2017 Ltd Reviewer Atty Gimarino Edited

University of San Carlos Notes and Case Updates in Land Titles and Deeds By: Professor Emmanuel Gimarino

I.

Definition of Terms

(LTCP) Land Titling Computerization Project - To ensure the integrity of the land tiling registration system through a paperless system securing through tighter controls over land titles and eliminating fraudulent ones, all titles are encoded and converted to digital format through a security-tested document imaging technology. 1. Land Registration System – a judicial or administrative proceeding whereby a person’s claim of ownership over a particular land is determined and confirmed or recognized so that such land and the ownership thereof may be recorded in a public registry. o Purpose of Registration: . . .[t]o quiet title to land; to put a stop forever to any question of the legality of the title, except claims which were noted at the time of registration, in the certificate, or which may arise subsequent thereto. Once a title is registered, the owner may rest secure, without the necessity of waiting in the portals of the court, or sitting in the “mirador de su casa”, to avoid the possibility of losing his land. (Legarda vs. Saleeby G.R. 8936) 2. Title in fee simple – such title in real property as belongs to a person who has full and unconditional ownership in fact. Analogous to absolute title. Registered and Unregistered Lands are the same as Titled and Untitled Lands. 3. Torrens title – a government certificate made out on a prescribed judicial form and issued under the signature of the register of deeds certifying that the person named is the absolute owner of the property described therein without limitations excepting those noted thereon and those prescribed by law. o vis-à-vis Ownership Ownership signifies proprietorship, dominion or exclusive control. It is a complete title. Whereas Title refers to the evidence of a person’s right or the extent of his interests. o

vis-à-vis Deeds

It is a writing containing some contract or agreement, and the evidence of its execution; particularly an instrument conveying real estate to a purchaser or donee. 4. Original Certificate of Title – the first title issued in the name of the registered owner by the Register of Deeds covering a parcel of land which had been registered under the Torrens System by virtue of judicial or administrative proceedings. 5. Transfer Certificate of Title – the title issued by the Register of Deeds in favor of a transferee to whom ownership of a registered land is transferred by virtue of a deed of conveyance. 6. Owner’s Duplicate Certificate of Title (Sec. 41, P.D. 1529) The owner’s duplicate certificate of title shall be delivered to the registered owner or to his duly authorized representative. If two or more persons are registered owners, one owner’s duplicate certificate may be issued for the whole land, or the co-owners may so desire, a separate duplicate may be issued to each of them in like form, but all outstanding certificates of title so issued shall be surrendered whenever the Register of Deeds shall register a subsequent voluntary transaction affecting the whole land or part thereof or any interest therein. The Register of Deeds shall note on each certificate of title a statement as to whom a copy thereof was issued.

The Register of Deeds shall issue an exact duplicate of the Original as well as the Transfer Certificate of Title. The original is filed in the Registry of Deeds and the duplicate is delivered to the owner.

7. Transfer Certificate of Title (Sec. 43, P.D. 1529) ”, and likewise be issued in duplicate. The certificate shall show the number of the next previous certificate covering the same land and also the fact that it was originally registered, giving the record number, the number of the

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original certificate of title, and the volume and page of the registration book in which the latter is found. Two Ways of Dealing with Lands: Voluntary Transactions and Involuntary Transactions. “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. In involuntary registration, such as an attachment, levy upon execution, lis pendens and the like, entry thereof in the day book is a sufficient notice to all persons of such adverse claim. ... (Development Bank of the Phils. Vs. Acting Register of Deeds of Nueva Ecija, UDK No. 7671, June 23, 1988)

II.

Significant Codal Provisions under the Property Registration Decree

Sec. 3 - Status of other pre-existing land registration system. The system of registration under the Spanish Mortgage Law is hereby discontinued and all lands recorded under said system, which are not yet covered by Torrens title shall be considered as unregistered lands. All instruments affecting lands originally registered under the Spanish Mortgage Law may be recorded under Sec. 113 of this Decree, until the land shall be brought under the Torrens system. Sec. 10 – General functions of Register of Deeds. The office of the Register of Deeds constitutes a public repository of records of instrument affecting registered or unregistered lands and chattel mortgages in the province or city wherein such office is situated. (Ministerial Function of RD) It shall be the duty of the Register of Deeds to immediately register an instrument presented for registration dealing with real or personal property which complies with all the requisites for registration. He shall see to it that said instrument bears the proper documentary and science stamps and that the

same are properly cancelled. If the instrument is not registrable, he shall forthwith deny registration thereof and inform the presentor of such denial in writing, stating the ground or reason therefore, and advising him of his right to appeal by consulta in accordance with Section 117 of this Decree. Sec. 31 - Decree of Registration. The decree of registration shall bind the land and quiet title thereto, subject only to such exceptions or liens as may be provided by law. It shall be conclusive upon and against all persons, including the National Government and all branches thereof, whether mentioned by name in the application or notice, the same being included in the general description, “To all whom it may concern”. Sec. 32 (2008 BAR) - Review of Decree of Registration; Innocent Purchaser for Value. The decree of registration shall not be reopened or revised by reason of absence, minority or other disability of any person adversely affected thereby, nor by any proceeding in any court for reversing judgments. This is subject to the [r]ight of any person, including the government and the branches thereof, deprived of land or of any estate or interest therein by such adjudication or confirmation of title obtained by actual fraud, to file in the proper CFI a petition for reopening and review of the decree of registration not later than one year from and after the date of the entry of such decree of registration, but in no case shall such petition be entertained by the court where an innocent purchaser for value has acquired the land or an interest therein, whose rights may be prejudiced. An “innocent purchaser for value” is deemed to include an innocent lessee, mortgagee, or other encumbrancer for value. Upon the expiration of the one year period, the decree of registration and the certificate of title issued shall become incontrovertible. Any person aggrieved by such decree of registration in any case may pursue his remedy by action for damages against the applicant or any other persons responsible for the fraud. Sec. 47 (1998 BAR) - Registered land not subject to prescription. No title to registered land in derogation of the title of the registered owner shall be acquired by prescription or

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adverse possession. EXCEPT those noted in said certificate and any of the following encumbrances which may be subsisting, namely: First. Liens, claims or rights arising or existing under the laws and Constitution of the Philippines which are not by law required to appear of record in the Registry of Deeds in order to be valid against subsequent purchasers or encumbrancers of record. Second. Unpaid real estate taxes levied and assessed within two years immediately preceding the acquisition of any right over the land by an innocent purchaser for value, without prejudice to the right of the government to collect taxes payable before that period from the delinquent taxpayer alone. Third. Any public highway or private way established or recognized by law, or any government irrigation canal or lateral thereof have been determined. Fourth. Any disposition of the property or limitation on the use thereof by virtue of, or pursuant to P.D. 27 or any other law or regulations on agrarian reform.

or entered in the office of the Register of Deeds for the province or city where the land to which it relates lies, be constructive notice to all persons from the time of such registering, filing or entering.

Sec. 48 (2005 BAR) - Certificate not subject to collateral attack. A certificate of title shall not be subject to collateral attack. It cannot be altered, modified, cancelled except in a direct proceeding in accordance with law.

Sec. 59 - Carry over of encumbrances. If, at the time of any transfer, subsisting encumbrances or annotations appear in the registration book, they shall be carried over and stated in the new certificate or certificates; except so far as they may be simultaneously released or discharged.

Sec. 50 – Subdivision and Consolidation Plans. xxx The Register of Deeds shall annotate on the new certificate of title covering the street, passageway or open space, a memorandum to the effect that except by way of donation in favor of the national government, province, city or municipality, no portion of any street, passageway, waterway or open space so delineated on the plan shall be closed or otherwise disposed of by the registered owner without the approval of the Court of First Instance of the province or city in which the land is situated. . . Sec. 51 - Conveyance and other dealing by registered owner. The act of registration shall be the operative act to convey or affect the land insofar as third persons are concerned, and in all cases under this Decree, the registration shall be made in the office of the Register of Deeds for the province or city where the land lies. Sec. 52 - Constructive notice upon registration. Every conveyance, mortgage, lease, lien, attachment, order, judgment, instrument or entry affecting registered land shall, if registered, filed

Sec. 53 - Presentation of owner’s duplicate upon entry of new certificate. xxx After the entry of the decree of registration on the original petition or application, any subsequent registration procured by the presentation of a forged duplicate certificate of title, or a forged deed or other instrument, shall be null and void. Sec. 56 (1998 BAR) - Primary Entry Books; fees; certified copies. xxx [a]ll instruments and including copies of writs and processes filed xxx relating to registered land xxx 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.

Sec. 70 (1998 BAR) – Adverse Claim. Whoever claims any part or interest in registered land adverse to the registered owner, arising subsequent to the date of the original registration, may, if no other provision is made in this Decree for registering the same, make a statement in writing setting forth fully alleged right or interest, or how or under whom acquired, a reference to the number of the certificate of title of the registered owner, the name of the registered owner, and a description of the land in which the right or interest is claimed. The statement shall be signed and sworn to, and shall state the adverse claimant’s residence, and a place at which all notices may be served upon him. This statement shall be entitled to registration as an adverse claim on the certificate of title. The adverse claim shall be effective for a period of 30 days from the date of registration. After the lapse of said period, the annotation of adverse claim may be cancelled upon filing of a verified petition therefor by the party in interest. Provided, however, that after cancellation, no second adverse claim based on

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the same ground shall be registered by the same claimant. Before the lapse of 30 days, any party in interest may file a petition in the CFI where the land is situated for the cancellation of the adverse claim, and the court shall grant a speedy hearing upon the question of the validity of such adverse claim, and shall render judgment as may be just and equitable. xxx Sec. 76 (2001, 2002 BAR) – Notice of Lis Pendens. No action to recover possession of real estate, or to quiet title thereto, or to remove clouds upon the title thereof or for partition, or other proceedings of any kind in court directly affecting the title to land or the use or occupation thereof or the buildings thereon, and no judgment, and no proceeding to vacate or reverse any judgment, shall have any effect upon registered land as against persons other than the parties thereto, unless a memorandum or notice stating the institution of such action or proceeding and the court wherein the same is pending, as well as the date of the institution thereof, together with a reference to the number of the certificate of title, and an adequate description of the land affected and the registered owner thereof, shall have been filed and registered. Sec. 95 - Action for compensation from funds. A person who, without negligence on his part, sustains loss or damage, or is deprived of land or any estate or interest therein in consequence of the bringing of the land under the operation of the Torrens system or arising after original registration of land, through fraud or in consequence of any error, omission, mistake or misdescription in any certificate of title and who by the provisions of this Decree is barred or otherwise precluded under the provision of any law from bringing an action in any court of competent jurisdiction for the recovery of damages to be paid out of the Assurance Fund. Sec. 103 - Certificates of Title Pursuant to Patents. xxx The deed, grant, patent or instrument of conveyance from the Government to the grantee shall not take effect as a conveyance or bind the land but shall operate only as a contract between the Government and the grantee and as evidence of authority to the Register of Deeds to make registration. It is the act of registration that shall be the operative act

to affect and convey the land xxx Sec. 107 - Surrender of Witheld Duplicate Certificates. Where it is necessary to issue a new certificate pursuant to any involuntary instrument which divests the title of the registered owner against his consent or where a voluntary instrument cannot be registered by reason of the refusal or failure of the holder to surrender the owner’s duplicate certificate of title, the party in interest may file a petition in court to compel surrender of the same to the RD. The court, after hearing, may order the registered owner or any person withholding the duplicate certificate to surrender the same, and direct the entry of a new certificate or memorandum upon such surrender. If the person withholding the duplicate certificate is not amenable to the process of the court, or if for any reason the outstanding owner’s duplicate certificate cannot be delivered, the court may order the annulment of the same as well as the issuance of a new certificate of title in lieu thereof. xxx Sec. 108 (1998 BAR) Amendment and Alteration of Certificates. No erasure, alteration, or amendment shall be made upon the registration book after the entry of a certificate of title or a memorandum thereon and the attestation of the same by Register of Deeds, EXCEPT by order of the CFI. A registered owner or other person having an interest in registered property or, in proper cases, the Register of Deeds with the approval of the Commissioner of Land Registration, may apply by petition to the court upon the ground that the registered interests of any description, whether vested, contingent, expectant or inchoate appearing on the certificate, have terminated and ceased; or that new interest not appearing upon the certificate have arisen or been created; or that an omission or error was made in entering a certificate or any memorandum thereon, or, on any duplicate certificate; or that the same or any person on the certificate has been changed; or that the registered owner has married, or, if registered as married, that the marriage has been terminated and no right or interest of heirs or creditors will thereby be affected; or that a corporation which owned registered land and has been dissolved has not conveyed the same within three years after its dissolution; or upon any other reasonable ground; and the court may hear and determine

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the petition after notice to all parties in interest, and may order the entry or cancellation of a new certificate, the entry or cancellation of a memorandum upon a certificate, or grant any other relief upon such terms and conditions requiring security or bond if necessary, as it may consider proper; Provided however, that this section shall not be construed to give the court authority to reopen the judgment or decree of registration and that nothing shall be done or ordered by the court which shall impair the title or other interest of a purchaser holding a certificate for value and in good faith, or his heirs and assigns, without his or their written consent. Sec. 109 - Notice and Replacement of Lost Duplicate Certificate. In case of loss or theft of an owner’s duplicate certificate of title, due notice under oath shall be sent by the owner or by someone in his behalf to the Register of Deeds of the province or city where the land lies as soon as the loss or theft is discovered. If a duplicate certificate is lost or destroyed, or cannot be produced by a person applying for the entry of a new certificate to him or for the registration of any instrument, a sworn statement of the fact of such loss or destruction may be filed by the registered owner or other person in interest. Sec. 117 - Procedure (Consultas). When the Register of Deeds is in doubt with regard to the proper step to be taken or memorandum to be made on pursuance of any deed, mortgage or other instrument presented to him for registration, or where any party in interest does not agree with the action taken by the Register of Deeds with reference to any such instrument, the question shall be submitted to the Commissioner of Land Registration by the Register of Deeds, or by the party in interest thru the Register of Deeds. Sec. 110 – Reconstitution of lost or destroyed original of Torrens title. Original copies of certificates of title lost or destroyed in the offices of Register of Deeds as well as liens and encumbrances affecting the lands covered by such titles shall be reconstituted judicially in accordance with the procedure prescribed in Republic Act No. 26 (An Act Providing a Special Procedure for the Reconstitution of Torrens Certificates of Titles Lost or Destroyed) insofar as not inconsistent with this Decree. The procedure relative to administrative reconstitution of lost or destroyed certificate

prescribed in said Act is hereby abrogated. Notice of all hearings of the petition for judicial reconstitution shall be given to the Register of Deeds of the place where the land is situated and to the Commissioner of Land Registration. No order or judgment ordering the reconstitution of a certificate of title shall become final until the lapse of thirty days from receipt by the Register of Deeds and by the Commissioner of Land Registration of a notice of such order or judgment without any appeal having been filed by any of such officials. o

See R.A. 6732 (July 17, 1989) An Act Allowing Administrative Reconstitution of Original Copies of Certificates of Titles Lost or Destroyed Due to Fire, Flood and Other Force Majeure, Amending Section 110 of P.D. No. 1529 and Sec. 5 of R.A. No. 26

I. GENERAL PROVISIONS (a)

Governing Laws

P.D. 1529 (Property Registration Decree) approved on June 11, 1978, codified and incorporated the following laws related to property registration:     

Act 496, Land Registration Act C.A. 141, Public Land Act Act 2259, Cadastral Act Act 1508, as amended, Chattel Mortgage Law R.A. No. 26, Reconstitution of Original Certificates of Title  P.D. No. 27, Emancipation Patents, Land Reform Law  P.D. 957, Subdivision and Condominium Protective Buyers’ Decree  R.A. No. 4726, Condominium Act

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of the inalienable public domain. (See Constitutional Basis (1987) - Art. XII, Sec.2)

2007 BAR Bedrock Land & Property Development Corp. is a development company engaged in developing and selling subdivisions, condominium units and industrial estates. In order to replenish its inventories, it embarked on an aggressive land banking program. It employed “scouts” who roam all over the Philippines to look for and conduct investigations on prospective sites for acquisition and development, whether developed, semi-developed, or raw land. The management of Bedrock asks you as the company counsel to prepare a manual containing a summary of the pertinent laws and regulations relating to land registration and acquisition of title to land. The manual should include the following items: Supply this information. (a)

What is the governing law?

