CHAVEZ V.

PUBLIC ESTATES AUTHORITY

384 SCRA 152

FACTS:
President Marcos through a presidential decree created PEA, which was tasked with the development,
improvement, and acquisition, lease, and sale of all kinds of lands. The then president also transferred to PEA the
foreshore and offshore lands of Manila Bay under the Manila-Cavite Coastal Road and Reclamation Project.

Thereafter, PEA was granted patent to the reclaimed areas of land and then, years later, PEA entered into a JVA
with AMARI for the development of the Freedom Islands. These two entered into a joint venture in the absence of
any public bidding.

Later, a privilege speech was given by Senator President Maceda denouncing the JVA as the grandmother of
all scams. An investigation was conducted and it was concluded that the lands that PEA was conveying to AMARI were
lands of the public domain; the certificates of title over the
Freedom Islands were void; and the JVA itself was illegal. This prompted Ramos to form an investigatory committee on
the legality of the JVA.

Petitioner now comes and contends that the government stands to lose billions by the conveyance or sale of
the reclaimed areas to AMARI. He also asked for the full disclosure of the renegotiations happening between the
parties.

ISSUE:
W/N stipulations in the amended JVA for the transfer to AMARI of the lands, reclaimed or to be reclaimed, violate
the Constitution.

HELD:
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.

The 1987 Constitution recognizes the Regalian doctrine. It declares that all natural resources are owned by the State
and except for alienable agricultural lands of the public domain, natural resources cannot be alienated.

The Amended JVA covers a reclamation area of 750 hectares. Only 157.84 hectares of the 750 hectare reclamation
project have been reclaimed, and the rest of the area are still submerged areas forming part of Manila Bay. Further, it is
provided that AMARI will reimburse the actual costs in reclaiming the areas of land and it will shoulder the other
reclamation costs to be incurred.

The foreshore and submerged areas of Manila Bay are part of the lands of the public domain, waters and other
natural resources and consequently owned by the State. As such, foreshore and submerged areas shall not be
alienable unless they are classified as agricultural lands of the public domain. The mere reclamation of these areas
by the PEA doesnt convert these inalienable natural resources of the State into alienable and disposable lands of
the public domain. There must be a law or presidential
proclamation officially classifying these reclaimed lands as alienable and disposable if the law has reserved
them for some public or quasi-public use.

NPC vs. Ibrahim

Facts:

Ibrahim owns a parcel of land located in Lanao del Norte.

In 1978, NAPOCOR took possession of the sub-terrain area of the land and constructed
underground tunnels on the said property.
The tunnels were apparently being used by NAPOCOR in siphoning the water of Lake Lanao
and in the operation of NAPOCORs Agus projects.
In 1991, Maruhom (one of the co-heirs of Ibrahim) requested Marawi City Water District for a
permit to construct or install a motorized deep well on the parcel of land but it was rejected on
 the grounds that the construction would cause danger to lives and property by reason of the
presence of the underground tunnels.
Maruhom demanded NAPOCOR to pay damages and to vacate the sub-terrain portion of the
land.

Issue: WON Ibrahim is the rightful owner of the sub-terrain area of the land.
If yes, are they entitled to the payment of just compensation.

Held: YES. The sub-terrain portion of the property belongs to Ibrahim.

The Supreme Court cited Article 437 of the Civil Code which provides that: The owner of a parcel of
land is the owner of its surface and of everything under it, and he can construct thereon any works or
make any plantations and excavations which he may deem proper, without detriment to servitudes
and subject to special laws and ordinances. xxx

Hence, the ownership of land extends to the surface as well as to the subsoil under it. Therefore,
Ibrahim owns the property as well as the sub-terrain area of the land where the underground tunnels
were constructed.

On the issue of just compensation, the Supreme Court also said that Ibrahim should be paid a just
compensation.

Ibrahim could have dug upon their property and built motorized deep wells but was prevented from
doing so by the authorities because of the construction of the tunnels underneath the surface of the
land.

Ibrahim still had a legal interest in the sub-terrain portion insofar as they could have excavated the
same for the construction of the deep wells. It has been shown that the underground tunnels have
deprived the plaintiffs of the lawful use of the land and considerably reduced its value.

