequence stated above, the Court of
Appeals held that Atty. Rutaquio correctly placed the date of entry in the Primary Entry Book as the date of the
memorandum of the registration of the deed of sale in TCT No. R-17571.
As regards the first consequence, this Court has applied the same in several cases. Thus, in the old cases of
Levin v. Bass, Potenciano v. Dineros, and Development Bank of the Philippines v. Acting Register of Deeds of Nueva
Ecija, as well as in the fairly recent cases of Autocorp Group v. Court of Appeals, Armed Forces and Police Mutual
Benefit Association, Inc. v. Santiago, and National Housing Authority v. Basa, Jr., we upheld the entry of
instruments in the Primary Entry Book to be equivalent to registration despite even the failure to annotate
said instruments in the corresponding certificates of title.
Based on this alone, it appears that the RTC was in error when it considered the registration of the Absolute
Deed of Sale on June 16, 2004 inferior to the registration of the Notice of Levy on Attachment on June 17, 2004 on
the ground that the Attachment was annotated on TCT No. R-17571 earlier than the Deed of Sale. As discussed in
the above-mentioned cases, the annotation in the certificate of title is not determinative of the effectivity of the
registration of the subject instrument.
However, a close reading of the above-mentioned cases reveals that for the entry of instruments in the Primary
Entry Book to be equivalent to registration, certain requirements have to be met. Thus, we held in Levin that:
Do the entry in the day book of a deed of sale which was presented and filed together with the owner's
duplicate certificate of title with the office of the Registrar of Deeds and full payment of registration fees
constitute a complete act of registration which operates to convey and affect the land? In voluntary
registration, such as a sale, mortgage, lease and the like, if the owner's duplicate certificate be not
surrendered and presented or if no payment of registration fees be made within 15 days, entry in the day
book of the deed of sale does not operate to convey and affect the land sold.

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In Development Bank of the Philippines v. Acting Register of Deeds of Nueva Ecija, this Court applied the
provisions of Presidential Decree No. 1529 and modified the doctrine as follows: Current doctrine thus seems to be
that entry alone produces the effect of registration, whether the transaction entered is a voluntary or an
involuntary one, so long as the registrant has complied with all that is required of him for purposes of entry
and annotation, and nothing more remains to be done but a duty incumbent solely on the register of deeds.
This pronouncement, which was reiterated in National Housing Authority v. Basa, Jr., shows that for the entry
to be considered to have the effect of registration, there is still a need to comply with all that is required for entry
and registration, including the payment of the prescribed fees. Thus, in Autocorp Group v. Court of Appeals, this
Court compared the date when the required fees were paid with the therein assailed writ of preliminary injunction:
Petitioners contend that payment of the entry fee is a condition sine qua non before any valid entry can
be made in the primary entry book. Allegedly, the Court of Appeals resorted to judicial legislation when it
held that the subsequent payment of the entry fee was curative and a substantial compliance with the law.
Petitioners claim that the ruling in DBP vs. Acting Register of Deeds of Nueva Ecija does not apply to this
case. As there was no valid registration, petitioners conclude that the order of the trial court issuing a writ
of preliminary injunction was proper, considering the irregularities present in the conduct of the
extrajudicial foreclosure.
The objection as to the payment of the requisite fees is unavailing. There is no question that the fees
were paid, albeit belatedly. Respondent bank presented the certificate of sale to the Office of the Register of
Deeds of Cebu City for registration on January 21, 1999 at 4:30 p.m. As the cashier had already left, the
Office could not receive the payment for entry and registration fees, but still, the certificate of sale was
entered in the primary entry book. The following day, respondent bank paid the requisite entry and
registration fees. Given the peculiar facts of the case, we agree with the Court of Appeals that the payment
of respondent bank must be deemed to be substantial compliance with the law; and, the entry of the
instrument the day before, should not be invalidated. In any case, even if we consider the entry to have
been made on January 22, the important fact is that the entry in the primary entry book was done
prior to the issuance of the writ of injunction [on February 15, 1999; TRO issued on January 25, 1999]
by the trial court.
Records in the case at bar reveal that as of June 25, 2004, the date of the letter of Atty. Santos seeking the
opinion of the LRA as regards the registration of the Deed of Sale and the Notice of Levy on Attachment, the
required registration fees for the Deed of Sale has not yet been paid:
In view of the foregoing, we are now in a quandary as to what proper steps should be taken. It should
be noted further that the required registration fees of the abovementioned sale was not paid the
reason for which the same was not immediately acted upon by the undersigned.
Since there was still no compliance of "all that is required x x x for purposes of entry and
annotation" of the Deed of Sale as of June 25, 2004, we are constrained to rule that the registration of
the Notice of Levy on Attachment on June 17, 2004 should take precedence over the former.
Considering that the Notice of Levy on Attachment was deemed registered earlier than the Deed of Sale,
the TCT issued pursuant to the latter should contain the annotation of the Attachment.
In view of the foregoing, we find that the RTC was, in fact, acting properly when it ordered the reinstatement
of the Notice of Levy on Attachment in TCT No. R-22522. Since the RTC cannot be considered as to have acted in
grave abuse of its discretion in issuing such Order, the Petition for Certiorari assailing the same should have been
dismissed.
Petition for review on certiorari was granted.
[RSPol Note: For an entry to have the effect of registration, requirements must be complied with including
payment of registration fee. In this case, it is to be noted that although the sale took place on June 16 for registration
which was before inscription of levy on June 17, the registration fee for the June 16 transaction was not yet paid
even up to June 25. There being no payment, there was no valid registration. There being no registration of sale prior
to the attachment, the levy on attachment must prevail and be reinstated.]
