LTD WEEK 6 CASE DIGESTS

ABAD VS. CA (G.R. No. 84908, December 4, 1989)

Facts: 4 persons (Aquino, Dichoso, Garcia, and petitioner Abad) agreed among themselves to contribute some
funds to purchase a parcel of land in Diliman, Quezon City. To conform with the rules and regulations of the
People's Homesite and Housing Corporation (PHHC), the sellers executed a Deed of Assignment naming Aquino as
the only assignee of the said parcel of land. To protect the other’s rights, Aquino executed an Affidavit stating that
he is the sole assignee but the others are co-owners of the property. When the TCT was issued in the name of
Aquino, Abad requested that a Deed of Sale be executed so that his part in the property would be titled to him.
Aquino refused. Abad annotated his claim in the TCT and filed for a Complaint of specific performance.
 RTC CASE 1: Ordered Aquino to sign, execute and deliver a registerable deed of sale AND ordered the
Register of Deeds to issue a TCT in favor of Abad.

After decision was rendered, Abad learned that the Dayap spouses intended to build a fence around the area that
was already allocated to Abad. Abad filed another case against the Dayaps. The Dayaps base their claim on the
following: (1) they purchased the lot in question from Herminigildo Aquino in good faith and for value as evidenced
by the Deed of Sale executed by the latter in their favor; and (2) they are the ones in possession of the property.
 RTC CASE 2: Ordered Dayaps to cease and desist from making any construction, and interfering or
disturbing Abad in his possession.
 CA: Reversed the RTC decision (for Case 2) but criticized the RTC decision (for Case 1) for adjudicating the
lot to Abad and that it cannot bind the Daysaps since they were not included as parties to the case.

Issues:
(1) Whether the CA committed grave abuse of discretion.
(2) Whether Abads have better right to the property.

Held:
(1) Yes. The CA committed an error in ruling on a case which was not on appeal before it. The CA indeed went
beyond its realm of authority when it criticized the proceedings in Civil Case No. Q-27582, questioning the
assignment of the subject lot to herein petitioners and even hinted at the impropriety of the same.
 What makes the error of the CA more apparent is that the decision in Civil Case No. Q-27582 had
long become final and duly executed. The appellate court need not be reminded of the well-
entrenched principle that a decision, once final and executory, can no longer be altered or modified
even by the court which rendered it, otherwise there would be no end to litigation
 Moreover, had the private respondents presented incontestable proof supporting their claim of
ownership over the property, then the lower court may have decided Civil Case No. Q-35941 in a
different manner, regardless of the outcome in Civil Case No. Q-27582. However, weighing all the
evidence on hand, the lower court found it reasonable and fair to decide for petitioners as their
assertion was backed by a torrens title whereas private respondents miserably failed to convince the
court of their claim.
(2) Yes.
 Re: Sale of Aquino to Dayaps:
i. With respect to the allegation of private respondents that they purchased the property in
question from Herminigildo Aquino in good faith and for value in 1972 — We hold that such
sale could not have covered a definite portion of the land under co-ownership.
ii. It is well-settled that a co-owner has no right to sell a divided part, by metes and bounds, of
the real estate owned in common. A co-owner may not convey a physical portion of the land
owned in common.
iii. Aquino, a mere co-owner, could not have validly sold to private respondents a specific part of
the land he owned in common with petitioner and two others as described in the Deed of
Sale executed by him in favor of private respondents.
iv. Therefore, the Dayaps cannot claim title to that definite portion of the land owned in
common, wherein they have made and were about to begin other constructions at the time
the complaint for injunction was filed by petitioners in the lower court.
  Re: Possession
i. Mere possession cannot defeat the title of a holder of a registered torrens title to real
property.
ii. Dayaps merely have in their possession a deed of absolute sale executed way back in 1972
to evidence their claim of ownership. Abad, on the other hand, has the affidavit proving his
right as co-owner; their adverse claim annotated at the back of the torrens title of Aquino;
and a final judgment in their favor. The transfer certificate of title covering the disputed lot is
now in the name of petitioner spouses. Such title is entitled to respect and great weight until
somebody else can show a better right to the lot.
 RTC Decision reinstated granting an injunction. Decision is without prejudice to any right private
respondents may have against Aquino. All constructions built by private respondents in good faith
may be removed by them following the provisions in the Civil Code on builders in good faith.