It was held that: If the government takes property without expropriation and devotes the property to
public use, after many years, the property owner may demand payment of just compensation in the
event restoration of possession is neither convenient nor feasible. This is in accordance with the
principle that persons shall not be deprived of their property except by competent authority and for
public use and always upon payment of just compensation.

NPC v. Ibrahim, et al., G.R. No. 168732, June 29, 2007

The NPC constructed underground tunnels on the property of the respondents without their
knowledge and consent and without any expropriation proceeding. It contended that it constructed
an easement on the property. Was there taking of the property considering that the owners were
deprived of their beneficial use and enjoyment of the same, hence, entitled to just compensation?

Yes. The manner in which the easement was created by the NPC, violated the due process rights of the owners as it
was without notice and indemnity to them and did not go through proper expropriation proceedings. NPC could
have, at any time, validly exercised the power of eminent domain to acquire the easement over the property as this
power encompasses not only the taking or appropriation of title to and possession of the expropriated property but
likewise covers even the imposition of a mere burden upon the owner of the condemned property. (Rep. v. PLDT,
136 Phil. 20 (1969)). Significantly, though, landowners cannot be deprived of their right over their land until
expropriation proceedings are instituted in court. The court must then see to it that the taking is for pubic use, that
there is payment of just compensation and that there is due process of law.

In disregarding this procedure and failing to recognize the owners ownership of the sub-terrain portion, NPC took
a risk and exposed itself to greater liability with the passage of time. It must be emphasized that the
acquisition of the easement is not without expense. The underground tunnels imposed limitations on the
owners use of the property for an indefinite period and deprived them of its ordinary use. The owners are clearly
entitled to the payment of just compensation. Notwithstanding the fact that NPC only occupied the
sub-terrain portion, it is liable to pay not merely an easement fee but rather the full compensation
for the land. This is so because, the nature of the easement practically deprived the owners of its
normal beneficial use. The owners, as the owners of the property thus expropriated, are entitled to a just
compensation which should be neither more nor less, whenever it is possible to make the assessment, than the
money equivalent of said property. (NPC v. Ibrahim, et al., G.R. No. 168732, June 29, 2007).

Valuation of the property.

NPC contended that if ever it is liable, it should be made to pay the value of the land from the time it
constructed the tunnels. Is the contention correct? Why?

No. To it to use the date it constructed the tunnels as the date of valuation would be grossly unfair. First, it did not
enter the land under warrant or color of legal authority or with intent to expropriate the same. It did not notify the
owners and wrongly assumed that it had the right to dig the tunnels under their property. Secondly, the
improvements introduced in no way contributed to an increase in the value of the land. The valuation should be
based at the time of the discovery of the construction of the underground tunnels. (NPC v. Ibrahim, et
al., G.R. No. 168732, June 29, 2007).

It is undisputed that there is a legal easement of right-of-way in favor of the Republic. Andayas
transfer certificates of title contained the reservation that the lands covered thereby are subject to
the provisions of the Land Registration Act and the Public Land Act. Section 112 of the Public Land
Act provides that land granted by patent shall be subject to a right-of-way not exceeding 60 meters
in width for public highways, irrigation ditches, aqueducts, and other similar works of the
government or any public enterprise, free of charge, except only for the value of the improvements
existing thereon that may be affected. In view of this, the Court of Appeals declared that all Republic
needs to do is to enforce such right without having to initiate expropriation proceedings and
without having to pay any just compensation. Hence, the Republic may appropriate the 701 square
meters necessary for the construction of the floodwalls without paying for it. Is the Republic liable
for just compensation if in enforcing the legal easement of right-of-way on a property, the
remaining area would be rendered unusable and uninhabitable?

Yes, it is liable to pay consequential damages if in enforcing the legal easement on Andayas property, the remaining
area would be rendered unusable and uninhabitable. Taking, in the exercise of the power of eminent
domain, occurs not only when the government actually deprives or dispossess the property owner
of his property or of its ordinary use, but also when there is a practical destruction or material
impairment of the value of his property. Using this standard, there was undoubtedly a taking of the remaining
area of Andayas property. True, no burden was imposed thereon and Andaya still retained title and possession of
the property. But, the nature and the effect of the floodwalls would deprive Andaya of the normal use of the
remaining areas. It would prevent ingress and egress to the property and turn it into a catch basin for the
floodwaters coming from the Agusan River.