Depending on the transaction involved, one or more of the following will be the governing laws relating to land registration and acquisition of title to land are as follows: 1. P.D. No. 1529 (Property Registration Decree) 2. C.A. No. 141, as amended (Public Land Law) 3. Civil Code of the Philippines 4. Act No. 2259 (The Cadastral Act) 5. Sec. 194, Administrative Code as amended by Act No. 2837 and Act No. 3344 (System of Recording for Unregistered Real Estate) 6. P.D. No. 1073 (Extending the Period for Administrative and Judicial Legalization of Imperfect Title) 7. Art. XII of the 1987 Constitution 8. P.D. No. 957 (An Act Regulating the Sale of Subdivisions and Condominiums) 9. R.A. 4276 (An Act Amending P.D. No. 957 Real Property Tax Code

(b)

Concept of Jure Regalia

All lands not otherwise appearing to be clearly within private ownership are presumed to belong to the State, and unless it has been shown that they have been reclassified as alienable or disposable to a private person, they remain part

EXCEPTION: NATIVE TITLE to land, or private ownership of land by Filipinos by virtue of possession under a claim of ownership since time immemorial, and independent of any grant from the Spanish Crown – “It might, perhaps, be proper and sufficient to say that when, as far back as testimony or memory goes, the land has been held by individuals under a claim of private ownership, it will be presumed to have been held in the same way from before the Spanish conquest, and never to have been public land.” (Cruz vs. Secretary of Environment and Natural Resources, G.R. No. 135385, Dec. 6, 2000 citing Cariño vs. Insular Government) (c)

Torrens System of Registration

Registration does not vest title. It is merely a procedure to establish evidence of title over realty. The Torrens system is a system for the registration of title to land only, and not a system established for the acquisition of land. Registration merely confirms and thereafter protects the title already possessed by the owner, making it imprescriptible by occupation of third parties. The registration does not give the owner any better title than he has. He does not obtain title by virtue of the certificate. He secures his certificate by virtue of the fact that he has a fee simple title. (Legarda vs. Saleeby, 31 Phil 590) Registration under the Torrens system does not create nor vest title if title was based on a forged deed. (Heirs of Rosa Dumaliang vs. Serban 516 SCRA 343) The system merely confirms ownership and does not create it. Certainly, it cannot be used to divest the lawful owner of his title for the purpose of transferring it to another who has not acquired it by any of the modes allowed or recognized by law. It cannot be used to protect a usurper from the true owner, nor can it be used as a shield for the commission of fraud; neither does it permit one to enrich himself at the expense of another. Where such an illegal transfer is made, as in the case at bar, the law presumes that no registration has been made and so retains title in the real owner of the land. (Heirs of Doronio vs. Heirs of Doronio, G.R. No. 169454, Dec. 27, 2007)

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ILLUSTRATIVE CASE: Estate of Gonzales et.al. vs. Heirs of Perez November 5, 2009 A parcel of land was registered under the name of the municipality and subdivided into Lots A, B and C. Occupying Lots A and C were Gibo and Noynoy and their respective families. The Municipal Council passed a resolution authorizing the sale thru public bidding of Lots A and C wherein Gibo emerged as the highest bidder. Thus, the Municipality executed a Deed of Absolute Sale in his favor. Pursuant to the Administrative Code, the Deed was forwarded to the Provincial Governor for approval. However, the latter did not act upon said Deed. Gibo allowed Noynoy and his family to continue occupying Lot C. Subsequently, he sold Lot C to Noynoy, as embodied in a Deed of Absolute Sale, which was however not notarized. At such time when both Gibo and Noynoy were already deceased, the municipality, thru its Mayor, executed a Deed of Absolute Transfer over Lots A and C in favor of the Estate of Gibo. Consequently, TCTs were issued over both lots in the name of Gibo’s estate. On the other hand, the heirs of Noynoy executed a Deed of Extrajudicial Partition over Lot C. As a result, new titles were also issued. The heirs of Noynoy demanded from the heirs of Gibo for the reconveyance of Lot C. The latter heirs however resisted contending that the prior Deed of Sale executed by Gibo in favor of Noynoy was not valid as Gibo was not yet the owner thereof. It was only when a TCT was issued covering Lot C, by virtue of the Deed of Absolute Transfer, that Gibo became the owner thereof. DECISION: The heirs of Gibo are not correct. The ownership of a thing sold is acquired by the vendee from the moment it is delivered to him. A thing sold shall be understood as delivered when it is placed in the control and possession of the vendee. In this case, Gibo took control and possession of Lot C immediately after his bid was accepted by the Municipal Government. In fact, Gibo permitted Noynoy and his family to stay thereon. This only shows that upon perfection of the contract of sale between the Municipality and Gibo, the latter acquired

ownership of the subject property by means of delivery of the same to him. The absence of approval by the Provincial Governor of the said Contract of Sale does not per se make it null and void. Such contract is only considered voidable and is valid and binding, effective and obligatory between the parties, before it is set aside. In the present case, since the contract was never annulled or set aside, it has the effect of transferring ownership of subject property to Gibo. The latter therefore had the full capacity to transfer ownership to Noynoy.

The failure on the part of the administrative authorities to do their part in the issuance of the decree of registration cannot oust the prevailing party from ownership of the land. The ultimate goal of our land registration system is geared towards the final and definitive determination of real ownership in the country, and the imposition of an additional burden on the owner after the judgment in the land registration case had attained finality would simply frustrate such goal. (Republic vs. Nillas, Jan, 23, 2007)

II. ORIGINAL REGISTRATION

(a) Who May Apply? (2008 BAR) (OPRA) (1) Those who by themselves or thru their predecessors-in-interest have been in Open, continuous, exclusive and notorious possession and occupation of alienable and disposable lands of the public domain under a bona fide claim of ownership since June 12, 1945, or earlier. (2) Those who have acquired ownership of private lands by Prescription under the provisions of existing laws. (3) Those who have acquired ownership of private lands or abandoned river beds by Right of accession or accretion under the existing laws, (4) Those who have acquired ownership of land in Any other manner provided for by law. (Sec. 14, P.D. 1529)

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On the basis of their capacity to acquire or hold lands of the public domain, who may acquire private lands?

2009 BAR In 1972, Luciano de la Cruz sold to Chua Chung Chun, a Chinese citizen, a parcel of land in Binondo. Chua died in 1990, leaving behind his wife and three children, one of whom, Julian, is a naturalized Filipino citizen. Six years after Chua’s death, the heirs executed an extrajudicial settlement of estate, and the parcel of land was allocated to Julian. In 2007, Luciano filed suit to recover the land he sold to Chua, alleging that the sale was void because it contravened the Constitution which prohibits the sale of private lands to aliens. Julian moved to dismiss the suit on grounds of pari delicto, laches and acquisitive prescription. Decide the case with reasons.

(1) Filipino citizens (2) Filipino corporations and associations as defined in Section 2, Article XII of the Constitution; and by exception: (3) Aliens, but only by hereditary succession; and (4) A natural-born citizen of the Philippines who has lost his citizenship under the terms of Section 8. ** Filipino citizens can both “acquire” or otherwise “hold” lands of the public domain. Filipino corporations cannot acquire lands of the public domain by they can “hold” such lands by modes other than acquisition, such as “lease”.

The petition of Luciano must be dismissed. Independently of the doctrine of pari delicto, the petitioner cannot have the sale annulled and recover the lot Luciano himself has sold. While the vendee was an alien at the time of the sale, the land has since become the property, of respondent Julian, a naturalized Philippine citizen, who is constitutionally qualified to own. As such the defect is already cured.

Re: Acquisition of Lands by Aliens

GENERAL RULE: Aliens are not qualified to own lands

Constitutional Basis: Art. XII, Section 7 Save in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain.

Laches also militates against petitioner's cause. Luciano sold the disputed lot in 1972 and instituted the action to annul the sale only in the year 2007. By his long inaction of inexcusable neglect, he should be held barred from asserting his claim to the litigated property. Respondent, therefore, must be declared to be the rightful owner of the property. (De Castro vs. Teng Queen Tan, G.R. No. L31956, April 30, 1984)

EXCEPTIONS 1.

Art. XII, Sec. 7 of the 1987 Constitution: Hereditary Succession

2. P.D. 713 (American Parity Rights – May 27, 1975): The Law allowing Americans who were

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formerly Filipino Citizens, Americans who became Permanent Residents of the Philippines, and Americans who have resided in the Philippines continuously for at least twenty years and who in good faith had acquired private residential lands for family dwelling purposes in the Philipppines prior to July 3, 1974, to continue holding such lands and transfer ownership over the same to qualified persons or entities 3. B.P. 185 - An Act to Implement Sec. 15 of Art. XIV of the Constitution and for Other Purposes (March 16, 1982): Any natural-born citizen of the Philippines who has lost his Philippine citizenship and who has the legal capacity to enter into a contract under Philippine laws may be a transferee of a private land up to a maximum area of one thousand square meters, in the case of urban land, or one hectare in the case of rural land, to be used by him as his residence. 4. R.A. 8179 – An Act to Further Liberalize Foreign Investments, Amending for the Purpose R.A. No. 7042 (Foreign Investments Act), and for other purposes SEC. 5. The Foreign Investment Act is further amended by inserting a new section designated as Section 10 to read as follows: SEC. 10. Other Rights of natural Born Citizen Pursuant to the Provisions of Article XII, Section 8 of the Constitution. - Any natural born citizen who has lost his Philippine citizenship and who has the legal capacity to enter into a contract under Philippine Laws may be a transferee of a private land up to maximum area of five thousand (5,000) square meters in the case of urban land or three (3) hectares in the case of rural land to be used by him for business or other purposes. In the case of married couples, one of them may avail of the privilege herein granted: Provided, That If both shall avail of the same, the total are acquired shall not exceed the maximum herein fixed. In case the transferee already owns urban or rural land for business or other purposes, he shall be entitled to be a transferee of additional urban or rural land for business or other purposes which when added to those already owned by him shall not exceed the maximum areas herein authorized.

A transferee under this Act may acquire not more than two (2) lots which should be situated in different municipalities or cities anywhere in the Philippines: Provided, That the Total land area thereof shall not exceed five thousand (5,000) square meters in the case of urban land or three (3) hectares in the case of rural land for use by him for business or other purposes. A transferee who has already acquired urban land shall be disqualified form acquiring rural land and vice versa. 5. R.A. No. 9225 – Citizenship Retention and Re-acquisition Act of 2003 (Aug. 29, 2003) Those who retain or re-acquire Philippine citizenship under this Act shall enjoy full civil and political rights. . . 6. P.D. No. 471 (May 24, 1974) – Fixing a Maximum Period for the Duration of Leases of Private Lands to Aliens Section 1. The maximum period allowable for the duration of leases of private lands to aliens or alien-owned corporations, associations, or entities not qualified to acquire private lands in the Philippines shall be twenty-five years, renewable for another period of twenty-five years upon mutual agreement of both lessor and lessee.

2003 BAR In 1970, Spouses dela Cruz, the Filipinos, bought a parcel of unregistered land in the Philippines, on which they built a house which became their residence. In 1986, they migrated to Canada and became Canadian citizens. Thereafter, in 1990, they applied, opposed by the Republic, for the registration of the aforesaid land in their names. Should the application of the spouses be granted over the Republic’s opposition? Yes, the application should be granted. As a rule, the Constitution prohibits aliens from owning private lands in the Philippines. This rule, however, does not apply to the spouses Juan and Juana dela Cruz because at the time they acquired ownership over the land, albeit imperfect, they were still Filipino citizens. The application for registration is a mere confirmation of the imperfect title which the spouses have already acquired before they became Canadian citizens. (Republic vs. CA, 235 SCRA 9 567)

2008 BAR Ong vs. Republic, 3/12/2008, G.R. 175746 The law speaks of possession and occupation. Since these words are separated by the conjunction “and”, the clear intention of the law is not to make one synonymous with the other. Possession is broader than occupation because it includes constructive possession. When, therefore, the law adds the word “occupation”, it seeks to delimit the all encompassing effect of constructive possession. Taken together with the words Open, Continuous, Exclusive and Notorious (OCEN), the word occupation serves to highlight the fact that for an applicant to qualify, his possession must not be a mere fiction. Feliciano vs. Zaldivar September 26, 2006 Respondents’ claim that they had been occupying the subject lot since 1947 openly, publicly, adversely and continuously or for over 41 years is unavailing. In a long line of cases, the Court has consistently ruled that lands covered by a title cannot be acquired by prescription or adverse possession. A claim of acquisitive prescription is baseless when the land involved is a registered land. 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. Vda. de Villanueva vs. Court of Appeals 351 SCRA 12 The owner of the land registered under the Torrens system cannot lose it by prescription.

(Prescription) Anthony bought a piece of untitled agricultural land from Bert. Bert, in turn, acquired the property by forging Carlo’s signature in a deed of sale over the property. Carlo had been in possession of the property for 8 years, declared it for tax purposes, and religiously paid all taxes due on the property. Anthony is not aware of the defect in Bert’s title, but has not been in actual physical possession of the property from the time he bought it from Bert, who had never been in possession. Anthony has since then been in possession of the property for one year. Can Anthony acquire ownership of the property by acquisitive prescription? How many more years does he have to possess it to acquire ownership? Yes, Anthony can acquire ownership of the property thru acquisitive prescription. In the present case, Anthony is a buyer/possessor in good faith because he was not aware of the defect on Bert’s title. As such, Anthony can acquire ownership and other real rights over immovable property through open, continuous possession of ten years. Anthony needs nine years of possession in addition to his one year of possession in good faith. (Accretion) The properties of Jessica and Jenny, who are neighbors, lie along the banks of Marikina River. At certain times of the year, the river would swell and as the water recedes, soil, rocks and other materials are deposited on Jessica’s and Jenny’s properties. This pattern of the river swelling, receding and depositing soil and other materials being deposited on the neighbor’s properties have gone on for many years. Knowing this pattern, Jessica constructed a concrete barrier about 2 meters from her property line and extending towards the river, so that when the water recedes, soil and other materials are trapped within this barrier. After several years, the area between Jessica’s property line to the concrete barrier was completely filled with soil, effectively increasing Jessica’s property by 2 meters. Jenny’s

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property, where no barrier was constructed, also increased by one meter along the side of the river.

Re: Disqualification of private corporations or associations from acquiring alienable lands of the public domain

If Jessica’s and Jenny’s properties are registered, will the benefit of such registration extend to the increased of their properties?

Article XII, Sec. 3 of the 1987 Constitution: xxx Private corporations or associations may not hold such alienable lands of the public domain except by lease, for a period not exceeding twenty-five years, renewable for not more than twenty-five years, and not to exceed one thousand hectares in area. Citizens of the Philippines may lease not more than five hundred hectares, or acquire not more than twelve hectares thereof, by purchase, homestead, or grant.