GUARANTEED HOMES, INC. vs. VALDEZ (G.R. No. 171531, January 30, 2009)

FACTS: Respondent, who are descendants of Pablo Pascua (Pablo), filed a complaint seeking reconveyance of a
parcel of land with an area of 23.7229 hectares situated in Subic, Zambales with OCT No. 404 issued in the name of
Pablo. It contained several annotations in the memorandum of encumbrances: Extrajudicial Settlement of a Sole
Heir and Confirmation of Sales executed by Cipriano (TCT 8241)  Sold the properties to Sps. Rodolfo (TCT 8242)
in 1967  Sold to Guaranteed Homes, Inc. in 1969

In 1969, a TCT was issued in the name of Guaranteed Homes (TCT 10863). In 1997, the son of Cipriano, filed on
24 January 1997 a petition before the RTC for the issuance of a new owners duplicate of OCT No. 404. Petitioner
filed a motion to dismiss on the grounds that the action is barred by the Statute of Limitations, more than 28 years
having elapsed from the issuance of Guaranteed Home’s TCT up to the filing of the complaint, and that the
complaint states no cause of action as it is an innocent purchaser for value, it having relied on the clean title of the
spouses Rodolfo.
 RTC: Granted the motion to dismiss.
o Respondents had never claimed nor established that they have been in possession of the property
and that they did not present any evidence to show that petitioner has not been in possession of the
property either, the RTC applied the doctrine that an action to quiet title prescribes where the plaintiff
is not in possession of the property.
o There was no implied or constructive trust on the part of Cipriano who had inaccurately claimed to
be the sole heir of Pablo in the deed of extrajudicial settlement of estate. As the prescriptive period
for reconveyance of a fraudulently registered real property is ten (10) years reckoned from the date
of the issuance of the title to Guaranteed Homes, the trial court held that the action for reconveyance
had already prescribed with the lapse of more than 28 years.
 CA: Reversed RTC. In ordering the reinstatement of the complaint, the appellate court ruled that the
averments in respondents complaint before the RTC make out a case for quieting of title which has not
prescribed because possession over the property was sufficiently alleged in the complaint which stated that
neither petitioner nor the Rodolfo spouses ever had possession of the disputed property as a number of the
Pablo heirs either had been (still are) in actual, continuous and adverse possession thereof or had been
enjoying (still are enjoying) the use thereof.

Issue: Whether the Motion to Dismiss is proper in this case.

Held: YES. Respondents complaint does not state a cause of action against petitioner.
 First, the complaint does not allege any defect with the TCT in the name of the spouses Rodolfo or any
circumstance from which it could reasonably be inferred that Guaranteed Homes had any actual knowledge
of facts that would impel it to make further inquiry into the title of the spouses Rodolfo.
o It is basic that a person dealing with registered property need not go beyond, but only has to rely on,
the title of his predecessor-in-interest.
o Since "the act of registration is the operative act to convey or affect the land insofar as third persons
are concerned, it follows that where there is nothing in the certificate of title to indicate any cloud or
vice in the ownership of the property, or any encumbrance thereon, the purchaser is not required to
 explore farther than what the Torrens title upon its face indicates in quest for any hidden defect or
inchoate right that may subsequently defeat his right thereto.
o If the rule were otherwise, the efficacy and conclusiveness of the certificate of title which the Torrens
system seeks to insure would entirely be futile and nugatory. The public shall then be denied of its
foremost motivation for respecting and observing the Torrens system of registration.
o The alleged non-signature by the Register of Deeds does not affect the validity of TCT No. T-8241
since he signed TCT No. T- 8242 and issued both titles on the same day. There is a presumption of
regularity in the performance of official duty. The presumption is further bolstered by the fact that
TCT No. T-8241 was certified to be on file with the Registry of Deeds and registered in the name of
Cipriano.
o It is enough that petitioner had examined the latest certificate of title which in this case was issued in
the name of the immediate transferor, the spouses Rodolfo. The purchaser is not bound by the
original certificate but only by the certificate of title of the person from whom he had purchased the
property.
 Second, while the Extrajudicial Settlement of a Sole Heir and Confirmation of Sales executed by Cipriano
alone, despite the existence of other heirs, is not binding on them, it still has operative effect under Section
44 of the Property Registration Decree, which provides: Every registered owner receiving a certificate of title
in pursuance of a decree of registration, and every subsequent purchaser of registered land taking a
certificate of title for value and in good faith, shall hold the same free from all encumbrances except those
noted on said certificate and any of the following encumbrances which may be subsisting.
o Even assuming arguendo that the extrajudicial settlement was a forgery, the Court still has to uphold
the title of petitioner. The case law is that although generally a forged or fraudulent deed is a nullity
and conveys no title, there are instances when such a fraudulent document may become the root of
a valid title. And one such instance is where the certificate of title was already transferred from the
name of the true owner to the forger, and while it remained that way, the land was subsequently sold
to an innocent purchaser. For then, the vendee had the right to rely upon what appeared in the
certificate
o The Court cannot give credence to respondents claims that the Extrajudicial Settlement of a Sole
Heir and Confirmation of Sales was not registered and that OCT No. 404 was not cancelled by the
Register of Deeds. In this case, the Register of Deeds of Zambales certified that the extrajudicial
settlement was recorded.
o Registration in the public registry is notice to the whole world. Every conveyance, mortgage, lease,
lien, attachment, order, judgment, instrument or entry affecting registered land shall be, if registered,
filed or entered in the Office of the Register of Deeds of 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.
 Third, respondents cannot make out a case for quieting of title since OCT No. 404 had already been
cancelled. Respondents have no title to anchor their complaint on. Title to real property refers to that upon
which ownership is based. It is the evidence of the right of the owner or the extent of his interest, by which
means he can maintain control and, as a rule, assert right to exclusive possession and enjoyment of the
property.
o The other heirs of Pablo should have filed an action for reconveyance based on implied or
constructive trust within ten (10) years from the date of registration of the deed or the date of the
issuance of the certificate of title over the property. The legal relationship between Cipriano and the
other heirs of Pablo is governed by Article 1456 of the Civil Code which provides that if a property is
acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of
an implied trust for the benefit of the person from whom the property comes.
 Fourth, respondents claim against the Assurance Fund also cannot prosper. Section 101 of P.D. No. 1529
clearly provides that the Assurance Fund shall not be liable for any loss, damage or deprivation of any right
or interest in land which may have been caused by a breach of trust, whether express, implied or
constructive. Even assuming arguendo that they are entitled to claim against the Assurance Fund, the
respondents claim has already prescribed since any action for compensation against the Assurance Fund
must be brought within a period of six (6) years from the time the right to bring such action first occurred,
which in this case was in 1967 (or when TCT issued under Rodolfo’s name).
MAGAY vs. ESTIANDAN (G.R. No. L-28975. February 27, 1976)