For this reason, Andaya is entitled to payment of just compensation, which must be neither more
nor less than the monetary equivalent of the land. One of the basic principles enshrined in our Constitution
is that no person shall be deprived of his private property without due process of law; and in expropriation cases, an
essential element of due process is that there must be just compensation whenever private property is taken for
public use. Noteworthy, Section 9, Article III of our Constitution mandates that private property shall not be taken
for public use without just compensation. (Rep. v. Lim, G.R. No. 161656, June 29, 2005, 462 SCRA 265; Rep. v.
Andaya, G.R. No. 160656, June 15, 2007).

Spouses Custodio vs. CA

Spouses Custodio vs. CA, GR No. 116100 February 9, 1996
Facts:

Mabasa owns a parcel of land with a 2 door apartment. The property is surrounded by other immovables.
When Mabasa bought the land, there were tenants who were occupying the property. One of the tenants
vacated the land. Mabasa saw that thhere had been built an adobe fence in the apartment in the first
passageway that made it narrower. The fence was constructed by the Santoses. Morato constructed her fence
and extended it to the entire passageway, therefore, the passageay was enclosed. The case was broguth to the
trial court and ordered the custodios and the Santoses to give Mabasa a permanet ingress and eggress to the
punlic street and asked Mabasa to pay Custodios and Santoses for damages.

Issue:
Whether or not Mabasa has the right to demand for a right of way

Ruling:
Yes, Mabasa has the right to demand for a right of way. A person has a right to the natural use and enjoyment
of his own property, according to his pleasure, for all the purposes to which such property is usually applied. As
a general rule, therefore, there is no cause of action for acts done by one person upon his own property in a
lawful and proper manner, although such acts incidentally cause damage or an unavoidable loss to another, as
such damage or loss is damnum absque injuria. When the owner of property makes use thereof in the general
and ordinary manner in which the property is used, such as fencing or enclosing the same as in this case,
nobody can complain of having been injured, because the inconvenience arising from said use can be
considered as a mere consequence of community life.

Facts:
Respondents owned a parcel of land wherein a two-door apartment was erected. Said property was surrounded
by other immovables owned by petitioners, spouses Custodio and spouses Santos. As an access to P. Burgos
Street from the subject property, there are two possible passageways. The first passageway is approximately
one meter wide and is about 20 meters distant from Mabasas residence to P. Burgos Street. Such path is
passing in between the previously mentioned row of houses. The second passageway is about 3 meters in width
and length from plaintiff Mabasas residence to P. Burgos Street; it is about 26 meters. In passing thru said
passageway, a less than a meter wide path through the septic tank and with 5-6 meters in length, has to be
traversed. Petitioners constructed an adobe fence in the first passageway making it narrower in width. Said
adobe fence was first constructed by defendants Santoses along their property which is also along the first
passageway. Defendant Morato constructed her adobe fence and even extended said fence in such a way that
the entire passageway was enclosed. As a result, the tenants left the apartment because there was no longer a
permanent access to the public street. Respondents then filed an action for the grant of an easement of right of
way. The trial court ordered the petitioner to give respondents a permanent access to the public street and that
in turn, the respondent will pay a sum of Php 8,000.00 to the petitioner as an indemnity for the permanent use
of the passageway. On appeal by the respondent to the CA, the decision of the trial court was affirmed, such
that a right of way and an award of actual, moral and exemplary damages were given to the respondents.
Hence, this petition.

Issue:
Whether or not the award of damages is proper?