If the properties of Jessica and Jenny are registered, the benefit of such registration does not extend to the increased area of their properties. Accretion does not automatically become registered land because there is a specific technical description of the lot in its Torrens title. There must be a separate application for registration of the alluvial deposits under the Torrens system. (Grande vs. CA, G.R. L-17652)

(b)

Judicial Confirmation of Imperfect Title or Incomplete Title (Sec. 48[b] of the Public Land Act) (Sec. 14[1] of P.D. No. 1529)

P.D. 1529 [Registered Lands] versus C.A. 141 [Unregistered Lands]: Under P.D. 1529, there already exists a title which the court need only confirm while the Public Land Act [C.A. 141] works under the presumption that the land applied for still pertains to the State, and the occupants and possessors merely claim an interest in the land by virtue of their imperfect title or continuous, open and notorious possession thereof. (Limcoma Multipurpose Cooperative vs. Republic 527 SCRA 233) Requisites for an Application for Registration under this Rule (1) The applicant must be a Filipino citizen (2) He must have, by himself or through his predecessors-in-interest, possessed and occupied an alienable and disposable agricultural portion of the public domain; (3) Such possession and occupation must have been open, continuous, exclusive, notorious and in the concept of owner, since June 12, 1945; and (4) The application must be filed with the proper court.

Director of Lands vs. Intermediate Appellate Court and Acme Plywood and Veneer Co. G.R. No. 73002 Where at the time the corporation acquired the land, its predecessors-in-interest had been in possession and occupation thereof in the manner and for the period prescribed by law as to entitle him to registration in his name, then the proscription against corporations acquiring alienable lands of the public domain except through lease does not apply for the land was no longer public land but private property. Canete vs. Genuino Ice Comp., 542 SCRA 206, 1/22/2008 One who acquires land under the Friar Lands Act, as well as his successors-in-interest may not claim successional rights to purchase by reason of occupation from the time immemorial, as this contravenes the historical fact that friar lands were bought by the Government of the Philippine Islands, pursuant to Act of Congress of the United States, approved on July 1, 1902, not from the individual persons but from certain companies, a society and a religious order.

Reckoning time when land has been declared as alienable and disposable for purposes of complying with Sec. 48[b] of the Public Land Act

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Did the enactment of the Property Registration Decree and the amendatory P.D. No. 1073 preclude the application for registration of alienable lands of the public domain, possession over which commenced only after June 12, 1945? No. Even if the possession of alienable lands of the public domain commenced only after 12 June 1945, application for registration of said property is still possible by virtue of Section 14 (2) of the Property Registration Decree which speaks of prescription. . . . It is well-settled that properties classified as alienable and disposable land may be converted into private property by reason of open, continuous and exclusive possession of at least 30 years. Such property now falls within the contemplation of “private lands” under Section 14(2), over which title by prescription can be acquired. Hence, because of Section 14(2) of P.D. 1529, those who are in possession of alienable and disposable land, and whose possession has been characterized as open, continuous and exclusive for 30 years or more, may have the right to register their title to such land despite the fact that their possession of the land commenced only after 12 June 1945. (Buenaventura vs. Republic 517 SCRA 271; Limcoma Multipurpose Cooperative vs. Republic 527 SCRA 233)

Republic vs. Naguit January 17, 2005 The more reasonable interpretation of Section 14(1) is that it merely requires the property sought to be registered as already alienable and disposable at the time the application for registration of title is filed. If the State, at the time the application is made, has not yet deemed it proper to release the property for alienation or disposition, the presumption is that the government is still reserving the right to utilize the property; hence, the need to preserve its ownership in the State irrespective of the length of adverse possession even if in good faith. However, if the property has already been classified as alienable and disposable, as it is in this case, then there is already an intention on the part of the State to abdicate its exclusive prerogative over the property.

Republic vs. Herbieto May 26, 2005 Sec. 48(b) of the Public Land Act, as amended, now requires adverse possession of the land since 12 June 1945 or earlier. In the present Petition, the subject lots became alienable and disposable only on 25 June 1963. Espiritu, Jr. v. Republic G.R. No.. 219070, June 21, 2017 In Heirs of Mario Malabanan v. Republic of the Philippines, 33 the Court explained that when Section 14 (2) of P.D. No. 1529 provides that persons "who have acquired ownership over private lands by prescription under the provisions of existing laws," it unmistakably refers to the Civil Code as a valid basis for the registration of lands. For registration under this provision to prosper, the applicant must establish the following requisites: (a) the land is an alienable and disposable, and patrimonial property of the public domain; (b) the applicant and its predecessors-in-interest have been in possession of the land for at least 10 years, in good faith and with just title, or for at least 30 years, regardless of good faith or just title; and (c) the land had already been converted to or declared as patrimonial property of the State at the beginning of the said 10-year or 30-year period of possession. As regards the first and most important requisite, the Court has ruled that declaration of alienability and disposability is not enough for the registration of land under Section 14 (2) of P.D. No. 1529. There must be an express declaration that the public dominion property is no longer intended for public service or the development of the national wealth or that the property has been converted into patrimonial property. This is only logical because acquisitive prescription could only run against private properties, which include patrimonial properties of the State, but never against public properties. Republic vs. Court of Appeals and Heirs of Carag G.R. 155450, August 6, 2008 When the land registration court issued a decision for the issuance of a decree which was

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the basis of an original certificate of title to the land, the court had already made a determination that the land was agricultural and that the applicant had proven that he was in open and exclusive possession of the subject land for the prescribed number of years. However, Section 8 provides that lands which are already private lands, as well as lands on which a private claim may be made under any law, are not covered by the classification requirement in Section 8 for purposes of disposition. This exclusion in Section 8 recognizes that during the Spanish regime, Crown lands were per se alienable unless falling under timber or mineral zones, or otherwise reserved for some public purpose in accordance with law. Clearly, with respect to lands excluded from the classification requirement in Section 8, trial courts had jurisdiction to adjudicate these lands to private parties. Petitioner has not alleged that the disputed portion had not become private property prior to the enactment of Act No. 2874. Neither has petitioner alleged that the disputed portion was not land on which a private right may be claimed under any existing law at that time. Leonardo-De Castro vs. Mayor Jose Yap G.R. No. 167707, Oct. 8, 2008 Except for lands already covered by existing titles, Boracay was an unclassified land of the public domain prior to Proclamation No. 1064. Such unclassified lands are considered public forest under P.D. No. 705. If we accept the position of private claimants, the Philippine Bill of 1902 and Act No. 926 would have automatically made all lands in the Philippines, except those already classified as timber or mineral land, alienable and disposable lands. That would take these lands out of State ownership and worse, would be utterly inconsistent with and totally repugnant to the long-entrenched Regalian doctrine.

timber or mineral land; any title issued covering non-disposable lots even in the hands of an alleged innocent purchaser for value shall be cancelled. Republic v. Espinosa G..R. No. 186603, April 5, 2017 The Regalian doctrine is well-enshrined not only in the present Constitution, but also in the 1935 and 1973 Constitutions. The Court has always recognized and upheld the Regalian doctrine as the basic foundation of the State's property regime. Nevertheless, in applying this doctrine, we must not lose sight of the fact that in every claim or right by the Government against one of its citizens, the paramount considerations of fairness and due process must be observed. Respondent in this case failed to show that the subject lot is part of timberland or forest reserve it adverted to. In the face of the uncontroverted status of Free Patent No. 473408 and OCT No.. 0-6667 as valid and regular issuances, respondent's insistence on the classification of the lot as part of the forest reserve must be rejected. The rules of admissibility must be applied uniformly. The same rule holds true when the Government is one of the parties. The Government, when it comes to court to litigate with one of its citizens, must submit to the rules of procedure and its rights and privileges at every stage of the proceedings are substantially in every respect the same as those of its citizens; it cannot have a superior advantage. This is so because when a [sovereign] submits itself to the jurisdiction of the court and participates therein, its claims and rights are justiciable by every other principle and rule applicable to the claims and rights of the private parties under similar circumstances. Failure to abide by the rules on admissibility renders the L.C. Map submitted by respondent inadmissible as proof to show that the subject lot is part of the forest reserve.

2007 BAR Question Non-Registrable Properties Land Bank of the Philippines vs. Republic, 543 SCRA 453 Feb. 4, 2008; A certificate of title is void when it covers property of public domain classified as forest or

Bedrock Land & Property Development Corp. is a development company engaged in developing and selling subdivisions, condominium units and industrial estates. In order to replenish its inventories, it embarked on an aggressive land banking

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program. It employed “scouts” who roam all over the Philippines to look for and conduct investigations on prospective sites for acquisition and development, whether developed, semi-developed, or raw land. The management of Bedrock asks you as the company counsel to prepare a manual containing a summary of the pertinent laws and regulations relating to land registration and acquisition of title to land. The manual should include the following items: Supply this information. (b) What properties are not registrable? With respect to land banking program of Bedrock, the following properties may not be registered under the Torrens System with any Register of Deeds: (a) inalienable lands of the public domain; and (b) those prohibited under the Constitution (such as national parks, mineral lands, forest or timber lands and agricultural lands not classified as alienable and disposable).

Take note of the distinction of the two Chavez cases. Both involved the sale of reclaimed lands to private corporations. In the first Chavez case, the sale was nullified while in the latter Chavez case, the sale was upheld Chavez vs. Public Estates Authority July 9, 2002

The reclaimed lands being sold or leased by PEA are not private lands, in the same manner that DENR, when it disposes of private lands but alienable lands of the public domain. Only when qualified private parties acquire these lands will the lands become private lands. In the hands of the government agency tasked and authorized to dispose of alienable lands of the public domain, these lands are still public, not private lands. Chavez vs. National Housing Authority August 15, 2007 NHA is a government agency not tasked to dispose of public lands under its charter—The Revised Administrative Code of 1987. The NHA is an “end-user agency” authorized by law to administer and dispose of reclaimed lands. The moment titles over reclaimed lands based on the special patents are transferred to the NHA by the Register of Deeds, they are automatically converted to patrimonial properties of the State which can be sold to Filipino citizens and private corporations, 60% of which are owned by Filipinos. The reason is obvious: if the reclaimed land is not converted to patrimonial land once transferred to NHA, then it would be useless to transfer it to the NHA since it cannot legally transfer or alienate lands of public domain. More importantly, it cannot attain its avowed purposes and goals since it can only transfer patrimonial lands to qualified beneficiaries and prospective buyers to raise funds for the SMDRP.

The ownership of lands reclaimed from foreshore and submerged areas is rooted in the Regalian doctrine which holds that the State owns all lands and waters of the public domain. . . . Foreshore lands became inalienable as natural resources of the State, unless reclaimed by the government and classified as agricultural lands of the public domain. . . These lands remained sui generis, as the only alienable or disposable lands of the public domain the government could not sell to private parties.

From the foregoing considerations, we find that the 79-hectare reclaimed land has been declared alienable and disposable land of the public domain; and in the hands of NHA, it has been reclassified as patrimonial property.

Since then and until now, the only way the government can sell to private parties government reclaimed lands of the public domain is for the legislature to pass a law authorizing such sale.

The Executive Department, thru the President, has the exclusive prerogative to classify or reclassify public lands into alienable or disposable, mineral or forest. Since 1919, courts no longer had the authority, whether express or implied, to determine the classification of lands of the public domain.

xxx

Certificate of Alienability DENR Secretary vs. Yap, G.R. 167707, 10/8/2008

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Republic vs. Mendoza, 519 SCRA 203 It cannot be gainsaid that the prerogative of classifying public lands pertains to administrative agencies which have been specially tasked by statues to do so and that the courts will not interfere on matters which are addressed to the sound discretion of government and/or quasijudicial agencies entrusted with the regulation of activities coming under their special technical knowledge and training. It should be stressed that the function of administering and disposing of lands of the public domain in the manner prescribed by law is not entrusted to the courts but to executive officials. And as such, courts should refrain from looking into the underlying reasons or grounds which impelled the classification and declaration . . . and its subsequent release as alienable and disposable land. Republic vs. Sarmiento, 418 SCRA 250, 3/13/2007 Reliance on the notation of surveyor-geodetic engineer that “this survey is inside the alienable and disposable area” to prove that the lot is alienable is insufficient and does not constitute controvertible evidence to overcome the presumption that it remains part of the inalienable public domain. Xxx Reliance on the notation of surveyor-geodetic engineer that “this survey is inside the alienable and disposable area” to prove that the lot is alienable is insufficient and does not constitute controvertible evidence to overcome the presumption that it remains part of the inalienable public domain.

(c)

Ordinary Registration Proceedings

Publication; Opposition; Default Heirs of Regalado vs, Republic 516 SCRA 38 If what is sought to be registered are sublots of a bigger lot, the publication must contain the technical descriptions of the smaller lots since

the adjoining owners of the mother lot are not the adjoining owners of the smaller lots.

Specific Evidence of Ownership Recto vs. Republic 440 SCRA 79 The belated declaration of the lot for tax purposes does not necessarily mean that possession by the previous owners thereof did not commence in 1945 or earlier. As long as the testimony supporting possession for the required period is credible, the court will grant the petition for registration. xxx A duly certified blue print copy of the tracing cloth with the technical description is sufficient compliance and the submission of the survey plan on tracing cloth may be dispensed with. Azana vs. Lumbo 518 SCRA 707 Non-declaration of property for tax purposes does not necessarily negate ownership. Republic vs. Barandiaran 538 SCRA 1 It is settled that tax receipts and declarations of ownership for tax purposes are not incontrovertible evidence of ownership; they only become evidence of ownership acquired by prescription when accompanied by proof of actual possession of the property. Republic vs, Sta, Ana Burgos 523 SCRA 309; Buenaventura vs. Republic 517 SCRA 271 As a rule, tax declarations or realty tax payments of property are not conclusive evidence of ownership, nevertheless, they are good indicia of possession in the concept of owner, for no one in his right mind would be paying taxes for a property that is not in his actual or constructive possession. They constitute at least proof that the holder has a claim of title over the property. The voluntary declaration of a piece of property for taxation purposes manifests not only one’s sincere and honest desire to obtain title to the property and announces his adverse claim against the State

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and all other interested parties, but also the intention to contribute needed revenues to the Government. Such an act strengthens one’s bona fide claim of acquisition of ownership.

Hearing; Judgment; Decree of Registration Republic vs, San Lorenzo 513 SCRA 294 The duty and the power to set the hearing date lie with the land registration court. After an applicant has filed his application, the law requires the issuance of a court order setting the initial hearing date. The notice of initial hearing is a court document. The notice of initial hearing is a court document. The notice of initial hearing is signed by the judge and copy of the notice is mailed by the clerk of court to the LRA. This involves a process to which the party applicant absolutely has no participation. x x x Respondent should not be faulted if the initial hearing that was conducted on September 23, 1995 was outside the 90-day period set forth under Sec. 23 of P.D. 1529, and (b) that respondent might have substantially complied with the requirement thereunder relating to the registration of the subject land.

When an adjacent owner did not appear in the hearing of the application for registration of land due to actual or extrinsic fraud by the applicant, and a decision granting a portion of the adjacent owner’s land to the applicant became final, what are the adjacent owner’s remedies? A: As the case involves actual and extrinsic fraud, his remedy is a petition for relief under Rule 38, provided that no decree has yet been issued by the Land Registration Authority. If a Decree has been issued, the remedy would be a petition for review under Sec. 32 of P.D. 1529. The requisites for a petition for review are: (a) a person/owner is deprived of ownership of a land; (b) deprivation is through extrinsic fraud; (c) that the petition for review is filed within one year from the issuance of the decree of registration and; (d) there is no innocent purchaser for value. If one year has elapsed, then an action for reconveyance is the proper remedy. The requisites for an action for reconveyance are: (a) a person/owner is deprived of ownership of a land; (b) deprivation is through extrinsic fraud; and (c) there is no innocent purchaser for value.

Factor vs. Mariel, Jr. G.R. 161037, 2/4/2008 A writ of possession may be issued only pursuant to a decree of registration in original land registration proceedings not only against the person who has been defeated in a registration case but also against anyone adversely occupying the land or any portion thereof during the proceedings up to the issuance of the decree.