MWSS vs CA
Facts
Sometime in 1965, petitioner MWSS (then known as NAWASA) leased around one hundred twenty eight (128)
hectares of its land (hereafter, subject property) to respondent CHGCCI (formerly the International Sports
Development Corporation) for twenty five (25) years and renewable for another fifteen (15) years or until the year
2005, with the stipulation allowing the latter to exercise a right of first refusal should the subject property be made
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open for sale. The terms and conditions of respondent CHGCCI's purchase thereof shall nonetheless be subject to
presidential approval.
Pursuant to Letter of instruction (LOI) No. 440 issued on July 29,1976 by then President Ferdinand E.
Marcos directing petitioner MWSS to negotiate the cancellation of the MWSS-CHGCCI lease agreement for
the disposition of the subject property, Oscar Ilustre, then General Manager of petitioner MWSS, sometime in
November of 1980 informed respondent CHGCCI, through its president herein respondent Pablo Roman, Jr., of its
preferential right to buy the subject property which was up for sale. Valuation thereof was to be made by an
appraisal company of petitioner MWSS' choice, the Asian Appraisal Co., Inc. which, on January 30, 1981, pegged a
fair market value of P40.00 per square meter or a total of P53,800,000.00 for the subject property.
Upon being informed that petitioner MWSS and respondent CHGCCI had already agreed in principle on the
purchase of the subject property, President Marcos expressed his approval of the sale as shown in his marginal
note on the letter sent by respondents Jose Roxas and Pablo Roman, Jr. dated December 20, 1982.
The Board of Trustees of petitioner MWSS thereafter passed Resolution 36-83, approving the sale of the
subject property in favor of respondent SILHOUETTE, as assignee of respondent CHGCCI. The
MWSS-SILHOUETTE sales agreement eventually pushed through. Per the Agreement dated May 11, 1983
covering said purchase, the total price for the subject property is P50,925,200, P25 Million of which was to be
paid upon President Marcos' approval of the contract and the balance to be paid within one (1) year from the
transfer of the title to respondent SILHOUETTE as vendee with interest at 12% per annum. The balance was
also secured by an irrevocable letter of credit. A Supplemental Agreement was forged between petitioner MWSS and
respondent SILHOUETTE on August 11, 1983 to accurately identify the subject property.
Subsequently, respondent SILHOUETTE, under a deed of sale dated July 26, 1984, sold to respondent
AYALA about sixty-seven (67) hectares of the subject property at P110.00 per square meter. Of the total price of
around P74 Million, P25 Million was to be paid by respondent AYALA directly to petitioner MWSS for
respondent SILHOUETTE's account and P2 Million directly to respondent SILHOUETTE. P11,600,000 was
to be paid upon the issuance of title in favor of respondent AYALA, and the remaining balance to be payable within
one (1) year with 12% per annum interest.
Respondent AYALA developed the land it purchased into a prime residential area now known as the
Ayala Heights Subdivision.
Almost a decade later, petitioner MWSS on March 26, 1993 filed an action against all herein named
respondents before the Regional Trial Court of Quezon City seeking for the declaration of nullity of the
MWSS-SILHOUETTE sales agreement and all subsequent conveyances involving the subject property, and for
the recovery thereof with damages.
Respondent AYALA filed its answer pleading the affirmative defenses of (1) prescription, (2) laches, (3)
waiver/estoppel/ratification, (4) no cause of action, (5) non-joinder of indispensable parties, and (6) non-jurisdiction
of the court for non-specification of amount of damages sought.
RTC Ruling
On June 10, 1993; the trial court issued an Order dismissing the complaint of petitioner MWSS on grounds
of prescription, laches, estoppel and non-joinder of indispensable parties.
Petitioner MWSS's motion for reconsideration of such Order was denied, forcing it to seek relief from the
respondent Court where its appeal was docketed as CA-G.R. CV No. 50654.
SC Ruling
On Prescription
Petitioner MWSS claims as erroneous both the lower courts' uniform finding that the action has prescribed,
arguing that its complaint is one to declare the MWSS-SILHOUETTE sale, and all subsequent conveyances of the
subject property, void which is imprescriptible.
We disagree. The three elements of a contract — consent, the object, and the cause of obligation1 are all
present. It cannot be otherwise argued that the contract had for its object the sale of the property and the cause or
consideration thereof was the price to be paid (on the part of respondents CHGCCI/SILHOUETTE) and the land to
be sold (on the part of petitioner MWSS). Likewise, petitioner MWSS' consent to the May 11, 1983 and August 11,
1983 Agreements is patent on the face of these documents and on its own resolution No. 36-83.
As noted by both lower courts, petitioner MWSS admits that it consented to the sale of the property, with
the qualification that such consent was allegedly unduly influenced by the President Marcos. Taking such
allegation to be hypothetically true, such would have resulted in only voidable contracts because all three
elements of a contract, still obtained nonetheless. The alleged vitiation of MWSS' consent did not make the sale
null and void ab initio. Thus, "a contract where consent is given through mistake, violence, intimidation, undue

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influence or fraud, is voidable". Contracts "where consent is vitiated by mistake, violence, intimidation, undue
influence or fraud" are voidable or annullable.