Held:
No. To warrant the recovery of damages, there must be both a right of action for a legal wrong inflicted by the
defendant, and damage resulting to the plaintiff therefrom. Wrong without damage, or damage without wrong,
does not constitute a cause of action, since damages are merely part of the remedy allowed for the injury caused
by a breach or wrong. There is a material distinction between damages and injury. Injury is the illegal invasion
of a legal right; damage is the loss, hurt, or harm which results from the injury, and damages are the
recompense or compensation awarded for the damage suffered. Thus, there can be damage without injury in
those instances in which the loss or harm was not the result of a violation of a legal duty. These situations are
often called damnum absque injuria. In order that a plaintiff may maintain an action for the injuries of which
he complains, he must establish that such injuries resulted from a breach of duty which the defendant owed to
the plaintiff. There must be a concurrence of injury to the plaintiff and legal responsibility by the person
causing it.

In the instant case, although there was damage, there was no legal injury. Contrary to the claim of respondents,
petitioners could not be said to have violated the principle of abuse of right. In order that the principle of abuse
of right provided in Article 21 of the Civil Code can be applied, it is essential that the following requisites
concur: (1) The defendant should have acted in a manner that is contrary to morals, good customs or public
policy; (2) The acts should be willful; and (3) There was damage or injury to the plaintiff. The act of petitioners
in constructing a fence within their lot is a valid exercise of their right as owners, hence not contrary to morals,
good customs or public policy. The law recognizes in the owner the right to enjoy and dispose of a thing,
without other limitations than those established by law. It is within the right of petitioners, as owners, to
enclose and fence their property. Article 430 of the Civil Code provides that (e)very owner may enclose or
fence his land or tenements by means of walls, ditches, live or dead hedges, or by any other means without
detriment to servitudes constituted thereon.
At the time of the construction of the fence, the lot was not subject to any servitudes. There was no easement of
way existing in favor of private respondents, either by law or by contract. The fact that respondents had no
existing right over the said passageway is confirmed by the very decision of the trial court granting a
compulsory right of way in their favor after payment of just compensation. It was only that decision which gave
private respondents the right to use the said passageway after payment of the compensation and imposed a
corresponding duty on petitioners not to interfere in the exercise of said right. The proper exercise of a lawful
right cannot constitute a legal wrong for which an action will lie, although the act may result in damage to
another, for no legal right has been invaded. One may use any lawful means to accomplish a lawful purpose and
though the means adopted may cause damage to another, no cause of action arises in the latters favor. An
injury or damage occasioned thereby is damnum absque injuria. The courts can give no redress for hardship to
an individual resulting from action reasonably calculated to achieve a lawful means.

CHENG V. GENATO (December 29, 1998)