Republic vs. Nillas 512 SCRA 286, 1/23/2007 The peculiar procedure provided in the Property Registration Law from the time decisions in land registration case became final is complete in itself and does not need to be filled in – the judgment does not have to be executed by motion or enforced by action within the purview of Rule 39 of the 1997 Rules of Civil Procedure. Ting vs. Heirs of Lirio 518 SCRA 336

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There is no provision in the Land Registration Act xxx regarding the execution of a judgment in a civil action, except the proceedings to place the winner in possession by virtue of a writ of possession. The decision in a land registration case, unless the adverse or losing party is in possession, becomes final without any further action, upon the expiration of the period for perfecting an appeal. xxx [t]he provision in the Rules of Court to the effect that judgment may be enforced within 5 years by motion, and after 5 years but within 10 years, by an action (Sec. 6, Rule 39) xxx refers to civil actions and is not applicable to special proceedings, such as a land registration case. This is so because a party in a civil action must immediately enforce a judgment that is secured as against the adverse party, and his failure to act to enforce the same within a reasonable time as provided in the Rules makes the decision unenforceable against the losing party. In special proceedings, the purpose is to establish a status, condition or fact; in land registration proceedings, the ownership by a person of a parcel of land is sought to be established. After the ownership has been proved and confirmed by judicial declaration, no further proceeding to enforce said ownership is necessary, except when the adverse or losing party had been in possession of the land and the winning party desires to oust him therefrom.

Manotok Realty, Inc. vs. CLT Realty Development. Corp. G.R. No. 123346, Dec. 14, 2007 Such jurisdiction is limited to the necessary correction of technical errors in the description of the lands, provided such corrections do not impair the substantial rights of the registered owner, and that such jurisdiction cannot operate to deprive a registered owner of his title. (Id. at 561) It was further clarified in Timbol v. Diaz (44 Phil 587 (1923)) that the limited jurisdiction of the cadastral court over such lands even extends to the determination of “which one of the several conflicting registered titles shall prevail[, as such] power would seem to be necessary for a complete settlement of the title to the land, the express purpose of cadastral proceedings, and must therefore be considered to be within the jurisdiction of the court in such proceedings.”

When an Original Certificate of Title takes effect The original certificate of title is issued on the date the decree of registration is transcribed. What stands as the certificate of title is the transcript of the decree or registration made by the registrar of deeds in the registry. (Manotok Realty vs. CLT Realty)

Entry of the Decree versus Entry of the Certificate of Title Heirs of Tama Tan Buto vs. Luy 528 SCRA 522 A previous final and executory judgment awarding the lot in favor of a party bars the losing party from later filing an application for registration of title covering the same lot. Jurisdiction of Cadastral Courts The power to dispose of the lands placed under the administration of the Philippine Homesite and Housing Corporation [PHHC] is lodged in said body. There is no provision of law authorizing courts to review decisions of respondent PHHC and to take cognizance of actions to annul awards of sale of any other action made by it pursuant to the authority granted it by law, unless a prayer for nullification of title is in the Complaint.

Entry of the Decree is made by the chief clerk of the land registration and the entry of the certificate of title is made by the register of deeds. A certificate of title is issued in pursuance of the decree of registration. What is actually issued by the Register of Deeds is the certificate of title itself, not the decree of registration, as he is precisely the recipient from the land registration office of the decree for transcription to the certificate as well as the transcriber no less. It is only after the transcription of the decree by the register of deeds that the certificate of title is to take effect. Situation: Given that what is acknowledged as the authentic OCT No. 994 indicates that it was received for transcription by the Register of Deeds on 3 May 1917, it is that date that is the date of registration since that was when he was able to transcribe the decree in the registration book. (Manotok Realty Inc. vs. CLT Realty)

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III. CERTIFICATE OF TITLE

Key Concepts of the Torrens System

(a)

Best Evidence of Ownership

A Torrens Certificate of Title is the best evidence of ownership of the land described therein. (Lee Tek Sheng vs. CA 292 SCRA 544)

(b)

Constructive Notice

A Torrens title binds the whole world. (People vs. Reyes 175 SCRA 597) The issuance of a torrens certificate of title is constructive notice to the whole world that the person in whose name it is issued has become the owner of the lot described therein. (Borbe vs. Calalo 535 SCRA 89) No one can plead ignorance of the registration. (Jacob vs. CA 224 SCRA 189) (c)

Curtain Principle Unregistered Claims

A Torrens title bars all prior claims not registered on the title. (Republic vs. Umali 171 SCRA 647) All claims and liens of whatever character existing against the land prior to the issuance of certificate of title are barred, if not noted on said certificate. (Id.) The registered owner of a Torrens Certificate of Title and the subsequent purchaser for value and in good faith of registered land shall hold the certificate, free from all liens and encumbrances, except those noted in said certificate and those specified by law. (Secs. 44 and 46, P.D. 1529) (d)

Indefeasibility

A Torrens certificate of title serves as evidence of an indefeasible title to the property in favor of the person whose name appears therein. (Ortegas vs. Hidalgo 198 SCRA 635)

Title to the property covered by a Torrens certificate becomes incontrovertible or indefeasible after one year from the entry of the decree of registration. (Heirs of Santiago vs. Heirs of Santiago 404 SCRA 193) A certificate of title cannot be defeated by adverse, open and notorious possession by third persons. (D’Oro Land Realty & Dev’t Corp. vs. Claunan 516 SCRA 681) (e)

Imprescriptible

No title to registered land in derogation of the title of the registered owner shall be acquired by prescription or adverse possession. (Rivera vs. Court of Appeals 244 SCRA 218) The Spouses Supapo (as holders of the TCT) enjoy a panoply of benefits under the Torrens system. The most essential insofar as the present case is concerned is Section 47 of PD No. 1529 which states: Section 47. Registered land not subject to prescriptions. — No title to registered land in derogation of the title of the registered owner shall be acquired by prescription or adverse possession. In addition to the imprescriptibility, the person who holds a Torrens Title over a land is also entitled to the possession thereof. The right to possess and occupy the land is an attribute and a logical consequence of ownership. Corollary to this rule is the right of the holder of the Torrens Title to eject any person illegally occupying their property. Again, this right is imprescriptible. In Bishop v. CA, we held that even if it be supposed that the holders of the Torrens Title were aware of the other persons' occupation of the property, regardless of the length of that possession, the lawful owners have a right to demand the return of their property at any time as long as the possession was unauthorized or merely tolerated, if at all. (Supapo v. Spouses De Jesus, G.R. No. 198356, [April 20, 2015]) (f) Integrity of Titles Insurance Principle Every person dealing with registered land may safely rely on the correctness of the certificate of title issued therefore and the law will in no way oblige him to go behind the certificate to

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determine the condition of the property. Stated differently, an innocent purchaser for value, relying on a Torrens title issued, is protected. (Nazareno vs. Court of Appeals 343 SCRA 637)

of registered title over the transfer of a vendor bereft of any transmissible rights. (Torres vs. Court of Appeals 186 SCRA 672) (k)

(g) Not Subject to Collateral Attack A certificate of title shall not be the subject to collateral attack. It cannot be altered, modified or cancelled, except in a direct proceeding in accordance with law. (Vda. de Retuerto vs. Barz 372 SCRA 712)

(h)

Fraudulent Registration

The Torrens system was not designed to shield and protect one who had committed fraud or misrepresentation and thus holds title in bad faith. (Walstrom vs. Mapa, Jr. 181 SCRA 431)

A Torrens title is presumed to have been issued regularly and legally, unless contradicted and overcomed by clear, convincing, strong and irrefutable proof. More than merely preponderant evidence is required. (Ramos vs. Rodriguez 244 SCRA 418) (l)

The person in whose name the land is fraudulently registered holds it as a mere trustee, with the legal obligation to reconvey the property and the title thereto in favor of the true owner. (Caro vs. CA 180 SCRA 401) (i)

Forgery

A fraudulent or forged document of sale may become the root of a valid title if the certificate of title has already been transferred from the name of the true owner to the name of the forger or the name indicated by the forger. (Reyes vs. Borbon 50 Phil. 791) The doctrine that a forged instrument may become the root of a valid title cannot be applied where the owner still holds a valid and existing certificate of title covering the same interest in a realty. (Torres vs. CA 186 SCRA 672)

Double Titles

Where two certificates of title include the same land, the certificate of title that is earlier in date prevails. (Garcia vs. CA 95 SCRA 380) (m)

The Torrens system only protects a title holder in good faith and cannot be used as shield for fraud and chicanery. (Philippine Commercial & Industrial Bank vs. Villalva 48 SCRA 31)

Presumption: Regular and Valid

Priority of Rights

“Prior tempura potior jure”. He who is first in time is preferred in right. (Santiago vs. CA 186 SCRA 672) (n)

Reliance on the Title Mirror Principle (1999, 2005 BAR)

. . .[u]nder the Torrens System of Registration, the minimum requirement for one to be a good faith buyer for value is that the vendee at least sees the owner's duplicate copy of the title and relies upon the same. The private respondent, presumably knowledgeable on the aforesaid workings of the Torrens System, did not take heed of this and nevertheless went through with the sale with undue haste. The unexplained eagerness of INC to buy this valuable piece of land in Quezon City without even being presented with the owner's copy of the titles casts very serious doubt on the rightfulness of its position as vendee in the transaction. (Islamic Directorate of the Phils. vs. Court of Appeals, G.R. No. 117897, May 14, 1997)

As between two innocent persons, the one who made it possible for the wrong to be done should be the one to bear the resulting loss. (Traders Royal Bank vs. CA 315 SCRA 190)

An innocent purchaser for value has every right to rely on the correctness of the title. He is not required to explore further than what the Torrens title on its face indicates, in quest for any hidden defect or inchoate right that may subsequently defeat his right thereto. (Nazareno vs. Court of Appeals 343 SCRA 637).

As between two persons, both of whom are in good faith and both innocent of any negligence, the law must protect and prefer the lawful holder

When a person deals with registered land through someone who is not the registered owner, he is expected to look behind the

(j)

Loss

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certificate of title and examine all the factual circumstances, in order to determine if the vendor has the capacity to transfer of any interest in the land. (Chua vs. Soriano 521 SCRA 68, 4/13/2007) EXCEPTION: This principle does not apply when the party has actual knowledge of facts and circumstances that would impel a reasonably cautious man to make such inquiry or when the purchaser has knowledge of a defect or the lack of title in his vendor or of sufficient facts to induce a reasonably prudent man to inquire into the status of the title of the property in litigation. One who falls within the exception can neither be denominated an innocent purchaser for value nor a purchaser in good faith. (Domingo vs. Roces 401 SCRA 197)

Under the Torrens system of land registration, the registered owner of realty cannot be deprived of her property through fraud, unless a transferee acquires the property as an innocent purchaser for value. A transferee who acquires the property covered by a reissued owner's copy of the certificate of title without taking the ordinary precautions of honest persons in doing business and examining the records of the proper Registry of Deeds, or who fails to pay the full market value of the property is not considered an innocent purchaser for value. (Spouses Cusi v. Domingo, G.R. No. 195825, 195871, [February 27, 2013], 705 PHIL 255273)

(o)

the prayer for the declaration of its nullity is a collateral attack on a certificate of title is not allowed. Vda. de Recinto vs. Inciong 77 SCRA 196 The mere possession of a certificate of title under the Torrens system does not necessarily make the possessor a true owner of all the property described therein for he does not by virtue of said certificate alone become the owner of the land illegally included. It is evident from the records that the petitioner owns the portion in question and therefore the area should be conveyed to her. The remedy of the land owner whose property has been wrongfully or erroneously registered in another’s name is, after one year from the date of the decree, not to set aside the decree, but, respecting the decree as incontrovertible and no longer open to review, to bring an ordinary action in the ordinary court of justice for reconveyance or, if the property has passed into the hands of an innocent purchaser for value, for damages.

Remedies Available to the Losing Party in a Registration Case (1) (2) (3)

Motion for New Trial or Reconsideration under Rule 37 of the Rules of Court Petition for Relief from Judgment under Rule 38 of the Rules of Court Appeal to the Court of Appeals or the Supreme Court, in the same manner as in ordinary actions

Titles derived from a void title

If a certificate of title is void, all subsequent certificates of title derived therefrom are also void because of the truism that the “spring cannot rise higher than its source”. This truism is in accord with the Latin maxim “Nemo potest plus juris ad alium transferre quam ipse habet.” No one can transfer a greater right to another than he himself has. (Mathay vs. Court of Appeals 295 SCRA 556)

Remedies under the Property Registration Decree available to the aggrieved party in cases of fraudulent registration (1) Petition for review of Decree (Sec. 32) (2) Action for Reconveyance (Secs. 53 and 96) (3) Action for Damages (Section 32) (4) Claim against the Assurance Fund (Sec. 95)

IV. REMEDIES Other Remedies Available Tapuroc vs. Vda. de Mende 512 SCRA 97, 1/22/2007 Invoking the invalidity of an original certificate of title as an affirmative defense in an answer and

(1)

Action for cancellation or reversion instituted by the government through the Solicitor General (Sec. 101 of the Public Land Act)

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(2) (3)

Annulment of Judgment (Rule 47, Rules of Court) Criminal Prosecution under the RPC

2003 BAR Louie, before leaving the country to train as a chef in a five-star hotel in New York, USA, entrusted to his first—degree cousin Dewey an application for registration, under the Land Registration Act, of a parcel of land located in Bacolod City. A year later, Louie returned to the Philippines and discovered that Dewey registered the land and obtained an Original Certificate of Title over the property in his name. Compounding the matter, Dewey sold the land to Huey, an innocent purchaser for value. Louie promptly filed an action for reconveyance of the parcel of land against Huey. Is the action pursued by Louie the proper remedy? An action for reconveyance against Huey is not the proper remedy, because Huey is an innocent purchaser for value. The proper recourse is for Louie to go after Dewey for damages by reason of the fraudulent registration and subsequent sale of the land. If Dewey is insolvent, Louie may file a claim against the Assurance Fund. (Heirs of Lopez vs. De Castro 324 SCRA 591 [2000])

513 SCRA 315 When an original certificate of title is secured fraudulently and in breach of trust, a direct attack on the title is a petition for review of decree of registration.

Reconveyance

Heirs of Labanon vs. Heirs of Labanon 530 SCRA 97, 8/14/2007 P.D. 1529 does not totally deprive a party of any remedy to recover the property fraudulently registered in the name of another. It merely precludes the reopening of the registration proceedings for titles covered under the Torrens system, but does not foreclose other remedies for the reconveyance of the property to its rightful owner.

Heirs of Dumaliang vs. Serban 516 SCRA 343 The real owner has the right to sue for reconveyance (an action in personam) of a property. The action is imperscriptible if the land wrongfully registered is still in the name of the person who caused the registration.

Gasataya vs. Mabasa 2/16/ 2007

Petition for Review Heirs of Tama Tan Buto vs. Luy 528 SCRA 522 When the petition for review of decree is filed after the expiration of one (1) year from the issuance of the decree of registration, the certificate of title serves as evidence of an indefeasible title to the property in favor of the person whose name appears thereon. The certificate of title that was issued attained the status of indefeasibility one year after its issuance. The aggrieved party cannot defeat title previously issued by subsequently filing an application for registration. Ingusan vs. Heirs of Reyes

Reconveyance is available not only to the legal owner of a property but also to the person with a better right than the person under whose name said property was erroneously registered.