FACTS: Venancia Magay bought the land in question from her mother-in-law, Soledad delos Reyes. A TCT was
issued in Magay’s name. However, Eugene Estiandan has constructed two houses in the land in question. Before
buying the lot, Magay already sent two letters to vacate, and after buying the lot, sent two more letters to vacate.
Magay then declared the property in question for purposes of taxation and has paid real property taxes, and then
filed an accion publiciana against Estiandan.

For the respondent:

RTC: Ruled in favor of Magay and against ordered Estiandan to vacate and pay back rentals.

Estiandan directly appealed the case to the Supreme Court on the representation that only questions of law are
involved. (Ruled 45)

ISSUE:
(1) Was the remedy proper?
(2) Did the CFI (now RTC) acquire jurisdiction? (Not important)

HELD:
(1) No. It is well-settled that a torrens title cannot be collaterally attacked. The issue on the validity of the title
can only be raised in an action expressly instituted for that purpose.
 Even assuming that the land in question is still part of the public domain, then the appellant is not the
proper party to institute the reversion of the land but it must be the Solicitor General in the name of the
Republic of the Philippines.
(2) Yes. The lower court did not commit any error in declaring that plaintiff-appellee’s complaint is actually an
accion publiciana rather than one for unlawful detainer. Jurisdiction over the subject matter is determined by
the allegations of the complaint, irrespective of whether or not the plaintiff is entitled to recover upon all or
some of the claims asserted therein — a matter that can be resolved only after and as a result of the trial.
Nor may the jurisdiction of the court be made to depend upon the defenses set up in the answer or upon the
motion to dismiss, for, were we to be governed by such rule, the question of jurisdiction could depend almost
entirely upon the defendant.

LOCSIN vs. HIZON (G.R. No. 204369, September 17, 2014)

FACTS: Petitioner Enriqueta M. Locsin (Locsin) was the registered owner of a 760-sq.m. in Don Antonio Heights
Subdivision, Quezon City.