As the contracts were voidable at the most, the four year prescriptive period under Art. 1391 of the New
Civil Code will apply. This article provides that the prescriptive period shall begin in the cases of intimidation,
violence or undue influence, from the time the defect of the consent ceases", and "in case of mistake or fraud, from
the time of the discovery of the same time".
Hypothetically admitting that President Marcos unduly influenced the sale, the prescriptive period to annul
the same would have begun on February 26, 1986 which this Court takes judicial notice of as the date
President Marcos was deposed. Prescription would have set in by February 26, 1990 or more than three years
before petitioner MWSS' complaint was failed. [RSPol Note: MWSS filed a complain only in 1993.]
However, if petitioner MWSS' consent was vitiated by fraud, then the prescriptive period commenced
upon discovery. Discovery commenced from the date of the execution of the sale documents as petitioner was
party thereto. At the least, discovery is deemed to have taken place on the date of registration of the deeds
with the register of Deeds as registration is constructive notice to the world. Given these two principles on
discovery, the prescriptive period commenced in 1983 as petitioner MWSS actually knew of the sale, or, in 1984
when the agreements were registered and titles thereafter were issued to respondent SILHOUTTE. At the latest,
the action would have prescribed by 1988, or about five years before the complaint was instituted.
[RSPol Note: MWSS knew of the sale in 1983 or in 1984 upon registration of the sale. Hence, the action has
prescribed in 1988, four years from 1984.]
Petitioner MWSS further contends that prescription does not apply as its complaint prayed not for the
nullification of voidable contracts but for the declaration of nullity of void ab initio contracts which are
imprescriptible. This is incorrect, as the prayers in a complaint are not determinative of what legal principles will
operate based on the factual allegations of the complaint. And these factual allegations, assuming their truth,
show that MWSS consented to the sale, only that such consent was purportedly vitiated by undue influence or
fraud. Therefore, the rules on prescription will operate. Even if petitioner MWSS asked for the declaration of
nullity of these contracts, the prayers will not be controlling as only the factual allegations in the complaint
determine relief. "(I)t is the material allegations of fact in the complaint, not the legal conclusion made therein or the
prayer that determines the relief to which the plaintiff is entitled"
Petitioner MWSS also theorizes that the May 11, 1983 MWSS-SILHOUTTE Agreement and the August 11,
1983 Supplemental Agreement were void ab initio because the "initial agreement" from which these agreements
emanated was executed "without the knowledge, much less the approval" of petitioner MWSS through its
Board of Trustees. The "initial agreement" referred to in petitioner MWSS' argument is the December 20, 1982
letter of respondents Roxas and Roman, Jr. to President Marcos where the authors mentioned that they had reached
an agreement with petitioner's then general manager, Mr. Oscar Ilustre. Petitioner MWSS maintains that Mr.
Ilustre was not authorized to enter into such "initial agreement", contrary to Art. 1874 of the New Civil Code
which provides that "when a sale of a parcel of land or any interest therein is through an agent, the authority of the
latter shall be in writing otherwise the sale shall be void." It then concludes that since its Res. No. 36-83 and the
May 11, 1983 and August 11, 1983 Agreements are "fruits" of the "initial agreement" (for which Mr. Ilustre was
allegedly not authorized in writing), all of these would have been also void under Art. 1422 of NCC, which provides
that a contract which is the direct result of a pronounced illegal contract, is also void and inexistent."
The argument does not impress. The "initial agreement" reflected in the December 20, 1982 letter of
respondent Roman to Pres. Marcos, is not a sale under Art. 1874. Since the nature of the "initial agreement" is
crucial:
We respectfully approach Your Excellency in all humility and in the spirit of the Yuletide Season. We
have explained to Your Excellency when you allowed us the honor to see you, that the negotiations with
MWSS which the late Pablo R. Roman initiated way back in 1975, with your kind approval, will finally be
concluded.
We have agreed in principle with Mr. Oscar Ilustre on the terms of the sale as evidenced by the
following:
1. Our written agreement to hire Asian Appraisal Company to appraise the entire leased area which
then be the basis for the negotiations of the purchase price of the property; and
2. Our exchange of communications wherein made a counter-offer and our acceptance counter-offer.
However, we were informed by Mr. Ilustre that only written instruction from Your Excellency will allow
us to finally sign the Agreement.
In sum, our Agreement is for the purchase price of FIFTY-SEVEN MILLION TWO-HUNDRED-FORTY
THOUSAND PESOS (P57,240,000) for the entire leased area of 135 hectares; TWENTY-SEVEN MILLION
PESOS (P27,000,000) payable upon approval of the contract by Your Excellency and the balance of
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THIRTY MILLION TWO HUNDRED FORTY THOUSAND PESOS (P30,240,000) after one (1) year
inclusive of a 12% interest.
We believe that this arrangement is fair and equitable to both parties considering that the value of the
land was appraised by a reputable company and independent appraisal company jointly commissioned by
both parties and considering further that Capitol Hills has still a 23-year lien on the property by virtue of
its existing lease contract with MWSS.
We humbly seek your instruction, Your Excellency and please accept our families' sincere wish for a
Merry Christmas and a Happy New Year to you and the First Family.
The foregoing does not document a sale, but at most, only the conditions proposed by respondent Roman to
enter into one. By the terms thereof, it refers only to an "agreement in principle". Reflecting a future consummation,
the letter mentions "negotiations with MWSS (which) with your (Marcos) kind approval, will finally be
concluded". It must likewise be noted that presidential approval had yet to be obtained. Thus, the "initial
agreement" was not a sale as it did not in any way transfer ownership over the property. The proposed terms had yet
to be approval by the President and the agreement in principle still had to be formalized in a deed of sale. Written
authority as is required under Art. 1834 of the New Civil Code, was not needed at the point of the "initial
agreement". [RSPol Note: The agreement was not a sale but a condition to formalize a deed of sale.]