Antonio vs. Santos 538 SCRA 1 Note should be taken of the established doctrine that an action for reconveyance resulting from fraud prescribes four (4) years from the discovery of the fraud. Such discovery is deemed to have taken place upon the issuance of the certificate of title over the property. Registration of real property is considered constructive notice to all persons, thus, the fouryear period shall be counted therefrom. Pedrano vs. Heirs of Pedrano

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Dec. 4, 2007 An action for the reconveyance of a parcel of land based on implied or constructive trust, as we have already explained in this case, prescribes in 10 years, the point of reference being the date of registration of the deed or the date of the issuance of the certificate of title of the property; however, where no OCT has yet been issued despite an order from the court to title the lots, the date from whence the prescriptive period could be reckoned is unknown and it could not be determined if indeed the period had already lapsed or not. Reconciling the above-cases: . . . the action for reconveyance prescribes in four years involved causes of action all accruing prior to the effectivity of the new Civil Code. Before August 30, 1950, the old Code of Civil Procedure (Act No. 190) governed prescription. It provided in Section 43 thereof that civil actions other than for the recovery of real properly can only be brought within the following period after the right of action accrues: “Within four years: . . .An action for relief on the ground of fraud, but the right of action in such case shall not be deemed to have accrued until the discovery of the fraud.” In contrast, under the present Civil Code, just as an implied or constructive trust is an offspring of the law (Art. 1456, Civil Code), so is the corresponding obligation to reconvey the property and the title thereto in favor of the true owner. In this context, and vis-à-vis prescription, Article 1144 of the Civil Code is applicable, i.e., that an action upon an obligation created by law must be brought within ten years from the time the right of action accrues. (Amerol vs. Bagumbayan) Consequently – An action for reconveyance based on an implied or constructive trust must perforce prescribe in ten years and not otherwise. xxx It must be stressed, at this juncture, that Article 1144 and Article 1456, are new provisions. They have no counterparts in the old Civil Code or in the old Code of Civil Procedure, the latter being then resorted to as legal basis of the four-year prescriptive period for an action for reconveyance of title of real property acquired under false pretenses. (Sanjorjo vs. Quijano)

Heirs of Bituin vs. Caoleng, Sr. August 10, 2007

An action for reconveyance prescribes in ten years, the reckoning point of which is the date of registration of the deed or the date of issuance of the certificate of title over the property. If the person claiming to be the owner of the property is in actual possession thereof, the right is to seek reconveyance which in effect seeks to quiet title to the property, does not prescribe. Republic vs. Nillas 512 SCRA 286 If the plaintiff, as the real owner of the property, remains in possession of the property, the prescriptive period to recover title and possession of the property does not run against him – in such 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

Reversion Estate of the late Yujuico vs. Republic 537 SCRA 513 Effective 1 July 1997, any action for reversion of public land instituted by the Government was already covered by Rule 47 and the same should be filed with the Court of Appeals, not the Regional Trial Court. Actions of Reversion versus Actions for Declaration of Nullity of Free Patents and Certificates of Title The distinction between ordinary civil actions for declaration of nullity of free patents and certificates of title from actions of reversion lies in the allegation as to the character of ownership of the realty whose title is sought to be nullified. (Banguilian vs. Court of Appeals, 4/27/2007)

Laches D’Oro Land Realty & Development Corporation vs. Claunan 516 SCRA 681 A squatter has no right of possession that may be prejudiced by his eviction. Unless there are intervening rights of third persons which may be

22

affected or prejudiced by a decision ordering the return of lots to the registered owner, the equitable defense of laches will not apply as against the latter.

paid the corresponding registration fees. Under Sec. 56 of P.D. No. 1529, the Deed of Sale to Renren is considered registered from the time the sale was entered in the Primary Entry Book.

Although a registered owner may lose his right to recover possession of his registered property be reason of laches, the equitable defense is unavailing to one who has not shown any color of title to the property such as a squatter.

For all legal intents and purposes, Renren is considered the registered owner of the land. After all, it was not his fault that the Registry of Deeds could not issue the corresponding certificate of title.

Feliciano vs. Zaldivar September 26, 2006

Mikaelo’s defense of prescription cannot be sustained. A Torrens title is imprescriptible. No title to registered land in derogation of the title of the registered owner shall be acquired by prescription or adverse possession. (Sec. 47, P.D. 1529)

As registered owners of the lots in question, the private respondents have a right to eject any person illegally occupying their property. This right is imprescriptible. Even if it be supposed that they were aware of the petitioner’s occupation of the property, and regardless of the length of that possession, the lawful owners have a right to demand the return of their property at any time as long as the possession was unauthorized or merely tolerated, if at all. This right is never barred by laches. 1998 BAR In 1965, Renren brought from Robyn a parcel of registered land evidenced by a duly executed deed of sale. The owner presented the deed of sale and the owner’s certificate of title to the Register of Deeds. The entry was made in the day book and corresponding fees were paid as evidenced by official receipt. However, no transfer of certificate of title was issued to Renren because the original certificate of title in Robyn’s name was temporarily misplaced after fire partly gutted the Office of the Register of Deeds. Meanwhile, the land had been possessed by Robyn’s distant cousin, Mikaelo, openly, adversely and continuously in the concept of an owner since 1960. It was only in April 1998 that Renren sued Mikaelo to recover possession. Mikaelo invoked a.) acquisitive prescription and b.) laches, asking that he be declared owner of the land. Decide the case by evaluating these defenses. a.) Renren’s action to recover possession of the land will prosper. In 1965, after buying the land from Robyn, he submitted the Deed of Sale to the Registry of Deeds for registration together with the owner’s duplicate copy of the title and

The right to recover possession of registered land likewise does not prescribe because possession is just a necessary incident of ownership. b.) Mikaelo’s defense of laches, however, appears to be more sustainable. Renren bought the land and had the sale registered way back in 1965. From the facts, it appears that it was only in 1998 or after an inexplicable delay of 33 years that he took the first step asserting his right to the land. It was not even an action to recover ownership but only possession of the land. By ordinary standards, 33 years of neglect or inaction is too long and may be considered unreasonable. As often held by the Supreme Court, the principle of imprescriptibility sometimes has to yield to the equitable principle of laches, which can convert even a registered owner’s claim into a stale demand. Mikaelo’s claim of laches, however, is weak insofar as the element of equity is concerned, there being no showing in the facts how he entered into ownership and possession of the land.

V. SUBSEQUENT REGISTRATION (i.) Voluntary Dealings Registration Requirements (a)

Compliance with the requisites of a contract

essential

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(b) (c) (d)

Observapnce of the formal requirements of public instruments Performance of the jurisdictional requisites for registration In addition, special laws require the submission of supporting documents for certain transactions before registration is allowed

DBP vs. RD of Nueva Ecija 162 SCRA 450, Autocorp. Group vs. CA, Sept. 4, 2004 Entry alone produces the effect of registration. Ballesteros vs. Abion, Feb. 9, 2006 The Primary Entry of a Void Contract does not produce the effect of registration. Sps. Abrigo vs. de Vera, 6/21/2004

rejoins that her Torrens title covering the property is indefeasible and imprescriptible. Decide the case. Winda’s claim is not tenable. The rule of indefeasibility of a Torrens Title means that after one year from the date of issue of the decree of registration, or if the land has fallen into the hands of a purchaser for value, the title becomes incontestable and incontrovertible. Imprescriptibility, on the other hand, means that no title to the land in derogation of that of the registered owner may be acquired by adverse possession or acquisitive prescription or that the registered owner does not lose by extinctive prescription his right to recover ownership and possession of the land. The action in this case is for annulment of the sale executed by the husband over a conjugal partnership property covered by a Torrens title. Actions on contracts are subject to prescription.

Registration must be done in the proper registry in order to bind the land. Sale Santos vs. Lumbao, 519 SCRA 408

Types of Pricing Agreement (In Sales involving Real Estate)

The failure of a contracting party to have a document registered does not affect its validity and enforceability as between the contracting parties for registration serves chiefly to bind third persons not parties to a contract that a transaction involving the property has been entered into.

Unit Price Contract – purchase price is determined by way of reference to a stated rate per unit area

2002 BAR In 1948, Winda’s husband sold in favor of Verde Sports Center Corp. (Verde) a 10hectare property belonging to their conjugal partnership, without Winda’s knowledge, much less consent. In 1950, Winda learned of the sale, after her husband’s demise. Upon completion of the construction in 1952, she tried but failed to get the membership privileges in Verde. Winda now files a suit against Verde for the annulment of the sale on the ground that she did not consent to the sale. In answer, Verde contends that, in accordance with the Spanish Civil Code which was then in force, the sale did not need her concurrence. Verde contends that in any case, the action has prescribed or is barred by laches. Winda

Lump Sum Contract – full purchase price is stated for an immovable, the area of which may be declared based on an estimate or where both the area and boundaries are stated (Esguerra vs. Trinidad 518 SCRA 186 3/12/2007)

RE: Sales of Real Property

TO BE ENFORCEABLE: ART. 1358, NCC xxx [s]ales of real property or of an interest therein are governed by Articles 1403, No. 2 and 1405. Xxx Art. 1403 (2) – xxx In the following cases, an agreement hereafter made shall be unenforceable by action, unless the same, or some note or memorandum thereof be in writing, and subscribed by the party charged, or by his agent; evidence, therefore, of the agreement cannot be received without the

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writing, or a secondary evidence of its contents xxx

TO BE REGISTRABLE ART. 1358, NCC - The following must appear in a public document: (1) Acts and contract which have for their object the creation, transmission, modification or extinguishment of real rights over immovable property xxx SEC. 112, P.D. 1529 – Deeds, conveyances, encumbrances, discharges, powers of attorney and other voluntary instruments, whether affecting registered or unregistered land, executed in accordance with law in the form of public instruments shall be registrable: Provided, that, every such instrument shall be signed by the person or persons executing the same in the presence of at least two witnesses who shall likewise sign thereon, and shall be acknowledged to be the free act and edeed of the person or persons executing the same before a notary public or other public officer authorized by law to take acknowledgment. xxx

TO COMPEL PERFORMANCE ART. 1357, NCC – If the law requires a document or other special form, the contracting parties may compel each other to observe that form, once the contract has been perfected. This right may be exercised simultaneously with the action upon the contract.

MIRROR PRINCIPLE: Where there is nothing on the certificate of title to indicate cloud or vice in ownership or encumbrance, the purchaser is not required to explore further than the Torrens title.

Sy vs. Capistrano, Jr. G.R. No. 154450, July 28, 2008 Notable likewise is that the owner’s duplicate copy of TCT No. 76496 in the name of Capistrano had always been in his possession since he gave Scott only a photocopy thereof pursuant to the latter’s authority to look for a buyer of the property. On the other hand, the

Jamilars were able to acquire a new owner’s duplicate copy thereof by filing an affidavit of loss and a petition for the issuance of another owner’s duplicate copy of TCT No. 76496. The minimum requirement of a good faith buyer is that the vendee of the real property should at least see the owner’s duplicate copy of the title. A person who deals with registered land through someone who is not the registered owner is expected to look beyond the certificate of title and examine all the factual circumstances thereof in order to determine if the vendor has the capacity to transfer any interest in the land.

Caveat Emptor Principle: (How to conduct Due Diligence Verification of title) 1. Verify the origin, history, authenticity and validity of the title with the Register of Deeds and Land Registration Authority 2. Engage the services of a competent and reliable geodetic engineer to verify the boundary, metes and bounds of the lot subject of said title based on the technical description in the said title and the approved survey plan in the Land Management Bureau 3. Conduct an actual ocular inspection 4. Inquire from the owners and possessors of adjoining lots with respect to the true and legal ownership of the lot in question 5. Put up signs that said lot is being purchased, leased or encumbered 6. Undertake such other measures to make the general public aware that said lot will be subject to alienation, lease or encumbrance by the parties (Domingo Realty Inc. vs. Court of Appeals, Jan. 26, 2007) Domingo vs. Roces 401 SCRA 197 One who deals with property registered under the Torrens system need not go beyond the same, but only has to rely on the title. He is charged with notice only of such burdens and claims as are annotated on the title.

Buyer in Good Faith To prove good faith, a buyer of registered and titled land need only show that he relied on the face of the title to the property. He need not prove that he made further inquiry for he is not

25

obliged to explore beyond the four corners of the title. Such degree of proof of good faith, however, is sufficient only when the following conditions concur: first, the seller is the registered owner of the land; second, the latter is in possession thereof; and third, at the time of the sale, the buyer was not aware of any claim or interest of some other person in the property, or of any defect or restriction in the title of the seller or in his capacity to convey title to the property. (Gabutan v. Nacalaban, G.R. Nos. 185857-58 & 194314-15, [June 29, 2016]) 2008 BAR Juliet offered to sell her house and lot to Dehlma. Before agreeing to purchase the property, Dehlma went to the Register of Deeds to verify Juliet’s title. She discovered that while the property was registered in Juliet’s name under the Land Registration Act, as amended by P.D. No. 1529, it was mortgaged to Elaine to secure a debt of P=80,000.00. Wanting to buy the property, Dehlma told Juliet to redeem the property from Elaine, and gave her an advance payment to be used for purposes of releasing the mortgage on the property. When the mortgage was released, Juliet executed a Deed of Absolute Sale over the property which was duly registered with the Registry of Deeds, and a new TCT was issued in Dehlma’s name. Dehlma immediately took possession over the house and lot and the movables therein. Thereafter, Dehlma went to the Assessor’s Office to get a new tax declaration under her name. She was surprised to find out that the property was already declared for tax purposes in the name of XYZ Bank which had foreclosed the mortgage on the property before it was sold to her. XYZ Bank was also the purchaser in the foreclosure sale of the property. At that time, the property was still unregistered but XYZ Bank registered the Sheriff’s Deed of Conveyance in the day book of the Register of Deeds under Act 3344 and obtained a tax declaration in its name. Was Dehlma a purchaser in good faith? Yes, Dehlma is a purchaser in good faith. Before Dehlma brought the property, she went to the Register of Deeds to verify Juliet’s title. When she discovered that the property was mortgaged to Elaine, she gave an advance

payment so that Juliet could release the mortgage. It was only after the mortgage was released and free from the claims of other persons that Dehlma bought the property. Thus, she is a purchaser in goo d faith. (Mathay vs. C.A., G.R. No. 115788) Who as between Dehlma and XYZ Bank has a better right to the house and lot? Between Dehlma and XYZ Bank, Dehlma has a better right to the house and lot. After the release of the mortgage, the Deed of Absolute Sale was registered and a new title was issued in Dehlma’s name. Act 3344 is applicable exclusively to instruments resulting from agreement of parties thereto and does not apply to deeds of a sheriff conveying to a purchaser unregistered lands sold to him under execution. (Williams vs. Suner, 49 Phil 534) Pascual vs. Coronel 527 SCRA 474 A registered owner with title has a better right to possess the land as opposed to a vendee with an unregistered sale. Barstowe vs. Republic 519 SCRA 148 The Republic may not go after innocent purchasers of lots of a subdivision owner (who is guilty of securing titles fraudulently) who looked into TCTs of developer and found nothing to raise doubts as to their validity and authenticity. Antonio vs. Santos 538 SCRA 1 When two certificates of title are issued to different persons covering the same land in whole or in part, the earlier date must prevail; and in case of successive registrations where more than one certificate is issued over the same land, the person holding a prior certificate is entitled to the land as against a person who relies on a subsequent certificate. Amodia Vda. de Melencion vs. Court of Appeals 534 SCRA 62 The registration under the Art. 1544 of the New Civil Code refers to registration under the torrens system which considers the act of registration as the operative act that gives

26

validity to the transfer or creates a lien upon the land. If a parcel of land is registered under the Land Registration Act and has a torrens certificate of title and is sold and the sale is registered not under Land Registration Act but under Act 3344, such sale is not considered registered as the term is used under Article 1544 of the New Civil Code. The loss of a certificate of title of a titled land does not convert the land into unregistered land. Fudot vs. Cattleya Land, Inc. 533 SCRA 351 Knowledge gained by first buyer of second sale cannot defeat first buyer’s rights, except where the second buyer registers in good faith the second sale ahead of the first. It is essential to merit the protection of Art. 1544 of the New Civil Code that the second realty buyer must act in good faith in registering his deed of sale. Tanglao vs. Parungao 535 SCRA 123 Indefeasibility of title does not extend to transferees who take the certificate of title in bad faith. xxx The act of registration by the second buyer must be coupled with good faith and no knowledge of any defect or lack of title of the vendor or that he is not aware of facts which should put him upon inquiry and investigation as must be necessary to acquaint him with defects in the title.