FACTS: Respondent Genato entered a contract to sell to spouses Da Jose pertaining to his property in Bulacan.
The contract made in public document states that the spouses shall pay the down payment and 30 days after
verifying the authenticity of the documents, they shall pay the remaining purchase price. Da Jose spouses was
not able to finish verifying the documents and as such asked for a 30 day extension. Pending the extension and
without notice to the spouses, Genato made a document for the annulment of the contract. Petitioner Cheng
expressed interest over the property and paid 50K check with the assurance that the contract between Genato
and the spouses Da Jose will be annulled. Da Jose spouses protested with the annulment and persuaded
Genato to continue the contract. Genato returned the check to Cheng and hence, this petition.
HELD: The contract between Genato and spouses Da Jose was a contract to sell which is subject to a
suspensive condition. Thus, there will be no contract to speak of, if the obligor failed to perform the suspensive
condition which enforces a juridical relation. Obviously, the foregoing jurisprudence cannot be made to apply
to the situation in the instant case because no default can be ascribed to the Da Jose spouses since the 30-day
extension period has not yet expired. Even assuming that the spouses defaulted, the contract also cannot be
validly rescinded because no notice was given to them. Thus, Cheng's contention that the Contract to Sell
between Genato and the Da Jose spouses was rescinded or resolved due to Genato's unilateral rescission finds
no support in this case. The contract between Genato and Cheng is a contract to sell not a contract of sale. But
But even assuming that it should be treated as a conditional contract of sale, it did not acquire any obligatory
force since it was subject to a suspensive condition that the earlier contract to sell between Genato and the Da
Jose spouses should first be cancelled or rescinded. Art.1544 should apply because for not only was the contract
between herein respondents first in time; it was also registered long before petitioner's intrusion as a second
buyer (PRIMUS TEMPORE, PORTIOR JURE). (Spouses made annotation on the title of Genato).
Since Cheng was fully aware, or could have been if he had chosen to inquire, of the rights of the Da Jose
spouses under the Contract to Sell duly annotated on the transfer certificates of titles of Genato, it now
becomes unnecessary to further elaborate in detail the fact that he is indeed in bad faith in entering into such
agreement.
Capitol Subdivisions vs. Province of Negros Oriental 7 SCRA 60 (1963)
FACTS: Lot 378, which is the subject matter of this case, is part of Hacienda Madalagan, registered under the
name of Agustin Amenabar and Pilar Amenabar, covered by Original Certificate of Title No. 1776 issued in the
name of the aforementioned in 1916. Sometime in 1920, the Amenabars sold the aforementioned Hacienda to
Jose Benares for the purchase price of P300,000, payable in instalments. In 1924, the Original Certificate of
Title issued in the name of the Amenabars was cancelled, and in lieu thereof, Benares obtained a Transfer
Certificate of Title under his name. Meanwhile, in 1921, Benares mortgaged the Hacienda including Lot 378 to
Bacolod-Murcia Milling Co. And then later in 1926, he again mortgaged the Hacienda, including said Lot 378,
on the Philippine National Bank, subject to the first mortgage held by the Bacolod-Murcia Milling Co. These
transactions were duly recorded in the office of the Register of Deeds of Negros Occidental. The mortgage in
favor of the Bank was subsequently foreclosed and the Bank acquired the Hacienda, including Lot 378, as
purchaser at the foreclosure sale. Accordingly, the TCT in the name of Benares was cancelled and another TCT
was issued in the name of the Bank. In 1935, the Bank agreed to sell the Hacienda to the son of Jose Benares,
Carlos Benares, for the sum of P400,000, payable in annual installments, subject to the condition that the title
will remain with the Bank until full payment. Thereafter, Carlos Benares transferred his rights, under his
contract with the Bank, to plaintiff herein, which completed the payment of the installments due to the Bank in
1949. Hence, the Bank executed the corresponding deed of absolute sale to the plaintiff and a transfer
certificate of title covering Lot 378 was issued. It should be noted that, despite the acquisition of the Hacienda
in 1934 by the Bank, the latter did not take possession of the property for Jose Benares claimed to be entitled to
retain it under an alleged right of lease. For this reason, the deed of promise to sell, executed by the Bank in
favour of Carlos P. Benares, contained a caveat emptor stipulation. When, upon the execution of the deed of
absolute sale 1949, plaintiff took steps to take possession the Hacienda and it was discovered that Lot 378 was
the land occupied by the Provincial Hospital of Negros Occidental. Immediately thereafter, plaintiff made
representations with or on October 4, 1949, plaintiff made representations with the proper officials to clarify
the status of said occupation. Not being satisfied with the explanations given by said officials, it brought the
present action on June 10, 1950. In its answer, defendant maintained that it had acquired the lot in question in
the year 1924-1925 through expropriation proceedings and that it took possession of the lost and began the
construction of the provincial hospital thereon. They further claimed that for some reason beyond their
comprehension, title was never transferred in its name and it was placed in its name only for assessment
purposes. And that defendant acted in bad faith in purchasing the lot knowing that the provincial hospital was
situated there and that he did not declare such property for assessment purposes only until 1950.
ISSUE: Whether or not defendant herein had acquired the lot in question in the aforementioned expropriation
proceedings.
HELD: The Court held that defendant was not able to sufficiently prove that they have acquired the legal title
over Lot 378. Several circumstances indicate that the expropriation had not been consummated. First, there,
the entries in the docket pertaining to the expropriation case refer only to its filing and the publication in the
newspaper of the notices. Second, there was an absence of a deed of assignment and of a TCT in favour of the
Province as regards Lot 378. Third, the property was mortgaged to Bacolod-Murcia Milling Co. Lot 378 could
not have been expropriated without the intervention of the Milling Co. And yet, the latter was not made a party
in the expropriation proceedings. And fourth, a second mortgage was constituted in favour of the Back, which
would not have accepted the mortgage had Lot 378 not belonged to the mortgagor. Neither could said lot have
been expropriated without the Banks knowledge and participation. Furthermore, in the deed executed by
the Bank promising to sell the Hacienda Mandalagan to Carlos Benares, it was explicitly stated that some
particular lots had been expropriated by the Provincial Government of Negros Occidental, thus indicating, by
necessary implication, that Lot 378 had not been expropriated.
Lacbayan Vs. Samoy
Socialize Us
Facts:

Betty Lacbayan (petitioner) and Bayani S. Samoy (respondent) had an illicit relationship.
During their relationship, they, together with three more incorporators, were able to establish a manpower
services company.
The company acquired five parcels of land were registered in petitioner and respondents names, ostensibly as
husband and wife.
When their relationship turned sour, they decided to divide the said properties and terminate their business
partnership by executing a Partition Agreement.
Initially, respondent agreed to petitioners proposal that the properties in Malvar St. and Don Enrique Heights
be assigned to the latter, while the ownership over the three other properties will go to respondent.
However, when Lacbayan wanted additional demands to be included in the partition agreement, Samoy
refused.
Feeling aggrieved, petitioner filed a complaint for judicial partition of the said properties.
Petitioners contention: She claimed that they started to live together as husband and wife in 1979 without the
benefit of marriage and worked together as business partners, acquiring real properties amounting to
P15,500,000.00.
Respondents contention: He purchased the properties using his own personal funds.
RTC and CA ruled in favor or respondent.

Issues:
1. WON an action for partition precludes a settlement on the issue of ownership.
2. Would a resolution on the issue of ownership subject the Torrens title issued over the disputed realties to a
collateral attack?

Held:

1. No.

While it is true that the complaint involved here is one for partition, the same is premised on the existence or
non-existence of co-ownership between the parties. Until and unless this issue of co-ownership is definitely and
finally resolved, it would be premature to effect a partition of the disputed properties. More importantly, the
complaint will not even lie if the claimant, or petitioner in this case, does not even have any rightful interest
over the subject properties.

A careful perusal of the contents of the so-called Partition Agreement indicates that the document involves
matters which necessitate prior settlement of questions of law, basic of which is a determination as to whether
the parties have the right to freely divide among themselves the subject properties.

2. No.

There is no dispute that a Torrens certificate of title cannot be collaterally attacked, but that rule is not material
to the case at bar. What cannot be collaterally attacked is the certificate of title and not the title itself. The
certificate referred to is that document issued by the Register of Deeds known as the TCT. In contrast, the title
referred to by law means ownership which is, more often than not, represented by that document.

Moreover, placing a parcel of land under the mantle of the Torrens system does not mean that ownership
thereof can no longer be disputed. Mere issuance of the certificate of title in the name of any person does not
foreclose the possibility that the real property may be under co-ownership with persons not named in the
certificate, or that the registrant may only be a trustee, or that other parties may have acquired interest over the
property subsequent to the issuance of the certificate of title. Needless to say, registration does not vest
ownership over a property, but may be the best evidence thereof.

Other topic:

Whether respondent is estopped from repudiating co-ownership over the subject realties.

YES. Petitioner herself admitted that she did not assent to the Partition Agreement after seeing the need to
amend the same to include other matters. Petitioner does not have any right to insist on the contents of an
agreement she intentionally refused to sign.
Moreover, to follow petitioners argument would be to allow respondent not only to admit against his own
interest but that of his legal spouse as well, who may also be lawfully entitled co-ownership over the said
properties.

LU VS MANIPON

-Petition for review on certiorari assailing the decision of the CA-

FACTS:

* On 5/9/81 Juan Peralta executed a deed of sale by installment in favor of Spouses Manipon which he agreed to sell by
installment to said spouses 350 sq. meters of the 2078 sq. meter lot he owned. This said DOS was not registered with the
RD.