 1992: She filed an ejectment case against Aceron. Eventually, the two entered into a compromise
agreement. Locsin later went to the United States without knowing whether Aceron has complied with
his part of the bargain under the compromise agreement. In spite of her absence, however, she
continued to pay the real property taxes on the subject lot.
 1994: After discovering that her copy of her TCT was missing, Locsin filed a petition for administrative
reconstruction to secure a new one (TCT No. RT-97467).
 Early 2002: she then requested her counsel to check the status of the subject lot. It was then that they
discovered the following:
 o One Marylou Bolos (Bolos) had TCT No. RT-97467 cancelled and secured a new one by
registering a Deed of Absolute Sale dated November 3, 1979 allegedly executed by Locsin.
o Bolos later sold the subject lot to Bernardo Hizon for PhP1.5 million, but it was titled under his
SON, Carlos Hizon, on August 12, 1999.
o Bernardo, claiming to be the owner of the property, filed a Motion for Issuance of Writ of
Execution for the enforcement of the court-approved compromise agreement in the previous
ejectment case.
 May 9, 2002: Locsin sent Carlos a letter requesting the return of the property since her signature in the
purported deed of sale in favor of Bolos was a forgery. In a letter-reply Carlos denied Locsin’s request,
claiming that he was unaware of any defect or flaw in Bolos’ title and he is, thus, an innocent purchaser
for value and good faith.
 June 2002: Locsin met with Bernardo for a possibility of compromise.
 BUT, in July 2002: Locsin learned that Carlos had already sold the property for PhP 1.5 million to his
sister and her husband (Spouses Guevara). But it was as early as May 24, 2002 when a new TCT was
issued in their names.
 Spouses Guevara then immediately mortgaged the said property to secure a PhP2.5 million loan/credit
facility with Damar Credit Corporation (DCC).
 Locsin filed an action for reconveyance, annulment of title, cancellation of the mortgage lien annotated
thereon, and damages

RTC: Dismissed the case for failure to prove forgery; transfers were regular; and, Bernardo, Carlos, and the
spouses Guevara are all buyers in good faith.
CA: There was forgery but buyers all in good faith; hence, Locsin can no longer recover the subject lot.

ISSUES:
(1) Whether Mirror Doctrine applies.
(2) Whether or not respondents are innocent purchasers for value.
(3) Whether Locsin is entitled to nominal damages.

HELD:
(1) No, mirror doctrine does not apply.
 An innocent purchaser for value is one who buys the property of another without notice that some
other person has a right to or interest in it, and who pays a full and fair price at the time of the
purchase or before receiving any notice of another person’s claim. As such, a defective title––or one
the procurement of which is tainted with fraud and misrepresentation––may be the source of a
completely legal and valid title, provided that the buyer is an innocent third person who, in good faith,
relied on the correctness of the certificate of title, or an innocent purchaser for value.
 Complementing this is the mirror doctrine which echoes the doctrinal rule that every person dealing
with registered land may safely rely on the correctness of the certificate of title issued therefor and is
in no way obliged to go beyond the certificate to determine the condition of the property. The
recognized exceptions to this rule are stated as follows: [A] person dealing with registered land has a
right to rely on the Torrens certificate of title and to dispense with the need of inquiring further except
when the party has actual knowledge of facts and circumstances that would impel a reasonably
cautious man to make such inquiry or when the purchaser has knowledge of a defect or the lack of
title in his vendor or of sufficient facts to induce a reasonably prudent man to inquire into the status
of the title of the property in litigation. The presence of anything which excites or arouses
suspicion should then prompt the vendee to look beyond the certificate and investigate the
 title of the vendor appearing on the face of said certificate. One who falls within the
exception can neither be denominated an innocent purchaser for value nor a purchaser in
good faith and, hence, does not merit the protection of the law.
 Thus, in Domingo Realty, Inc. v. CA, we emphasized the need for prospective parties to a contract
involving titled lands to exercise the diligence of a reasonably prudent person in ensuring the legality
of the title, and the accuracy of the metes and bounds of the lot embraced therein, by undertaking
precautionary measures, such as:
 Verifying the origin, history, authenticity, and validity of the title with the Office of the Register
of Deeds and the Land Registration Authority;
 Engaging the services of a competent and reliable geodetic engineer to verify the boundary,
metes, and bounds of the lot subject of said title based on the technical description in the
said title and the approved survey plan in the Land Management Bureau;
 Conducting an actual ocular inspection of the lot;
 Inquiring from the owners and possessors of adjoining lots with respect to the true and legal
ownership of the lot in question;
 Putting up of signs that said lot is being purchased, leased, or encumbered; and,
 Undertaking such other measures to make the general public aware that said lot will be
subject to alienation, lease, or encumbrance by the parties.
 In the case at bar, Bolos’ certificate of title was concededly free from liens and encumbrances on its
face. However, the failure of Carlos and the spouses Guevara to exercise the necessary level of
caution in light of the factual milieu surrounding the sequence of transfers from Bolos to
respondents bars the application of the mirror doctrine.