2001 BAR On 12 June 1995, Jesus sold a parcel of registered land to Jaime. On 30 June 1995, he sold the same land to Jose. Who has a better right if: (a) The first sale is registered ahead of the second sale, with knowledge of the latter. Why? (b) The second sale is registered ahead of the first sale, with knowledge of the latter. Why? (a) The first buyer has the better right if his sale was first to be registered, even though the first buyer knew of the second sale. The fact that he knew of the second sale at the time of his registration does not make him as acting in bad faith because the sale to him was ahead in time, hence, has a priority in right. What creates bad faith in the case of double sale of land is knowledge of a previous sale. (b) The first buyer is still to be preferred, where the second sale is registered ahead of the first sale but with knowledge of the latter. This is because the second buyer, who at the time he registered his sale knew that the property had already been sold to someone else, acted in bad faith.

Real Estate Mortgage Requisites: 1. Constituted to secure the fulfillment of a principal obligation. 2. The mortgagor is the absolute owner of the thing mortgaged. 3. The persons constituting the mortgage have the free disposal of their property, and in the absence thereof, that they be legally authorized for the purpose. (Art. 2085, NCC) How Foreclosed: 1. JUDICIAL Foreclosure – governed by Rule 68 of the Rules of Court 2. EXTRAJUDICIAL – governed by Act 3135, as amended by Act 411 Bank of Commerce vs. Sps. Flores GR No. 174006, December 8, 2010

27

A mortgage given to secure advancements is a continuing security and is not discharged by repayment of the amount named in the mortgage until the full amounts of the advancements are paid. Respondents’ full payment of the loans annotated on the title of the property shall not effect the release of the mortgage because, by the express terms of the mortgage, it was meant to secure all future debts of the spouses and such debts had been obtained and remain unpaid. Unless full payment is made by the spouses of all the amounts that they have incurred from petitioner bank, the property is burdened by the mortgage.

should put a reasonable man on guard is not an innocent purchaser for value. In the present problem, the bank is expected as a matter of standard operating procedure, to have conducted an ocular inspection of the premises before granting any loan. Apparently, Metrobank did not follow this procedure, otherwise, it should have discovered that the condominium unit in question was occupied by Cesar and that fact should have led it to make further inquiry. Under the circumstances, Metrobank cannot be considered a mortgagee and buyer in good faith.

Ereña vs. Querrer-Kauffman 492 SCRA 298, 6/22/2006

Heirs of Espiritu vs. Landrito 520 SCRA 385

The doctrine of mortgagee in good faith presupposes that the mortgagor who is not the rightful owner of the property, has already succeeded in obtaining a Torrens title over the property in his name and that, after obtaining the said title, he succeeds in mortgaging the property to another who relies on what appears on the said title. It does not apply to a situation where the title is still in the name of the rightful owner and the mortgagor is a different person pretending to be the owner.

Registration of a foreclosure sale (where debtors were not given opportunity to settle their debt at the correct amount without iniquitous interest) cannot transfer any rights over mortgaged property – even after the expiration of 1 year from registration of sale.

2001 BAR Cesar bought a residential condominium unit from High Rise Co. and paid the price in full. He moved into the unit, but somehow he was not given the Condominium Certificate of Title covering the property. Unknown to him, High Rise Co. subsequently mortgaged the entire condominium building to Metrobank as security for a loan of P500 million. High Rise Co. failed to pay the loan and the bank foreclosed the mortgage. At the foreclosure sale, the bank acquired the building, being the highest bidder. When Cesar learned about this, he filed an action to annul the foreclosure sale insofar as his unit was concerned. The bank put up the defense that it relied on the condominium certificates of title presented by High Rise Co., which were clean. Hence, it was a mortgagee and buyer in good faith. Is this defense tenable or not? Metrobank’s defense is untenable. As a rule, an innocent purchaser for value acquires a good and clean title to the property. However, it is settled that one who closes his eyes to facts that

San Fernando Rural Bank Inc. vs. Pampanga Omnibus Dev’t Corp. April 4, 2007, 520 SCRA 566 The ministerial duty of the RTC to issue a writ of possession does not become discretionary simply because the Register of Deeds had elevated in consulta to the Land Registration Authority the question whether the Torrens title should be issued in favor of a buyer whose Affidavit of Consolidation was registered in the RD, or in favor of the assignee of mortgage who claimed to have redeemed the property.

(ii) Involuntary Dealings Adverse Claim Essential Requisites i. The claimant must have an interest in the land adverse to the registered owner ii. The right or interest must arise subsequent to the original registration of the land iii. The registration of such interest or right is not otherwise provided by P.D. 1529 iv. The claim must be in writing, signed and sworn to by the adverse claimant, and must comply with formal requirements

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An attorney’s lien may be annotated on the delinquent client’s title only after it has become judicially settled and the execution thereof ordered by the court. Where the interest of a lawyer by way of attorney’s fees consists of a share in the property recovered by the client, such interest may be the basis of an adverse claim. Sajonas vs. CA 258 SCRA 79 Cancellation of an adverse claim is still necessary even after the lapse of thirty days to render it ineffective. Rodriguez vs. CA 495 SCRA 490 7/20/2006 The annotation of an adverse claim is a measure designated to protect the interest of a person over a piece of real property where the registration of such interest or right is not otherwise provided by the Land Registration Act, and such serves as a notice and warning to third parties dealing with said property that someone is claiming an interest on the same or better right than the registered owner thereof. 1998 BAR Sec. 70 of P.D. 1529, concerning adverse claims on registered land, provides a 30-day period of effectivity of an adverse claim, counted from the date of its registration. Suppose a notice of adverse claim based upon a contract to sell was registered on March 1, 1997 at the instance of the BUYER, but on June 1, 1997, or after the lapse of the 30-day period, a notice of levy on execution in favor of a JUDGMENT CREDITOR was also registered to enforce a final judgment for money against the registered owner. Then, on June 15, 1997 there having been no formal cancellation of his notice of adverse claim, the BUYER pays to the seller-owner the agreed purchase price in full and registers the corresponding deed of sale. Because the annotation of the notice of levy is carried over to the new title in his name, the BUYER brings an action against the JUDGMENT CREDITOR to cancel such annotation, but the latter claims that his lien is superior because it was annotated after the adverse claim of the BUYER had ipso

facto ceased to be effective. prosper?

Will the suit

The suit will prosper. While an adverse claim duly annotated at the back of the title under Sec. 70 of P.D. 1529 is good only for 30 days, cancellation thereof is still necessary to render it ineffective. Otherwise, the inscription thereon will remain annotated as a lien on the property. While the life of the adverse claim is 30 days under P.D. 1529, it continues to be effective until it is cancelled by formal petition filed with the court. The cancellation of the notice of levy is justified under Section 108 of P.D. 1529, considering that the levy on execution cannot be enforced against the buyer whose adverse claim against the registered owner was recorded ahead of the notice of levy on execution.

Lis Pendens Requisites of a Valid Lis Pendens i. There must be an action or proceeding affecting the title of real property on the possession thereof ii. The court must have jurisdiction over the subject matter and the property iii. That the property is sufficiently described in the complaint

2001 BAR Mario sold his house and lot to Carmen for P1 million payable in five (5) equal installments. The sale was registered and title was issued in Carmen’s name. Carmen failed to pay the last 3 installments and Mario filed an action for collection, damages and attorney’s fees against her. Upon filing of the complaint, he caused a notice of lis pendens to be annotated on Carmen’s title. Is the notice of lis pendens proper or not? Why? The notice of lis pendens is not proper for the reason that the case filed by Mario against Carmen is only for collection, damages and attorney’s fee. Annotation of lis pendens can only be done in cases involving recovery of possession of real property, or to quiet title or to remove cloud

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thereon, or for partition or any other proceeding affecting title to the land or the use or occupation thereof. The action filed by Mario does not fall on any one of these.

well as the issuance of a new title in his name.

Viewmaster Construction Corp. vs. Maulit 326 SCRA 490, 7/20/2006

Carlos is a buyer in bad faith. The notice of lis pendens was still annotated at the back of the title at the time he bought the land from Bart. The uncancelled notice of lis pendens operates as a constructive notice of its contents as well as interests, legal or equitable, included therein. All persons are charged with the knowledge of what it contains.

It is an announcement to the whole world that a particular real property is in litigation and serves as a warning that one who acquires an interest therein does so at his own risk, or that he gambles on the result of the litigation over said property. Generally a notice of Lis Pendens covers actions pending before the regular courts however, cases involving real property pending before administrative agencies such as the HLURB, SEC and the DARAB which are endowed with quasi-judicial functions have been recognized as proper basis for the annotation of a Lis Pendens. Availability of lis pendens is not confined to cases involving the title to or possession of real property. It applies to suits brought to “establish an equitable estate, interest or right in specific real property or to enforce any lien, charge or encumbrance against it.” 2002 BAR Sancho and Pacifico are co-owners of a parcel of land. Sancho sold the property to Bart. Pacifico sued Sancho and Bart for annulment of the sale and reconveyance of the property based on the fact that the sale included his one-half pro indiviso share. Pacifico had a notice of lis pendens annotated on the title covering the property. After trial, the court declared Bart the owner of the property and ordered the cancellation of the notice of lis pendens. The notice of lis pendens could not be cancelled immediately because the title over the property was with a bank to which the property had been mortgaged by Bart. Pacifico appealed the case. While the appeal was pending and with the notice of lis pendens still uncancelled, Bart sold the property to Carlos, who immediately caused the cancellation of the notice of lis pendens, as

Is Carlos (a) a purchaser in good faith, or (b) transferee pendente lite?

In an earlier case, it was held that a notice of an adverse claim remains effective and binding notwithstanding the lapse of the 30 days from its inscription in the registry. This ruling is even more applicable in a lis pendens. Carlos is a transferee pendente lite insofar as Sancho’s share in the co-ownership in the land is concerned because the land was transferred to him during the pendency of the appeal. Alternative Answer Carlos is a purchaser in good faith. A possessor in good faith has been defined as “one who is unaware that there exists a flaw which invalidates his acquisition of the thing”. Good faith consists in the possessor’s belief that the person from whom he received the thing was the owner of the same and could convey his title. In the case in question, while Carlos bought the subject property from Bart while a notice of lis pendens was still annotated thereon, there was also an existing court order cancelling the same. Hence, Carlos cannot be considered as being “aware of a flaw which invalidates the acquisition of the thing” since the alleged flaw, the notice of lis pendens was already being ordered cancelled at the time of the purchase. On this ground alone, Carlos can already be considered a buyer in good faith. (Po Lam vs. Court of Appeals, 347 SCRA 86).

If your answer is (a), how can the right of Pacifico as co-owner be protected? Explain. Pacifico can protect his right as a co-owner by pursuing his appeal, asking the Court of Appeals to order the re-annotation of the lis pendens on

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the title of Carlos; and by invoking the right of redemption of Bart’s share under Article 1620 of the New Civil Code. Alternative Answer To protect his right over the subject property, Pacifico should have timely filed an action for reconveyance and reinstated the notice of lis pendens.

Levies on Execution a. Registration of the Levy on Execution b. Registration of the Certificate on Sale c. Sheriff’s Final Deed of Sale d. Petition for Issuance of a New Certificate of Title pursuant to Sec. 75 of P.D. 1529 ….(Padilla vs. Philippine Producers Cooperative, G.R. 141256, July 15, 2005) Pineda vs. Arcalas 538 SCRA 596 A levy on execution registered takes preference over a prior unregistered sale – a registered lien is entitled to preferential consideration. An exception to the preference given to a registered lien is the case where a party has actual knowledge of the claimant’s actual, open, continuous and notorious possession of the disputed property at the time the levy or attachment is registered.

Writ of Attachment The Court held that a registered writ of attachment is a proceeding in rem. It is against a particular property, enforceable against the whole world. The attaching creditor acquires a specific lien on the attached property which nothing can subsequently destroy except the very dissolution of the attachment or levy itself. An exception to the preference given to a registered lien is the case where a party has actual knowledge of the claimant’s actual, open, continuous and notorious possession of the disputed property at the time the levy or attachment is registered.

G.R. 169541, Oct. 9, 2009 Sps. Scofield secured a mortgage over their parcel of land in favor of The Bank. Meanwhile, a levy on attachment was annotated on their title, in favor of The Trading Company, which filed a case against the spouses. Thereafter, Sps. Scofield sold the property to Sps. Burrows by virtue of a Deed of Sale with Assumption of Mortgage. The latter spouses however failed to register this Deed because the owner’s title was with The Bank. In the meantime, a decision was rendered in favor of The Trading Company. On the other hand, Sps. Burrows defaulted in the payment of the amortization to The Bank, thus the property was extra-judicially foreclosed and sold at public auction with Sps. Burrows emerging as the highest bidder. Thus, Sps. Burrows filed an action to quiet their title against The Trading Company contending that by virtue of the Deed of Sale with Assumption of Mortgage, all rights, interests and participation over the property had been transferred by Sps. Scofield in their favor. Hence, The Trading Company had no more right of redemption. DECISION: True, Sps. Burrows are successors-in-interest of Sps. Scofield. However their supposed right or title over the property as evidenced by the Deed of Absolute Sale is unregistered and as such, cannot affect third persons. Such Deed shall not take effect as a conveyance or bind the land but shall operate only as a contract between the parties therein and as authority of the Register of Deeds to register the sale and transfer title. Registration is the operative act to convey the land insofar as third persons are concerned. The unregistered sale of the house and lot by Sps. Scofield cannot prejudice the right of redemption granted by law in favor of The Trading Company which has a levy on attachment duly recorded in its favor.

ILLUSTRATIVE CASE

The Trading Company has acquired by operation of law the right of redemption over the foreclosed property by virtue of the court decision in its favor and against the registered owners, Sps. Scofield. The writ of attachment entitles the attaching creditor to exercise the right to redeem the foreclosed property. (iii) Common Registration Problems

Cayton vs. Zoennix Trading Corp.

Cautionary Notice

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Under the Spanish Mortgage Law, this was a procedure intended to maintain the right of priority of the interested party while he goes about correcting the defect of his document. The Spanish Mortgage Law as a system of registration has been discontinued as of June 11, 1978 by Sec. 3 of P.D. 1529.

Justalero vs. Gonzales 517 SCRA 341 Where the predecessor of a free patent applicant did not avail of any legal remedy to assail a decision adverse to him, his successors are bound thereby. Heirs of Jugalbot vs. CA 518 SCRA 202, 3/12/2007

Opposition Filed By Lawyers A mere opposition from a lawyer or a third person who claims an adverse interest in the property involved in a transaction is not sufficient to justify the Register of Deeds in denying the registration of a voluntary instrument. (LRC Consulta No. 259) Litigious matters are to be decided, and the appropriate relief granted, not by the Register of Deeds, but by a court of competent jurisdiction. (LRC Consulta No. 57)

Carryover of Encumbrances Sec. 59 of P.D. 1529 provides: “If at the time of any transfer, subsisting encumbrances or annotations appear in the registration book, they shall be carried over and stated in the new certificate except so far as they may be simultaneously released or discharged. Exception: Upon a proper foreclosure of a prior mortgage, all liens subordinate to the mortgage are likewise foreclosed, and the purchaser at public auction acquires the title free from the subordinate liens. (PNB vs. ICB 199 SCRA 500)

VI. PATENTS; GOVERNMENT AWARDS

Taguinod vs. Court of Appeals 533 SCRA 403 The rights of a homestead patentee are superior to that of a tenant under the Agrarian Reform Law.