*On 6/10/81, Juan Peralta mortgaged the lot to Thrift Savings and Loan Association (TSLAI) but he failed to pay the loan
he obtained for which the mortgage was constituted so it was judicially foreclosed and sold to TSLAIN for P62, 789.18
which was the highest bidder. TSLAI then sold the same for P80,000.00 to the petitioner who caused the subdivision of
the said lotr into 5 lots (one of which was Lot 5582-B-7-D wgich was sold to respondents. This said lot is now covered by
TCT No 171497) On 7/30/83, Juan Peralta executed a DOS in favor of respondents after the couple paid a total amount of
P8K for the subject lot, but said DOS was not registered.

*On 1/22/90 petitioner wrote respondents regarding the presence of the latters house which was being occupied by
them and efforts were made to settle the dispute but to no avail. On 2/26/90, petitioner commenced the action alleging
that he is the owner of the lot in question which was being occupied by respondents and further claims his ownership
was confirmed by the RTC of Urdaneta and for reasons unknown to him, respondents constructed a house thereon on
1/22/90.

*In answer, respondents claim that petitioner is a buyer in bad faith because he knew for a fact that they already bought
Lot 5582-B-7-D from the original owner of said lot and have been residing since 1981 even before he bought the 2078 sq.
meter lot. They also claimed that petitioner had knowledge of their claim because when the whole lot was foreclosed,
they shared the same dilemma with petitioner who also bought a lot with the 2078 sq.meter lot of Juan Peralta.

*The trial court ruled that petitioner was not a buyer in good faith which was affirmed by the CA

ISSUES: Who has better right over disputed property? Was petitioner a buyer in bad faith? What should be the purchase
price of the disputed lot?

HELD: Petitioner claims that from the time they fully paid for the lot until they received a notice to vacate, they did not
do anything to perfect their title and are now estopped for questioning his ownership over it. The court has held that in
estoppel, a person who by deed or conduct induces another to act in a particular manner is barred from adopting an
inconsistent position, attitude or course of conduct that causes loss or injury to another. this is not applicable to the
present case as respondents exercised dominion over the [roperty by pccupying and building a house on it.

Registration is not the equivalent of a title, it only gives validity to the transfer or creates a lien upon the land. It was not
established as a means of acquiring title to private land because it merely confirms but does not confer ownership.
Preferential right of the first registrant of real property in case of double sale is always qualified by good faith under Art
1544 of the civil code. A holder in bad faith of a certificate of title is not entitled to the protection of the law, for it cannot
be used as shield for fraud.

When the registration of a sale is not made in good faith, a party cannot base his preference of title thereon, because the
law will not protect anything done in bad faith. Bad faith renders the registration futile. Thus, if a vendee registers the
sale in his favor after he has acquired knowledge that there was a previous sale of the same property to a third party, or
that another person claims said property under a previous sale, or that the property is in the possession of one who is
not a vendor, or that there were flaws and defects in the vendors title, or that this was in dispute, the registration will
constitute x x x bad faith, and will not confer upon him any preferential right. The situation will be the same as if there
had been no registration, and the vendee who first took possession of the real property in good faith shall be preferred.
Petitioner is evidently not a subsequent purchaser in good faith so respondents have a better right to the property.

It seems that the main reason why petitioner bought the entire lot from TSLAI was his fear of losing the 350 sq.m. lot he
bought sometime in 1981 which also forms part of Lot 5582 B-7, having been aware of the defects in the title of TSLAI is
concerned he cannot now claim to be a purchaser in good faith even if he traces his ownership to TSLAI who was a
purchaser in good faith- the latter not being aware of the sale that transpired between respondents and Juan Peralta
before subject lot was sold in a public auction. Even assuming that petitioner was not aware of the sale between Peralta
and respondents, he cannot be considered a buyer in good faith as he has personal knowledge of respondents
occupation of lot, this should have put him on guard. The purchaser may not be required to go beyond the title to
determine the condition of property but a purchaser cannot also ignore facts which would put a reasonable man on his
guard and claim he acted in good faith under the belief that there was no defect in the title of the vendor.

On bad faith: Petitioner denies being a purchaser in bad faith. He alleges that the only reason he spoke to the
respondents before he bought the foreclosed land was to invite them to share in the purchase price, but they turned him
down.