Verily, the principle on prescription of actions is designed to cover situations such as the case at bar, where
there have been a series of transfers to innocent purchasers for value. To set aside these transactions only to
accommodate a party who has slept on his rights is anathema to good order.
On Laches
Even assuming, for argument's sake, that the allegations in the complaint establish the absolute nullity of the
assailed contracts and hence imprescriptible, the complaint can still be dismissed on the ground of laches which is
different from prescription. This Court, as early as 1966, has distinguished these two concepts in this wise:
. . . (T)he defense of laches applies independently of prescription. Laches is different from the statute
of limitations. Prescription is concerned with the fact of delay, whereas laches, is concerned with the
effect of delay. Prescription is a matter of time; laches is principally a question of inequity of
permitting a claim to be enforced, this inequity being founded on some change in the condition of the
property or the relation of the parties. Prescription is statutory; laches is not. Laches applies in inequity,
whereas prescription applies at law. Prescription is based on fixed-time; laches is not.
Thus, the prevailing doctrine is that the right to have a contract declared void ab initio may be barred by
laches although not barred by prescription.
Elements of laches:
(1) conduct on the part of the defendant, or one under whom he claims, giving rise to the situation that led to
the complaint and for which the complaint seeks a remedy;
(2) delay in asserting the complainant's rights, having had knowledge or notice of the defendant's conduct
and having been afforded an opportunity to institute a suit;
(3) lack of knowledge or notice on the part of the defendant that the complainant would assert the right on
which he bases his suit; and
(4) injury or prejudice to the defendant in the event relief is accorded to the complainant, or the suit is not
held barred.
There is no question on the presence of the first element. the main thrust of petitioner MWSS's complaint is to
bring to the fore what it claims as fraudulent and/or illegal acts of the respondents in the acquisition of the subject
property.
The second element of delay is evident from the fact that petitioner tarried for almost ten (10) years from the
conclusion of the sale sometime in 1983 before formally laying claim to the subject property in 1993.
The third element is present as can be deduced from the allegations in the complaint that petitioner MWSS (a)
demanded for a downpayment for no less than three times; (b) accepted downpayment for P25 Million; and (c)
accepted a letter of credit for the balance.
On Ratification
Pertinent to this issue is the claim of petitioner MWSS that Mr. Ilustre was never given the authority by its
Board of Trustees to enter into the "initial agreement" of December 20, 1982 and therefore, the sale of the subject
property is invalid.

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Petitioner MWSS misses the paint. The perceived infirmity in the "initial agreement" can be cured by
ratification. So settled is the precept that ratification can be made by the corporate board either expressly or
impliedly. Implied ratification may take various forms — like silence or acquiescence; by acts showing
approval or adoption of the contract; or by acceptance and retention of benefits flowing therefrom. Both
modes of ratification have been made in this case.
There was express ratification made by the Board of petitioner MWSS when it passed Resolution No.
36-83 approving the sale of the subject property to respondent SILHOUETTE and authorizing Mr. Ilustre, as
General Manager, "to sign for and in behalf of the MWSS the contract papers and other pertinent documents
relative thereto." Implied ratification by "silence or acquiescence" is revealed from the acts of petitioner MWSS
in (a) sending three (3) demand letters for the payment of the purchase price, (b) accepting P25 Million as
downpayment, and (c) accepting a letter of credit for the balance, as hereinbefore mentioned. It may well be pointed
out also that nowhere in petitioner MWSS' complaint is it alleged that it returned the amounts, or any part thereof,
covering the purchase price to any of the respondents-vendees at any point in time. This is only indicative of
petitioner MWSS' acceptance and retention of benefits flowing from the sales transactions which is another form of
implied ratification.
On Non-Joinder of Indispensable Parties

There is no denying that petitioner MWSS' action against herein respondents for the recovery of the subject
property now converted into a prime residential subdivision would ultimately affect the proprietary rights of
the many lot owners to whom the land has already been parceled out. They should have been included in the
suit as parties-defendants, for "it is well established that owners of property over which reconveyance is asserted
are indispensable parties without whom no relief is available and without whom the court can render no valid
judgment." Being indispensable parties, the absence of these lot-owners in the suit renders all subsequent actions of
the trial court null and void for want of authority to act, not only as to the absent parties but even as to those present.
Thus, when indispensable parties are not before the court, the action should be dismissed.
[RSPol Notes: The lot owners of the subdivision by AYALA were not included in the suit when they are
indispensable parties in an action for reconveyance. There being no presence of the indispensable parties, the action
should be dismissed.]
Rodriguez vs Sioson
Facts
This petition is the aftermath of a series of sales transactions entered into by Neri delos Reyes (Neri) over a
portion of a property formerly identified as Lot 398, with an area of 22,398 square meters, covered by Transfer
Certificate of Title (TCT) No. T-86275 and registered in the name of "Neri delos Reyes, married to Violeta Lacuata."
Sometime in 1997, the Municipality of Orani, Bataan (Municipality) purchased from Neri an area of about
1.7 hectare of Lot 398, to be used for the extension of the Municipality's public market. Among other things, it
was agreed that upon full payment of the purchase price, Neri will surrender the mother title to the
Municipality for subdivision of the property on the condition that Neri will equitably share in the expense
thereof.