The landowner is denied due process where the Department of Agrarian Reform took the property without sending notice of the impending land reform coverage to the proper party. Tanenglian vs. Lorenzo, 3/28/2008; Padua vs. CA 517 SCRA 232, 3/2/2007 Acquisition of land through agrarian reform requires full payment of amortization before a farmer-beneficiary may be issued a Certificate of Land Ownership Award or Emancipation Patent which, in turn, can become the basis for the issuance in his name of an original or a transfer certificate of title. Padua vs. Ca 517 SCRA 232, 3/2/2007 Department of Agrarian Reform Adjudication Board [DARAB] Regional Adjudicator oversteps the boundaries of his jurisdiction when he makes a declaration that certain properties are ancestral lands and proceeds to award the same to the claimants-jurisdiction over the delineation and recognition of the same is explicitly conferred on the National Commission on Indigenous Cultural Communities /Indigenous People. DARAB acts without jurisdiction in entertaining a collateral attack on a party’s TCT. 2000 BAR In 1979, Nestor applied for and was granted a Free Patent over a parcel of agricultural land with an area of 30 hectares, located in General Santos City. He presented the Free Patent to the Register of Deeds, and he was issued a corresponding Original Certificate of Title No. 375. Subsequently, Nestor sold the land to Eddie. The deed of sale was submitted to the Register of Deeds and on the basis thereof, OCT No. 375 was cancelled

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and Transfer Certificate of Title No. 4576 was issued in the name of Eddie. In 1986, the Director of Lands filed a complaint for annulment of OCT No. 375 and TCT No. 4576 on the ground that Nestor obtained the Free Patent thru fraud. Eddie filed a motion to dismiss on the ground that he was an innocent purchaser for value and in good faith and as such, he has acquired a title to the property which is valid, unassailable and indefeasible. Decide the motion. The motion of Nestor to dismiss the complaint for annulment of OCT No. 375 and TCT No. 4576 should be denied for the following reasons: 1)

Eddie cannot claim protection as an innocent purchaser for value nor can he interpose the defense of indefeasibility of his title, because his TCT is rooted on a void title. Under Sec. 91 of C.A. No. 141, as amended, otherwise known as the Public Land Act, statements of material facts in the application for public land must be under oath. Sec. 91 of the same act provides that such statements shall be considered as essential conditions and parts of the concession, title or permit issued, any false statement therein, or omission of facts shall ipso facto produce the cancellation of the concession. The patent issued to Nestor in this case is void ab initio not only because it was obtained by fraud but also because it covers 30 hectares which is far beyond the maximum of 24 hectares provided by the free patent law.

The government can seek annulment of the original and transfer certificates of title and the reversion of the land to the state. Eddie’s defense is untenable. The protection afforded by the Torrens System to an innocent purchaser for value can be availed of only if the land has been titled thru judicial proceedings where the issue of fraud becomes academic after the lapse of one (1) year from the issuance of the decree of registration. In public land grants, the action of the government to annul a title fraudulently obtained does not prescribe such action and will not be barred by the transfer of the title to an innocent purchaser for value.

Martinez vs. Court of Appeals 542 SCRA 604, 1/28/2008

A certificate of title issued on the basis of a free patent procured through fraud or in violation of the law may be cancelled as such title is not cloaked with indefeasibility. The principle of indefeasibility of title is unavailing where fraud attended the issuance of the free patents and titles. Republic Act No. 10023 AN ACT AUTHORIZING THE ISSUANCE OF FREE PATENTS TO RESIDENTAL LANDS Section 1. Qualifications. - Any Filipino citizen who is an actual occupant of a residential land may apply for a Free Patent Title under this Act: Provided; That in highly urbanized cities, the land should not exceed two hundred (200) square meters; in other cities, it should not exceed five hundred (500) square meters; in first class and second class municipalities, it should not exceed seven hundred fifty (750) square meters; and in all other municipalities, it should not exceed one thousand (1,000) square meters; Provided, further, That the land applied for is not needed for public service and/or public use. Section 2. Coverage. - This Act shall cover all lands that are zoned as residential areas, including townsites as defined under the Public Land Act; Provided, That none of the provisions of Presidential Decree No. 705 shall be violated. Zoned residential areas located inside a delisted military reservation or abandoned military camp, and those of local government units (LGUs) or townsites which preceded Republic Act No. 7586 or the National Integrated Protected Areas System (NIPAS) law, shall also be covered by this Act. Section 3. Application. - The application on the land applied for shall be supported by a map based on an actual survey conducted by a licensed geodetic engineer and approved by the Department of Environment and Natural Resources (DENR) and a technical description of the land applied for together with supporting affidavit of two (2) disinterested persons who are residing in the barangay of the city or municipality where the land is located, attesting to the truth of the facts contained in the application to the effect that the applicant thereof has, either by himself or through his predecessor-in-interest, actually resided on and continuously possessed and occupied, under a

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bona fide claim of acquisition of ownership, the land applied for at least ten (10) years and has complied with the requirements prescribed in Section 1 hereof. Section 4. Special Patents. - Notwithstanding any provision of law to the contrary and subject to private rights, if any, public land actually occupied and used for public schools, municipal halls, public plazas or parks and other government institutions for public use or purpose may be issued special patents under the name of the national agency or LGU concerned: Provided, That all lands titled under this section shall not be disposed of unless sanctioned by Congress if owned by the national agency or sanctioned by the sanggunian concerned through an approved ordinance if owned by the LGU. Section 5. Removal of Restrictions. - The restrictions regarding encumbrances, conveyances, transfers or dispositions imposed in Sections 118, 119,121, 122 and 123 of Chapter XII, Title VI of Commonwealth Act No. 141 as amended, shall not apply to patents issued under this Act. Section 6. Period for Application. - All applications shall be filed immediately after the effectivity of this Act before the Community Environment and Natural Resources Office (CENRO) of the DENR. The CENRO is mandated to process the application within one hundred and twenty (120) days to include compliance with the required notices and other legal requirements, and forward this recommendation to the Provincial Environment and Natural Resources Office (PENRO), who shall have five (5) days to approve or disapprove the patent. In case of approval, patent shall be issued; in case of conflicting claims among different claimants, the parties may seek the proper judicial remedies. xxx

VII. PETITIONS AND ACTIONS AFTER ORIGINAL REGISTRATION

Petitioners contend that the execution of the final and executory decision — which is to issue titles in the name of private respondent — cannot be compelled by mandamus because of the "formality" that the registered owner first surrenders her duplicate Certificates of Title for cancellation per Sec. 80 of P.D. No. 1529 bears no merit. . . To file another action just to compel the registered owner, herein petitioner Tan, to surrender her titles constitute violation of, if not disrespect to, the orders of the highest tribunal. Otherwise, if execution cannot be had just because the losing party will not surrender her titles, the entire proceeding in the courts, not to say the efforts, expenses and time of the parties, would be rendered nugatory. It is revolting to conscience to allow petitioners to further avert the satisfaction of their obligation because of sheer literal adherence to technicality, or formality of surrender of the duplicate titles. The surrender of the duplicate is implied from the executory decision since petitioners themselves were parties thereto. Besides, as part of the execution process, it is a ministerial function of the Register of Deeds to comply with the decision of the court to issue a title and register a property in the name of a certain person, especially when the decision had attained finality, as in this case. Lana’s title is the subject of a subsisting mortgage, does the order of the court directing the surrender of the title to Lois affect the rights of Clark, as mortgagee? No, because any lien annotated on the certificate of title, like the existing mortgage, is carried over to the new transfer certificate of title to whoever it is issued. The mortgage subsists notwithstanding a change in ownership; in short, the personality of the owner is disregarded. Pursuant to Art. 2126 of the Civil Code, a real estate mortgage directly and immediately subjects the property upon which it is imposed, whoever the possessor may be, to the fulfillment of the obligation for whose security it was constituted. It is inseparable from the property mortgaged as it is a right in rem, a lien on the property whoever its owner may be. (Ligon vs. Court of Appeals)

Surrender of Witheld Duplicate Certificate (Sec. 107, P.D. 1529) Toledo Banaga vs. Court of Appeals January 28, 1999

Amendment and Alteration of Certificates (Sec. 108, P.D. 1529)

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Oliva vs. Republic April 27, 2007 Since the property in this case was originally alienable land of the public domain, the application for free patent contained the condition that a forty-meter legal easement from the banks on each side of any river or stream found on the land shall be demarcated and preserved as permanent timberland. . . In this case, the trial court properly took judicial notice that Talamban, Cebu City is an urban area. Judicial notice is the cognizance of certain facts which judges may properly take and act on without proof because they already know them. A municipal jurisdiction, whether designated as chartered city or provincial capital, is considered as urban in its entirety if it has a population density of at least 1,000 persons per square kilometer. The City of Cebu was created on October 20, 1934 under Commonwealth Act No. 58. It is a highly urbanized city classified as entirely urban. Thus, all its barangays, including Talamban, are considered urban. Conformably with the foregoing considerations, the reduction of the legal easement of forty meters to three meters now is in order. Cabañez v. Solano G.R. No. 200180, [June 6, 2016]) . . . . changes in the citizenship of a person or in his status from legitimate to illegitimate or from married to not married are substantial as well as controversial, which can only be established in an appropriate adversary proceeding as a remedy for the adjudication of real and justifiable controversies involving actual conflict of rights the final determination of which depends upon the resolution of issues of nationality, paternity, filiation or legitimacy of the marital status for which existing substantive and procedural laws as well as other rules of court amply provide.

Notice and Replacement of Lost or Destroyed original of Torrens Title (Sec. 109, P.D. 1529) Feliciano vs. Zaldivar September 26, 2006 The CFI which granted respondent Aurelio’s petition for the issuance of a new owner’s duplicate copy of TCT No. T-8502 did not

acquire jurisdiction to issue such order. It has been consistently ruled that "when the owner’s duplicate certificate of title has not been lost, but is in fact in the possession of another person, then the reconstituted certificate is void, because the court that rendered the decision had no jurisdiction. xxx The appellate court’s reliance on the joint affidavit of confirmation of sale purportedly executed by Remegia and her uncle, Narciso Labuntog, is not proper. In the first place, respondent Aurelio cannot rely on the joint affidavit of confirmation of sale to prove that they had validly acquired the subject lot because, by itself, an affidavit is not a mode of acquiring ownership. Coombs v. Castañeda G.R. No. 192353, [March 15, 2017] In a long line of cases, the Court has held that the RTC has no jurisdiction when the certificate sought to be reconstituted was never lost or destroyed but is in fact in the possession of another person. In other words, the fact of loss of the duplicate certificate is jurisdictional.

Reconstitution of Lost or Destroyed Titles (Sec. 110, P.D. 1529) Where the original copy of the title in the files of the Register of Deeds is lost or destroyed, transactions may be accepted for entry and provisional registration, pending reconstitution of the original. (LRC Circular No. 3, Dec. 1988) Republic vs. Versoza March 28, 2008 It is not the ministerial function of the Register of Deeds to record a right or an interest that was not duly noted in the reconstituted certificate of title – the responsibility is lodged by law to the proper court. Heirs of Venturanza vs. Republic 528 SCRA 238 A court has no jurisdiction to order the reconstitution of title over land which was never registered. . . A land may be considered as not having been originally registered if there is no

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decree number, original number or LRC record.

certificate of

title

Pascua vs. Republic February 13, 2008 R.A. 26 presupposes that the property whose title is sought to be reconstituted has already been brought under the provisions of the Torrens System. Cañero vs. University of the Philippines 437 SCRA 630 (citing Alabang Dev’t Corp vs. Valenzuela) Upon examination of the subject petition for reconstitution, the Court notes that some essential data required in Sec. 12 and 13 of R.A. 26 have been omitted: the nature and description of the buildings or improvements, which do not belong to the owner of the land, and the names and addresses of the owners of such buildings or improvements, and the names and addresses of the occupants or persons in possession of the property, of the owners of the adjoining properties and of all persons who may have any interest in the property. Neither do these data appear in the Notice of Hearing, such that no adjoining owner, occupant or possessor was ever served a copy thereof by registered mail or otherwise. xxx [s]aid defects have not invested the Court with the authority or jurisdiction to proceed with the case because the manner or mode of obtaining jurisdiction as prescribed by the statute which is mandatory has not been strictly followed, thereby rendering all proceedings utterly null and void. We hold that the mere Notice that "all interested parties are hereby cited to appear and show cause if any they have why said petition should not be granted" is not sufficient for the law must be interpreted strictly; it must be applied rigorously, with exactness and precision. Republic vs. Sanchez July 17, 2006 Respondents are correct in saying that the service of notice of the petition for reconstitution filed under RA 26 to the occupants of the property, owners of the adjoining properties, and all persons who may have any interest in the property is not required if the petition is based

on the owner's duplicate certificate of title or on that of the co-owner's, mortgagee's, or lessee's. .. Reconstitution involving Sections 12 and 13 of RA 26], notices to adjoining owners and to the actual occupants of the land are mandatory and jurisdictional. But in petitions for reconstitution falling under Sections 9 and 10 of RA 26 where, as in the present case, the source is the owner's duplicate copy, notices to adjoining owners and to actual occupants of the land are not required. When the law is clear, the mandate of the courts is simply to apply it, not to interpret or to speculate on it. In sum, RA 26 separates petitions for reconstitution of lost or destroyed certificates of title into two main groups with two different requirements and procedures. Sources enumerated in Sections 2(a), 2(b), 3(a), 3(b), and 4(a) of RA 26 are lumped under one group (Group A); and sources enumerated in Sections 2(c), 2(d), 2(e), 2(f), 3(c), 3(d), 3(e), and 3(f) are placed together under another group (Group B). For Group A, the requirements for judicial reconstitution are set forth in Section 10 in relation to Section 9 of RA 26; while for Group B, the requirements are in Sections 12 and 13 of the same law.

Republic v. Lorenzo G.R. No. 172338, December 10, 2012], 700 PHIL 584-597

As correctly pointed out by petitioner, we had emphasized in Republic v. Holazo that the term "any other document" in paragraph (f) refers to reliable documents of the kind described in the preceding enumerations and that the documents referred to in Section 2 (f) may be resorted to only in the absence of the preceding documents in the list. Therefore, the party praying for the reconstitution of a title must show that he had, in fact, sought to secure such documents and failed to find them before presentation of "other documents" as evidence in substitution is allowed.

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Reconstituted Titles: Extrajudicial -vs- Judicial

519 SCRA 238, Republic vs. Mendoza 519 SCRA 203

Reconstituted titles shall have the same validity and legal effects as to the originals thereof unless the reconstitution was made extrajudicially. In contrast to the judicial reconstitution of a lost certificate of title which is in rem, the administrative reconstitution is essentially ex-parte and without notice. The reconstituted certificates of title do not share the same indefeasible character of the original certificates of title for the following reason: The nature of a reconstituted Transfer Certificate of Title of a registered land is similar to that of a second Owner’s Duplicate Transfer Certificate of Title. Both are issued, after the proper proceedings, on the representation of the registered owner that the original of the said TCT, respectively, was lost and could not be located or found despite diligent efforts exerted for that purpose. Both, therefore, are subsequent copies of the originals thereof. A cursory examination of these subsequent copies would show that they are not the originals. Anyone dealing with such copies are put on notice of such fact and thus warned to be extra careful. (Barstowe Phils. Corp. vs. Republic 519 SCRA 238)

Estoppels against the public are little favored. They should not be invoked except in rare and unusual circumstances, and may not be invoked where they would operate to defeat the effective operation of a policy adopted to protect the public. They must be applied with circumspection and should be applied only in those special cases where the interests of justice clearly require it. Nevertheless, the government must not be allowed to deal dishonorably or capriciously with its citizens, and must not play an ignoble part or do a shabby thing; and subject to limitations . . . the doctrine of equitable estoppel may be invoked against public authorities as well as against private individuals. It is only fair and reasonable to apply the equitable principle of estoppel by laches against the government to avoid an injustice to the innocent purchasers for value.