(2) Carlos and Guevara are not innocent purchasers for value. These circumstances, taken altogether, strongly
indicate that Carlos and the spouses Guevara failed to exercise the necessary level of caution expected of a
bona fide buyer and even performed acts that are highly suspect:
 Re: Carlos
 First, Bernardo negotiated with Bolos for the property as Carlos’ agent. Hence, consistent
with the rule that the principal is chargeable and bound by the knowledge of, or notice to, his
agent received in that capacity.
 Bernardo knew of the following:
1. Bolos, from whom he purchased the subject property, never acquired possession
over the lot. In fact, Bernardo admitted having knowledge of Aceron’s lot possession
as well as the compromise agreement between petitioner and Aceron.
2. Bolos’ purported Deed of Sale was executed on November 3, 1979 but the ejectment
case commenced by Locsin against Aceron was in 1992, or thirteen (13) years after
the property was supposedly transferred to Bolos.
3. The MTC Judgment referred to Locsin as the registered owner.
 Having knowledge of the foregoing facts, Bernardo and Carlos should have been impelled to
investigate the reason behind the arrangement. They should have been pressed to inquire
into the status of the title of the property in litigation in order to protect Carlos’ interest. It
should have struck them as odd that it was Locsin, not Bolos, who sought the recovery of
possession by commencing an ejectment case against Aceron, and even entered into a
compromise agreement with the latter years after the purported sale in Bolos’ favor. Instead,
Bernardo and Carlos took inconsistent positions when they argued for the validity of the
transfer of the property in favor of Bolos, but in the same breath prayed for the enforcement
of the compromise agreement entered into by Locsin.
 At this point it is well to emphasize that entering into a compromise agreement is an act of
strict dominion. If Bolos already acquired ownership of the property as early as 1979, it
should have been her who entered into a compromise agreement with Aceron in 1993, not
her predecessor-in-interest, Locsin, who, theoretically, had already divested herself of
ownership thereof.
 Re: Sps. Guevara
  As regards the transfer of the property from Carlos to the spouses Guevara, We find the
existence of the sale highly suspicious. For one, there is a dearth of evidence to support the
respondent spouses’ position that the sale was a bona fide transaction. Even if we
repeatedly sift through the evidence on record, still we cannot find any document, contract,
or deed evidencing the sale in favor of the spouses Guevara.
 Furthermore, and noticeably enough, the transfer from Carlos to the spouses Guevara was
effected only fifteen (15) days after Locsin demanded the surrender of the property from
Carlos, i.e., May 9 to May 24.
 It was impossible for Sps. Guevara not to know of Locsin’s claim of ownership since Lourdes
and Carlos are siblings, and it was Bernardo, their own father, who was their agent.
 There was lack of interest in protecting themselves in the case. What they did was to simply
appoint Bernardo as their attorney-in-fact to handle the situation and never bothered
acquainting themselves with the developments in the case.
 There is also strong reason to believe that even the mortgage in favor of DCC was a mere
ploy to make it appear that the Sps. Guevara exercised acts of dominion over the subject
property. This is so considering the proximity between the property’s registration in their
names and its being subjected to the mortgage. Most telling is that the credit line secured by
the mortgage was never used by the spouses, resulting in the mortgage’s cancellation and
the exclusion of DCC as a party in the Civil Case.

(3) Yes. Under prevailing jurisprudence, nominal damages are “recoverable where a legal right is technically
violated and must be vindicated against an invasion that has produced no actual present loss of any kind or
where there has been a breach of contract and no substantial injury or actual damages whatsoever have
been or can be shown.”
 In the case at bar, this Court recognizes that petitioner was unduly deprived of her ownership rights
over the property, and was compelled to litigate for its recovery, for almost ten (10) years. Clearly,
this could have entitled her to actual or compensatory damages had she quantified and proved,
during trial, the amounts which could have accrued in her favor, including commercial fruits such as
reasonable rent covering the pendency of the case. Nonetheless, petitioner’s failure to prove actual
or compensatory damages does not erase the fact that her property rights were unlawfully invaded
by respondents, entitling her to nominal damages.
 As to the amount to be awarded, it bears stressing that the same is addressed to the sound
discretion of the court, taking into account the relevant circumstances. Considering the length of time
petitioner was deprived of her property and the bad faith attending respondents’ actuations in the
extant case, we find the amount of P75,000 as sufficient nominal damages.
 Meanwhile, moral and exemplary damages not proper.