Lot 398 was subsequently subdivided into 5 lots: Lot 398-A, Lot 398-B, Lot 398-C, Lot 398-D, and Lot
398-E. Lots 398-C and 398-D pertain to the portions that were sold to the Municipality, while Lot 398-E is a road
lot. Consequently, only Lots 398-A and 398-B were left as the remaining portions over which Neri retained
absolute title. TCT Nos. T-209894 and T-209895 were then respectively issued over Lots 398-A and 398-B and
were both registered in the name of "Neri delos Reyes, married to Violeta Lacuata." The owner's duplicate copies of
TCT Nos. T-209894 and T-209895, however, were retained by the Municipality pending Neri's payment of his
share in the expenses incurred for the subdivision of Lot 398. These were placed under the custody of the
Municipal Treasurer, where they continue to remain.
[RSPol Note: 398-A and 398-B were portions retained by Neri; 398-C and 398-D were portions sold to the
Municipality; and 398-E was a road lot.]
Neri, however, alleged that then Municipal Mayor Mario Zuñiga suggested that he sell Lot 398-A to his
aunt, petitioner Thelma Rodriguez (Thelma). The Municipality would then expropriate the same from Thelma.
Neri agreed to the suggestion.
After agreeing to the amount of ₱l,243,000.00 as the selling price, Thelma, on March 20, 1997, issued a check
for said amount payable to Neri. When it fell due, no sufficient funds were available to cover the check.
Consequently, it was agreed that Thelma would pay the purchase price in installments from March 20, 1997 to
September 4, 1997. Thelma, however, was only able to pay ₱442,293.50 [of the 1.2M].
[RSPol Note: Remember that Neri only agreed to sell Lot 398-A to Thelma.]
RSPol
On November 12, 2001, Thelma caused the annotation of an adverse claim on TCT No. T-209894. At about the
same time, Thelma saw an announcement that a new Orani Common Terminal would be built on Lot 398-A. As she
has not yet entered into any agreement regarding the utilization of said lot, Thelma filed a Complaint for Injunction
docketed as Civil Case No. 7394 against then incumbent mayor Efren Pascual, Jr. (Mayor Pascual), and the
Municipality under claim of ownership. To support her claim, Thelma incorporated in her complaint a copy of an
undated and unnotarized deed of absolute sale allegedly executed by Neri in her favor.
In their joint verified answer, Mayor Pascual and the Municipality acknowledged that Thelma became the
owner of Lot 398-A by way of purchase from Neri.
In 2002, Neri executed an affidavit claiming that the owner's copies of TCT No. T-209894 (covering Lot
398-A) and TCT No. T-209895 (covering Lot 398-B) were lost, which was annotated on the original copy of
TCT No. T-209894 on May 8, 2002. Two days after, or on May 10, 2002, Neri caused the cancellation of Thelma's
adverse claim. Neri also caused the reconstitution of new owner's copies of TCT Nos. T-209894 and T-209895.
Thereafter, new copies of TCT Nos. T-209894 and T-209895 were issued, and Neri then sold Lot 398-A to
Spouses Jaime and Armi Sioson, Spouses Joan and Joseph Camacho, and Agnes Samonte (respondents) - in a
deed of sale dated November 27, 2002. A special power of attorney was executed by Violeta delos Reyes (Violeta) in
favor of Neri for the purpose. Consequently, TCT No. T-209894 [covering lot 398-A] was cancelled, and TCT No.
T-226775 was thus issued in the respondents' names.
Upon the issuance of TCT No. T-226775, the respondents declared Lot 398-A for tax purposes and paid them
accordingly. They sought to take actual possession thereof by filling it; however, after they filled said lot with
about 40 truckloads of soil/fillings, Thelma sent two armed blue guards who entered the premises and set up a
tent therein. The respondents brought the matter to the attention of barangay authorities who referred them to the
municipal mayor. As the municipal mayor did not take any action, the respondents filed a forcible entry case
against Thelma before the Municipal Circuit Trial Court of Orani-Samal, Bataan, docketed as Civil Case No.
843. The said ejectment case is still pending.
After Thelma learned of the second sale of Lot 398-A, she filed against the respondents a complaint for the
Declaration of Nullity of the Second Sale and TCT No. T-226775 on February 11, 2003, docketed as Civil Case
No. 7664. In support of her claim, Thelma once again presented a deed of absolute sale executed by Neri in her favor.
This time, the deed of sale she presented was duly signed by her and Neri, witnessed, notarized and dated
April 10, 1997.
[RSPol Note: It will be remembered that in 2001, the deed of sale between Neri and Thelma was unnotarized
when the latter filed an Injunction against Mayor Pascual in Civil Case 7394.]
The respondents countered that they are innocent purchasers for value having bought Lot 398-A at the time
when Thelma's adverse claim was already cancelled. While they admit Thelma's possession of the subject property,
they, however, qualify that possession is being contested in a separate action for forcible entry. The respondents
also filed a verified answer-in-intervention in Civil Case No. 7394 (injunction case against Mayor Pascual)
contending that they are the present registered owners of Lot 398-A, and as such, Thelma is not entitled to any
relief.
[RSPol Note: Civil Case 7394 is the injuction against Mayor Pascual by Thelma; Civil Case 7664 is the
declaration of nullity of the second sale against respondents by Thelma; and Civil Case 843 is the forcible entry
against Thelma by the respondents.]