Rep vs Mancao

Barstowe Phils. Corp. vs. Republic 519 SCRA 148 Reconstituted titles shall have the same validity and legal effect as the originals thereof unless the reconstitution was made extrajudicially. In contrast to the judicial reconstitution of a lost certificate of title which is in rem, the administrative reconstitution is essentially exparte and without notice. The reconstituted certificates of title do not share the same indefeasible character of the original certificates of title xxx

Estoppel in Actions for Cancellation of Title

Estate of the Late Yujuico vs. Republic 537 SCRA 513 An action to recover lands of the public domain is imprescriptible. Such right however can be barred by laches/estoppel under Sec. 32 of P.D. 1529 which recognizes the rights of innocent purchasers for value above the interests of the government. While it may be true that estoppel does not operate against the State or its agents, deviations have been allowed; The Government must not be allowed to deal dishonorably or capriciously with its citizens, and must not play an ignoble part or do a shabby thing; Subject to its limitations, the doctrine of equitable estoppel may be invoked against public authorities as well as against private individuals. xxx The doctrine of equitable estoppel may be invoked against public authorities when the lot is alienated to innocent purchasers for value and the government did not undertake any act to contest the title for an unreasonable length of time.

VIII. DEALINGS WITH UNREGISTERED LAND Applicable Provision Section 113, P.D. 1529

Barstowe Phils. Corp. vs. Republic

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Recording of Instruments relating to unregistered lands. No deed, conveyance, mortgage, lease, or other voluntary instrument affecting land not registered under the Torrens system shall be valid, except as between the parties thereto, unless such instrument affecting land not registered under the Torrens system shall be valid, except as between the parties thereto, unless such instrument shall have been recorded in the manner herein prescribed in the office of the Register of Deeds for the province or city where the land lies. (a) The Register of Deeds for each province or city shall keep a Primary Entry Book and a Registration Book. The Primary Entry Book shall contain, among other particulars, the entry number, the names of the parties, the nature of the document, the date, hour and minute it was presented and received. The recording of the deed and other instruments relating to unregistered lands shall be effected by any of annotation on the space provided therefor in the Registration Book, after the same shall have been entered in the Primary Entry Book. (b) If, on the face of the instrument, it appears that it is sufficient in law, the Register of Deeds shall forthwith record the instrument in the manner provided herein. In case the Register of Deeds refuses its administration to record, said official shall advise the party in interest in writing of the ground or grounds for his refusal, and the latter may appeal the matter to the Commissioner of Land Registration in accordance with the provisions of Section 117 of this Decree. It shall be understood that any recording made under this section shall be without prejudice to a third party with a better right/ (c) After recording on the Record Book, the Register of Deeds shall endorse among other things, upon the original of the recorded instruments, the file number and the date as well as the hour and minute when the document was received for recording as shown in the Primary Entry Book, returning to the registrant or person in interest the duplicate of the instrument, with appropriate annotation, certifying that he has recorded the instrument after reserving one copy thereof to be furnished the provincial or city assessor as required by existing law. (d) Tax sale, attachment and levy, notice of lis pendens, adverse claim and other instruments in

the nature of involuntary dealings with respect to unregistered lands, if made in the form sufficient in law, shall likewise be admissible to record under this section. (e) For the services to be rendered by the Register of Deeds under this section, he shall collect the same amount of fees prescribed for similar services for the registration of deeds or instruments concerning registered lands.

IX. REGISTRATION OF CHATTEL MORTGAGES Chattel Mortgage vis-à-vis Pledge By a chattel mortgage, personal property is recorded in the Chattel Mortgage Register as a security for the performance of the obligation. If the movable, instead of being recorded, is delivered to the creditor or a third person, the contract is a pledge and not a chattel mortgage. Chattel Mortgage Vehicles Law

vis-à-vis

Revised

Motor

The Revised Motor Vehicles Law is a special legislation enacted to “amend and compile the laws relative to motor vehicles” whereas the Chattel Mortgage Law is a general law covering mortgages of all kinds of personal property. The mortgage of any motor vehicle in order to affect third persons should not only be registered in the Chattel Mortgage Registry, but the same should also be recorded in the Motor Vehicles Office. The failure of the mortgagee to report the mortgage executed in his favor has the effect of making said mortgage ineffective against a purchaser in good faith who registers his purchase in the Motor Vehicles Office. The recording provisions of the Revised Motor Vehicles Law are merely complementary to those of the Chattel Mortgage Law. Thus, as between a chattel mortgagee, whose mortgage is not recorded in the Motor Vehicles Office, and an innocent purchaser for value of a car who registers the car in his name, the latter is entitled to preference. 2003 BAR X constructed a house on a lot which he was leasing from Y. Later, X executed a chattel mortgage over said house in favor of Z as

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security for a loan obtained from the latter. Still later, X acquired ownership of the land where his house was constructed, after which he mortgaged both house and land in favor of a bank, which mortgage was annotated on the Torrens Certificate of Title. When X failed to pay his loan to the bank, the latter, being the highest bidder at the foreclosure sale, foreclosed the mortgage and acquired X’s house and lot. Learning of the proceedings conducted by the bank, Z is now demanding that the bank reconvey to him X’s house or pay X’s loan to him plus interests. Is Z’s demand against the bank valid and sustainable? Why? Suggested Answer No, Z’s demand is not valid. A building is immovable or real property whether it is erected by the owner of the land, by a usufructuary, or by a lessee. It may be treated as a movable by the parties to a chattel mortgage but such is binding only between them and not on third parties. (Evangelista vs. Alto Surety Co., Inc. 103 Phil 401). In this case, since the bank is not a party to the chattel mortgage, it is not bound by it. As far as the bank is concerned, the chattel mortgage does not exist. Moreover, the chattel mortgage is void because it was not registered. Assuming that it is valid, it does not bind the Bank because it was not annotated on the title of the land mortgaged to the bank. Z cannot demand that the Bank pay him the loan Z extended to X, because the Bank was not privy to such loan transaction. Another Suggested Answer No, Z’s demand against the bank is not valid. His demand that the bank reconvey to him X’s house presupposes that he has a real right over the house. All that Z has is a personal right against X for damages for breach of the contract of loan. The treatment of a house, even if built on rented land, as movable property is void insofar as third persons, such as the bank, are concerned. On the other hand, the Bank already had a real right over the house and lot when the mortgage was annotated at the back of the Torrens Title. The bank later became the owner in the foreclosure sale.

Z cannot ask the bank to pay for X’s loan plus interest. There is no privity of contract between Z and the bank. Alternative Answer The answer hinges on whether or not the bank is an innocent mortgagee in good faith or a mortgagee in bad faith. In the former case, Z’s demand is not valid. In the latter case, Z’s demand against the bank is valid and sustainable. Under the Torrens system of land registration, every person dealing with registered land may rely on the correctness of the certificate of title and the law will not in any way oblige him to look behind or beyond the certificate in order to determine the condition of the title. He is not bound by anything not annotated or reflected in the certificate. If he proceeds to buy the land or accept it as a collateral relying on the certificate, he is considered a buyer or a mortgagee in good faith. On this ground, the Bank acquires a clean title to the land and the house. However, a bank is not an ordinary mortgagee. Unlike private individuals, a bank is expected to exercise greater care and prudence in its dealings. The ascertainment of the condition of a property offered as collateral for a loan must be a standard and indispensable part of its operation. The bank should have conducted further inquiry regarding the house standing on the land considering that it was already standing there before X acquired title to the land. The bank cannot be considered as a mortgagee in good faith. On this ground, Z’s demand against the Bank is valid and sustainable.

X. CONSULTA It is clear that the afore-quoted procedure applies only when the instrument is already presented for registration and: (1) the Register of Deeds is in doubt with regard to the proper step to be taken or memorandum to be made in pursuance of any deed, mortgage or other instrument presented to him for registration; or (2) where any party in interest does not agree with the action taken by the Register of Deeds with reference to any such instrument; and (3) when the registration is denied. None of these situations is present in this case. (St. Mary of the Woods School, Inc. vs. Office of the Registry of

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Deeds, G.R. No. 174290, Jan. 20, 2009/St. Mary of the Woods School, Inc. vs. Office of the Registry of Deeds, G.R. No. 176116, Jan. 20, 2009)

XI. P.D. 957, Subdivision and Condominium Protective Buyers’ Decree and R.A. No. 4726, Condominium Act

Don was the owner of an agricultural land with no access to a public road. He had been passing through the land of Ernie with the latter’s acquiescence for over 20 years. Subsequently, Don subdivided his property into 20 residential lots and sold them to different persons. Ernie blocked the pathway and refused to let the buyers pass through his land. a)

Jurisdiction of the Housing and Land Use Regulatory Board (Sec. 1, P.D. No. 1344) (a) unsound real estate practices (b) claims involving refund any other claims filed by a subdivision lot or condominium unit buyer against the project owner, developer, dealer, broker or salesman (c) cases involving specific performance of contractual and statutory obligations filed by buyers of subdivision lot or condominium units, against the owner, etc. Summary of cases or actions over which the HLURB has jurisdiction (a) For a determination of the rights of parties under a contract to sell a subdivision lot (b) For the delivery of title against the subdivision owner (c) For the refund of reservation fees for the purchase of a subdivision lot (d) For specific performance filed by a lot buyer against the seller of a subdivision lot (e) For the annulment of the mortgage constituted by the project owner without the buyer’s consent, the mortgage foreclosure sale and the condominium certificate of title issued to the highest bidder at the said foreclosure sale (f) For the collection of the balance of the unpaid purchase price of a subdivision lot filed by the developer of a subdivision against the lot buyer; and (g) For incidental claims for damages. (Fajardo vs. Bautista, May 10, 1994) (h) Between homeowner’s association and their members (R.A. 8763) 2005 BAR

What are the rights of the lot buyers, if any? Explain.

The lot buyers have the right to: 1)

ask for a constitution of legal easement of right of way; 2) require Don to provide for a right of way. Under Sec. 29 of PD 957, the owner or developer of a subdivision without access to any existing road must secure a right of way; 3) formally complain to the HLURB regarding Don’s failure to comply with PD 957 specifically, i. failure to provide a right of way ii. failure to convert the land from agricultural to residential under agrarian law iii. failure to secure a license to sell 4.) commence criminal prosecution for violation of the penal provisions of PD 957, Sec. 39.

Dulos Realty and Development Corp. vs. Court of Appeals, Nov. 28, 2001 Where plaintiffs seek the specific performance of alleged contractual and statutory obligations of the defendant, e.g. the execution of contracts of sale in favor of the plaintiffs and the introduction in the disputed property of the facilities required by subdivision laws, exclusive jurisdiction over the case rests with the HLURB and not the RTC. Realty Exchange Venture Corp. vs. Sendino, G.R. No. 109703; HLURB possesses adjudicatory powers which include the power to hear and decide cases of unsound real estate business practices and cases of specific performance. In the exercise of its powers and functions, the HLURB must determine must interpret and apply contracts, determine the rights of the parties under these

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contracts and appropriate.

award

damages

whenever

Dela Cruz vs. Court of Appeals Nov. 17, 2004, G.R. No. 148333 It should be stressed however, that, only when there is a showing that the property subject of the controversy is a subdivision lot or condominium that the exercise of adjudicative authority of the HLURB comes into play. xxx The mere relationship between the parties, i.e., that of being subdivision owner/developer and subdivision lot buyer, does not automatically vest jurisdiction in the HLURB. For the action to fall within the exclusive jurisdiction of the HLURB, the decisive element is the nature of the action as enumerated in Section 1 of P.D. No. 1344. 2009 BAR The Ifugao Arms is a condominium project in Baguio City. A strong earthquake occurred which left huge cracks in the outer walls of the building. As a result, a number of condominium units were rendered unfit for use. May Edwin, owner of one of the condominium units affected, legally sue for partition by sale of the whole project? Explain. (4%) Yes. Under Section 8 of the Condominium Law; When several persons own condominiums in a condominium project, an action maybe brought by one or more such persons for partition by sale of the entire project as if the owners of all the condominiums in such project were co-owners of the entire project in the same proportion as their interests in the common areas, provided that the damage to the project has rendered 1/2 or more of the units untenantable and that the condo owners holding in aggregate more than 50% interest in the common areas are opposed to the repair or restoration of the project.

ILLUSTRATIVE CASES: Kakilla vs. Faraon

October 18, 2004 What is plain is that the parties are acting only as ordinary sellers and buyers of a specific lot, a portion of a big tract of land co-owned by certain heirs. Neither are there undertakings specified in the contract that respondents shall develop the land, like providing for the subdivision concrete roads and sidewalks, street lights, curbs and gutters, underground drainage system, independent water system, landscaping, developed park and 24-hour security guard service. Even the rights and obligations of the sellers and buyers of a subdivision lot are not provided in the agreement. All these provisions are usually contained in a standard contract involving a sale of a subdivision lot. Moreover, although the receipts of payment delivered to petitioners by respondents bear the name “Faraon Village Subdivision,” the same does not automatically convert the ordinary and isolated sale of real property into a sale of subdivision lot. Clearly the HLURB has no jurisdiction over the case. Multinational Village Homeowners’ Association, Inc. vs. Court of Appeals Oct. 17, 1991 The Association has admitted in its answer to the complaint of the Corporation that the latter is the owner of the disputed road. The Association insists however, that the said road forms part of the Village and is reserved for the exclusive use of the residents. Such a submission surely cannot have the effect of transferring the controversy to the HLURB as the complaint is not among the cases subject to its exclusive jurisdiction under Section 1 of P.D. 957, as amended. The matter is clearly resoluble by the courts of justice under the provisions of the Civil Code.

2005 BAR Bernie bought on installment a residential subdivision lot from DEVLAND. After having faithfully paid the installment for 48 months, Bernie discovered that DEVLAND had failed to develop the subdivision in accordance with the approved plans and specifications within the time frame in the plan. He thus wrote a letter to DEVLAND informing it that he was stopping payment. Consequently, DEVLAND cancelled the sale and wrote

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Bernie, informing him that his payments are forfeited in its favor. a.) Was the action of DEVLAND proper? Explain. Assuming that the land is a residential subdivision project under P.D. No. 957, DEVLAND’s action is not proper because under Section 23 of said Decree, no installment payment shall be forfeited to the owner or developer when the buyer, after due notice, desists from further payment due to the failure of the owner-developer to develop the subdivision according to the approved plans and within the time limit for complying with the same. b.) Discuss the rights of Bernie under the circumstances. Under the same section of the Decree, Bernie may, at his option, be reimbursed the total amount paid including amortization interests but excluding delinquency interests at the legal rate. He may also ask the HLURB to apply penal sanctions against DEVLAND consisting of payment of administrative fine of not more than P20,000.00 and/or imprisonment for not more than 20 years. c.) Supposing DEVLAND had fully developed the subdivision but Bernie failed to pay further installments after 4 years due to business reverses. Discuss the rights and obligations of the parties. Under R.A. No. 6552 (Maceda Law), DEVLAND has the right to cancel the contract but it has to refund Bernie the cash surrender value of the payments on the property equivalent to 50% of the total payments made. Bernie has the right to pay, without additional interest, the unpaid installments within the grace period granted him by R.A. 6552 equivalent to one-month for every year of installment payments, or four months in this case. After the lapse of four months, DEVLAND cancel the contract after thirty days from and after Bernie receives a notice of cancellation or demand for rescission of the contract by notarial act (Sec. 4, R.A. 6552). Bernie also has the right to sell or assign his rights before the cancellation of the contract (Sec. 5).

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