Petitioners contention is untenable. He might have had good intentions at heart, but it is not the intention that makes
one an innocent buyer. A purchaser in good faith or an innocent purchaser for value is one who buys property and pays
a full and fair price for it, at the time of the purchase or before any notice of some other persons claim on or interest in
it.

Petitioners contention is untenable. He might have had good intentions at heart, but it is not the intention that makes
one an innocent buyer. A purchaser in good faith or an innocent purchaser for value is one who buys property and pays
a full and fair price for it, at the time of the purchase or before any notice of some other persons claim on or interest in
it

Purchase Price: The CA modification exempting respondents from paying petitioner is flawed, because the RTC had
ordered Juan Peralta to refund the P18,000 paid to him by petitioner as the purchase price of the disputed lot. Thus, the
trial court correctly ordered (1) respondents to pay petitioner P13,051.50[25] plus legal interest for Lot 5582-B-7-D and
(2) the third-party defendant Peralta to refund to respondents the P18,000 they had paid for the lot. The CA ruling
would unjustly enrich respondents, who would receive double compensation

October 2, 1915 G.R. No. L-8936

CONSUELO LEGARDA, with her husband MAURO PRIETO, plaintiffs-appellants, vs. N.M. SALEEBY,
defendant-appellee. Singson, Ledesma and Lim for appellants. D.R. Williams for appellee. JOHNSON, J.:
FACTS: Consuelo Legarda and N.M. Saleeby are owners of adjoining lots in Ermita, Manila . Between their lots
is a stone wall which is located on the lot of the plaintif fs. On March 2, 1906, Consuelo and her husband
presented a petition in the Court of Land Registration to register their lot. The registration was allowed on Oct
ober 25, 1906. They were then issued an original certificate and the title was r egistered. Both included the wall.
On March 25, 1912, the predecessor of N.M. Saleeby presented a petition in the C ourt of Land Registration for
registration. The court decreed the registration o f the land which also included the wall. The plaintiffs
Consuelo and Mauro, her husband, discovered that the wall has also been registered to N.M. Saleeby. They
presented a petition in the Court of Land Registration for adjustment and c orrection of the error where the
wall was indicated in both registrations. Howev er, the lower court contended that during the pendency of the
petition for the r egistration of the defendant s land, they failed to make any objection to the regist ration of
said lot, including the wall, in the name of the defendant.
ISSUE: WON the defendant is the owner of the wall and the land occupied by it?
RULING: NO. The lower court s decision would call for the plaintiffs to be always al ert and see to it that no
other parties will register the wall and its land. Els e, if they spotted someone registering such wall in their own
name, plaintiff mu st immediately oppose. Such would become defeat the real purpose of the Torrens system of
land registration. The real purpose of that system is to quiet title to land; to put a stop forever to any question
of the legality of the title, except claims which were noted at th e time of registration, in the certificate, or which
may arise subsequent theret o. That being the purpose of the law, it would seem that once a title is registe red
the owner may rest secure, without the necessity of waiting in the portals o f the court, or sitting in the
mirador de su casa, to avoid the possibility of losing his land. So who owns the land? According to Torrens
system, the plaintiffs. Under our law, once a party registers the land, final and in good faith, no thir d parties
may claim interest on the same land. The rights of all the worlda re fore closed by the decree of registration.
The registration, under the Torrens system, d oes not give the owner any better title than he had. The
registration of a parti cular parcel of land is a bar to future litigation over the same between the sam e parties. It
is a notice to the world and no one can plead ignorance of the reg istration. Adopting the rule which we believe
to be more in consonance with the purposes an d the real intent of the torrens system, we are of the opinion
and so decree tha t in case land has been registered under the Land Registration Act in the name o f two
different persons, the earlier in date shall prevail. The presumption is t hat the purchaser has examined every
instrument of record affecting the title. T his presumption is IRREBUTABLE. It cannot be overcome by proof
of innocence or g ood faith. Otherwise the very purpose and object of the law requiring a record w ould be
destroyed. The rule is that all persons must take notice of the facts wh ich the public record contains is a rule of
law. The rule must be absolute. Any variation would lead to endless confusion and useless litigation.
DECISION: Judgment of the lower court was revoked. The wall and the land where it sits is awarded to the
plaintiffs.