RTC Ruling
The RTC jointly heard Civil Case No. 7394 and Civil Case No. 7664 and after trial, rendered judgment in
favor of Thelma. The RTC concluded that by Neri's admission that he sold the subject lot to Thelma for a
consideration of ₱l,243,000.00, and his acknowledgement receipt of ₱442,293.50 as partial payment from the latter,
the transaction between Thelma and Neri should be regarded as an executed contract of sale. Hence, Lot
398-A was subjected to a double sale when Neri sold the same property to the respondents. The RTC further ruled
that the contract of sale between Neri and the respondents is null and void because it was transacted and
executed at the time when Neri was no longer the owner of Lot 398-A. It was legally inexistent for lack of object
certain. Thereupon, the fact that the respondents were able to register their acquisition first is of no moment.
Registration does not legitimize a void contract and thus, TCT No. T-226775 should be cancelled.
CA Ruling
Contrary to the findings of the RTC, the CA found that the contract between Neri and Thelma was a mere
contract to sell and not a contract of sale; hence, there was no double sale of Lot 938-A. According to the CA,
the question of whether or not the respondents are buyers in good faith is unavailing since the concept of a "buyer
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in good faith" finds relevance only in cases of double sale. The CA further stated that even if it is assumed that the
contract between Neri and Thelma was an absolute contract of sale, the same is nonetheless void for lack of consent
of Neri's wife, Violeta, insofar as the object of the transaction is a conjugal property.
SC Ruling
On Contract to Sell
"The real character of the contract is not the title given, but the intention of the parties." In this case,
there exist two deeds of absolute sale. Though identically worded, the first contract was undated, not notarized,
signed only by Neri, and was presented in Civil Case No. 7394 for Injunction, while the second deed was dated
April 10, 1997, notarized on September 5, 1997, signed by both Neri and Thelma, and was presented in Civil Case
No. 7664 for Declaration of Nullity of Deed of Sale and Title.
In determining the nature of the agreement between Thelma and Neri, the CA took note of these two
documents, and, coupled with Thelma's own admissions, correctly found that it was a mere contract to sell.
According to the CA:
During trial, Thelma explained the apparent disparity between the two (2) "deeds of absolute sale" by
testifying that the undated and unnotarized deed of sale served only as a "receipt" which was signed by
Neri when the latter received the downpayment for the lot. The dated and notarized deed of sale, on the
other hand, was signed by both Thelma and Neri upon Thelma's alleged full payment of the purchase
price.
Second, the execution of the "deed of absolute sale" dated August 10, 1997 and the transfer and
delivery of the title to Thelma's name covering Lot No. 398-A were conditioned upon full payment of
the purchase price.
Thelma testified that the "deed of absolute sale" dated August 10, 1997 and which was attached to
Thelma's complaint in Civil Case No. 7664 was signed by her, Neri and their witnesses only upon full
payment of the purchase price. Thelma further testified that she and Neri agreed to place the amount of
the purchase price on the deed of absolute sale only at the time when Thelma had fully paid the same.
Despite the denomination of their agreement as one of sale, the circumstances tend to show that Neri
agreed to sell the subject property to Thelma on the condition that title and ownership would pass or be
transferred upon the full payment of the purchase price. This is the very nature of a contract to sell, which is a
"bilateral contract whereby the prospective seller, while expressly reserving the ownership of the property despite
delivery thereof to the prospective buyer, binds himself to sell the property exclusively to the prospective buyer
upon fulfillment of the condition agreed upon, i.e., the full payment of the purchase price."
It was likewise established that Thelma was not able to pay the full purchase price, and that she was only
able to pay ₱442,293.50 of the agreed selling price of ₱l,243,000.00. The RTC, in fact, made the following
findings: (1) the consideration for Lot 398-A was ₱l,243,000.00; (2) Thelma issued a check on March 20, 1997 for
said amount, payable to Neri; (3) the agreement was that the check would only be held by Neri for safekeeping as it
was yet unsure if there was ample funds to cover the check; (4) the check was not covered by sufficient funds when
presented for payment, so Thelma subsequently paid Neri in installments starting from March 20, 1997 to
September 4, 1997; and (5) Neri acknowledged receipt from Thelma the total amount of ₱442,293.50.40
To bolster her claim, Thelma insists that she now holds title over the subject property after Neri allegedly
delivered the subject lot to her right after the execution of the sale. There is, however, nothing on record to support
this claim aside from her bare assertions. There was no testimony or any proof on her [Thelma] part showing
when and how she took possession of the property. At best, what is extant from the records is that Thelma paid
taxes on the property for the years 2000 and 2001, which was three years after the alleged sale. "But tax
declarations, by themselves, are not conclusive evidence of ownership of real property." Aside from this, the
tax receipts showed that the property was still declared in the name of Neri.
Having failed to pay the purchase price in full, Thelma cannot claim ownership over Lot 398-A and Neri is not
legally proscribed from alienating the same lot to other buyers.
On the Property not being Conjugal

Finally, while the CA correctly ruled that the agreement was a contract to sell, the Court, however, does not
share its position that the subject property is a conjugal property, and as such, the absence of Violeta's
consent should be held as among the factors which could have adversely affected the validity of the purported
contract of sale between Neri and Thelma. This is due to the following reasons: first, the subject property, Lot
398-A, is registered in the name of "Neri delos Reyes, married to Violeta Lacuata," and so was its mother lot, Lot
398. In Metropolitan Bank and Trust Company v. Tan, it was held that such form of registration is determinative of
the property's nature as paraphemal. That the only import of the title is that Neri is the owner of the subject
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property, it being registered in his name alone, and that he is married to Violeta; and second, the record is
bereft of proof that said property was acquired during Neri and Violeta's marriage - such that, the presumption
under Article 116 of the Family Code that properties acquired during the marriage are presumed to be conjugal
cannot apply.
[RSPol Note: The SC ruled that Thelma has no right over Lot 398-A not because the sale was void there being
no consent from Neri’s wife during the sale because the property is actually not conjugal but is solely owned by Neri.
The phrase “married to” only shows personal circumstance or status of Neri. Because the property is not conjugal,
the sale did not need his (Neri’s) wife’s consent. More importantly, Thelma has no right over the property because
the sale was under a contract to sell and she failed to pay the full price which was the condition for Neri to deliver
the property and transfer ownership.]
Melencion vs CA
Facts
The subject property is a 30,351 square meter parcel of land (subject property) particularly denominated as
Lot No. 3368, located at Suba-basbas, Marigondon, Lapu-Lapu City, Cebu, and part of a total area of 30,777
square meters covered by Transfer Certificate of Title (TCT) No. 206264 (entire property) in the name of the late
petitioner Go Kim Chuan (Go Kim Chuan).
The entire property was originally owned by Esteban Bonghanoy who had only one child, Juana
Bonghanoy-Amodia, mother of the late Leoncia Amodia and petitioners Cecilia Amodia Vda. de Melencion,
Veneranda Amodia, Felipe Amodia, and Eutiquio Amodia (the Amodias). The entire property was brought under the
operation of the Torrens System. However, the title thereto was lost during the Second World War.
[RSPol Note: Esteban Bonghanoy (grandpa) -> Juana Bonghanoy-Amodia (mom) -> Leoncia Amodia and
Petitioners (grandchildren)]
On July 10, 1964, the Amodias allegedly executed an Extra-Judicial Partition of Real Estate with Deed of
Absolute Sale whereby they extra-judicially settled the estate of Esteban Bonghanoy and conveyed the subject
property to respondent Aznar Brothers Realty Company (AZNAR) for a consideration of ₱10,200.00. On
August 10, 1964, the said Extra-Judicial Partition of Real Estate with Deed of Absolute Sale was registered under
Act 3344 as there was no title on file at the Register of Deeds of Lapu-Lapu City (Register of Deeds). Thereafter,
AZNAR made some improvements and constructed a beach house thereon.
On February 18, 1989, petitioners Cecilia Amodia Vda. de Melencion, Veneranda Amodia, Felipe Amodia
and Eutiquio Amodia (petitioners Amodias) executed a Deed of Extra-Judicial Settlement with Absolute Sale,
conveying the subject property in favor of Go Kim Chuan for and in consideration of ₱70,000.00. The lost title
covering the subject property was reconstituted pursuant to Republic Act (RA) No. 26. A reconstituted title
particularly designated as Original Certificate of Title (OCT) No. RO-2899 was issued in the name of Esteban
Bonghanoy and, subsequently, a derivative title (TCT No. 20626) was issued in the name of Go Kim Chuan on
December 1, 1989. Thereafter, Go Kim Chuan exercised control and dominion over the subject property in an
adverse and continuous manner and in the concept of an owner.
[RSPol Note: On July 10, 1964, the petitioners sold the lot to AZNAR but the sale was only registered under
Act 3344. On Feb 18, 1989, the petitioners sold the same lot to Go Kim when the title was reconstituted and
subsequently registered in the name of Go Kim who had a material possession over the property.]
On February 14, 1990, AZNAR wrote a letter to petitioners Amodias asking the latter to withdraw and/or
nullify the sale entered into between them and Go Kim Chuan. On the same date, a Notice of Adverse Claim
was annotated by AZNAR on TCT No. 20626. Because petitioners did not heed AZNAR's demand, on April 25,
1990, AZNAR filed a case against petitioners Amodias and Go Kim Chuan for Annulment of Sale and
Cancellation of TCT No. 20626 alleging that the sale to Go Kim Chuan was an invalid second sale of the
subject property which had earlier been sold to it. Petitioners Amodias denied that they executed the
Extra-Judicial Partition of Real Estate with Deed of Absolute Sale in favor of AZNAR, claiming that their
purported signatures thereon were forged. Trial on the merits ensued.
RTC Ruling
On February 18, 1993, the RTC dismissed AZNAR's complaint and declared Go Kim Chuan as the real
owner of the subject property.
CA Ruling
The CA rendered a Decision holding that the Extra-Judicial Partition of Real Estate with Deed of Absolute
Sale executed by the Amodias in favor of AZNAR was registered ahead of the Deed of Extra-Judicial Settlement
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with Absolute Sale in favor of Go Kim Chuan, thus, pursuant to Article 1544 of the New Civil Code, the former
deed should be given preference over the latter.
Issue
Who between Go Kim Chuan and AZNAR has the better right over the subject property?
SC Ruling
Pending appeal, the Heirs of Go Kim Chuan, through counsel, claimed that petitioners Amodias were
excluded from the Amended Petition because they can no longer be located despite diligent efforts exerted by
counsel. The counsel claims that after the rendition of the assailed CA Decision, he sent several letters to petitioners
Amodias but they did not reply; hence, the Heirs of Go Kim Chuan, left with no choice, filed the instant case before
this Court on their own.
On Forgery
Forgery cannot be presumed. It must be proved by clear, positive and convincing evidence and the
burden of proof rests on the party alleging forgery. Handwriting experts are usually helpful in the examination of
forged documents because of the technical procedure involved in analyzing them. But resort to these experts is not
mandatory or indispensable. A finding of forgery does not depend entirely on the testimonies of handwriting
experts, because the judge must conduct an independent examination of the questioned signature in order to
arrive at a reasonable conclusion as to its authenticity.
While it is true that the original document was produced before the RTC, the finding of forgery relies wholly
on the testimony of the document examiner. It falls short of the required independent examination to be
conducted by the trial court judge. Other than the statement of the document examiner, the RTC decision contains no
other basis to support its conclusion of the existence of forgery. Accordingly, the CA was correct in rejecting the
RTC’s finding and in applying the doctrine laid down in the case of Heirs of Severa Gregorio v. CA.
[RSPol Note: Although there was a document examiner of the Philippine Constabulary (PC) Crime Laboratory
who found the document to be forged, the RTC judge did not personally examine the document which duty is
indispensable. Because forgery was not proven and the RTC judge never had an independent examination on the
document, there is no support to the finding of forgery by the RTC. ]
On Double Sale
We have already ruled that the registration contemplated in this provision refers to registration under
the Torrens System, which considers the act of registration as the operative act that gives validity to the transfer or
creates a lien upon the land. This rule precisely applies to cases involving conflicting rights over registered property
and those of innocent transferees who relied on the clean title of the properties. Thus, we held that registration
must be done in the proper registry in order to bind the same.
In the case at bench, it is uncontroverted that the subject property was under the operation of the Torrens
System even before the respective conveyances to AZNAR and Go Kim Chuan were made. AZNAR knew of this,
and admits this as fact. Yet, despite this knowledge, AZNAR registered the sale in its favor under Act 3344 on
the contention that at the time of sale, there was no title on file. We are not persuaded by such a lame excuse.
Act 3344 provides for the system of recording of transactions or claims over unregistered real estate
without prejudice to a third party with a better right. But if the land is registered under the Land Registration
Act (and therefore has a Torrens Title), and it is sold and the sale is registered not under the Land Registration Act
but under Act 3344, as amended, such sale is not considered registered, as the term is used under Art. 1544 of the
New Civil Code.
In this case, since the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale in favor of
AZNAR was registered under Act No. 3344 and not under Act No. 496, the said document is deemed not
registered. Rather, it was the sale in favor of Go Kim Chuan which was registered under Act No. 496.
On Good Faith
Although it is obvious that Go Kim Chuan registered the sale in his favor under Act 496 while AZNAR did not,
we still cannot make an outright award of the subject property to the petitioners solely on that basis. For the law is
clear: mere registration of title is not enough. Good faith must accompany the registration.
As pointed out by petitioners and as admitted by AZNAR, the Notice of Adverse Claim was annotated on
TCT No. 20626 only on February 4, 1990, after the lost certificate of title was reconstituted and after the
issuance of said TCT in the name of Go Kim Chuan on December 1, 1989. It is, therefore, absurd to say that Go
Kim Chuan should be bound by an adverse claim which was not previously annotated on the lost title or on the new
one, or be shackled by a claim which he did not have any knowledge of.
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Citing Santiago v. Court of Appeals, AZNAR contends that even if the adverse claim was annotated on TCT
No. 20626 only on February 4, 1990, the prior registration of the sale in its favor under Act 3344 served as
constructive notice to Go Kim Chuan and thus negates the latter's claim of good faith, since the Court held in that
case, "Registration, however, by the first buyer under Act 3344 can have the effect of constructive notice to the
second buyer that can defeat his right as such buyer in good faith."
AZNAR's reliance on Santiago is misplaced. In Santiago, the first buyers registered the sale under the
Torrens System, as can be inferred from the issuance of the TCT in their names. There was no registration
under Act 3344. Conversely, in the instant case, AZNAR registered the sale in its favor under Act 3344 despite its
full knowledge that the subject property is under the operation of the Torrens System. To repeat, there can be no
constructive notice to the second buyer through registration under Act 3344 if the property is registered under the
Torrens system.
Moreover, before buying the subject property, Go Kim Chuan made verifications with the Office of the
City Assessor of Lapu-Lapu City and the Register of Deeds. He likewise visited the premises of the subject
property and found that nobody interposed any adverse claim against the Amodias. After he decided to buy the
subject property, he paid all taxes in arrears, caused the publication of the Deed of Extra-Judicial Settlement
with Absolute Sale in a newspaper of general circulation, caused the reconstitution of the lost certificate of title
and caused the issuance of the assailed TCT in his name. Given these antecedents, good faith on the part of Go
Kim Chuan cannot be doubted.
We also note that AZNAR's complaint for cancellation of title contains no allegation that the (second)
purchaser was aware of defects in his title. In the absence of such an allegation and proof of bad faith, it would be
grossly inappropriate for this Court to render judgment against the purchaser who had already acquired title not only
because of lack of evidence, but also because of the indefeasibility and conclusiveness of such title.
Finally, it is worth stressing that the Torrens system was adopted in this country because it was believed
to be the most effective measure to guarantee the integrity of land titles and to insure their indefeasibility
once the claim of ownership is established and recognized. If a person purchases a piece of land on the assurance
that the seller's title thereto is valid, he should not run the risk of losing his acquisition. If this were permitted, public
confidence in the system would be eroded and land transactions would have to be attended by complicated and not
necessarily conclusive investigations and proof of ownership.

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