RET DIGEST 15/09/2023

ESTATE OF YUJUICO V REPUBLIC (Memory Aid: Who lives in a pineapple under the sea? LOT NI
YUJUICO!”)

FACTS:

 Yujuico is the owner of a land subdivided into two lots.

 Lot 1 was in the name of Yujuico, Lot 2 was sold to Petitioner Carpio.
 TCT of Yujuico’s land show that it has annotations that it had been mortgaged to Philippine
Investments System Organization (PISO) and Citibank. Annotations on the title of Carpio’s lot reveal
that said lot was mortgaged in favor of Private Development Corp. (PDC), Rizal Commercial Banking
Corporation (RCBC), Philippine Commercial and Industrial Bank (PCIB), and the Development Bank
of the Philippines (DBP) to secure various loans.
 Sometime in 1977, Presidential Decree No. (PD) 1085 entitled Conveying the Land Reclaimed in the
Foreshore and Offshore of the Manila Bay (The Manila-Cavite Coastal Road Project) as Property of
the Public Estates Authority as well as Rights and Interests with Assumptions of Obligations in the
Reclamation Contract Covering Areas of the Manila Bay between the Republic of the Philippines and
the Construction and Development Corporation of the Philippines (1977) was issued. Land reclaimed
in the foreshore and offshore areas of Manila Bay became the properties of the Public Estates
Authority (PEA), a government corporation that undertook the reclamation of lands or the acquisition
of reclaimed lands. On January 13, 1989, OCT No. SP 02 was issued in favor of PEA. The PEA also
acquired ownership of other parcels of land along the Manila Bay coast, some of which were
subsequently sold to the Manila Bay Development Corporation (MBDC), which in turn leased
portions to Uniwide Holdings, Inc.
 The PEA undertook the construction of the Manila Coastal Road. As this was being planned, Yujuico
and Carpio discovered that a verification survey they commissioned showed that the road directly
overlapped their property, and that they owned a portion of the land sold by the PEA to the MBDC.
 On July 24, 1996, Yujuico and Carpio filed before the Parañaque City Regional Trial Court (RTC), a
complaint for the Removal of Cloud and Annulment of Title with Damages against the PEA. On May
15, 1998 the parties entered into a compromise agreement approved by the trial court in a Resolution
dated May 18, 1998. On June 17, 1998, the parties executed a Deed of Exchange of Real Property,
pursuant to the compromise agreement, where the PEA property with an area of 1.4007 hectares
would be conveyed to Jesus Yujuico and petitioner Carpio in exchange for their property with a
combined area of 1.7343 hectares.
 Incumbent PEA General Manager, Carlos P. Doble, informed the OSG that the new PEA board and
management had reviewed the compromise agreement and had decided to defer its implementation
due to non compliance with requirement of approval by the Office of the President. The new PEA
management then filed a petition for relief from the resolution approving the compromise agreement
on the ground of mistake and excusable negligence.
 The petition was dismissed by the trial court on the ground that it was filed out of time and that the
allegation of mistake and excusable negligence lacked basis. Also dismissed in CA for lack of merit.
 The matter was raised to the Supreme Court in Public Estates Authority v. Yujuico but PEA's petition
was denied, upholding the trial court's dismissal of the petition for relief for having been filed out of
time.
 In another case, Republic of the Philippines, through the OSG, alleged that when the land registered to
Castro was surveyed by Engr. H. Obreto on August 3, 1972 and subsequently approved by the LRC
on April 23, 1973, the land was still a... portion of Manila Bay. Respondent Republic argued that, first,
since the subject land was still underwater, it could not be registered in the name of Fermina Castro.
Second, the land registration court did not have jurisdiction to adjudicate inalienable lands, thus the
decision adjudicating the subject parcel of land to Fermina Castro was void. And third, the titles of
Yujuico and Carpio, being derived from a void title, were likewise void.
 The trial court stated that the matter had already been decided in LRC Case No. N-8239, and that after
28 years without being contested, the case had already become final and... executory.
 The CA observed that shores are properties of the public domain intended for public use and,
therefore, not registrable and their inclusion in a certificate of title does not convert the same into
properties of private ownership or confer title upon the registrant. Further, according to the appellate
court res judicata does not apply to lands of public domain, nor does possession of the land
automatically divest the land of its public character.

ISSUE:
1. W/N a reversion suit proper in this case. (NO)
2. W/N the present petition estopped by laches. (YES)
3. W/N the CA erroneously apply the principle of res judicata. (YES)

RULING:

Sultan Sarabutnik Notes: Digestable Memes for Juris Dreams

1. The Republic misfiled the reversion suit with the Parañaque RTC. It should have been filed with the
CA as required by Rule 47. Evidently, the Parañaque RTC had no jurisdiction over the instant
reversion case.

The two grounds for annulment under Sec. 2, Rule 47 are extrinsic fraud and lack of jurisdiction. If
based on extrinsic fraud, the action must be filed within four (4) years from its discovery, and if based
on lack of jurisdiction, before it is barred by laches or estoppel as provided by Section 3, Rule 47.
Thus, effective July 1, 1997, any action for reversion of public land instituted by the Government was
already covered by Rule 47. It is clear therefore that the reversion suit was erroneously instituted in
the Parañaque RTC and should have been dismissed for lack of jurisdiction. The proper court is the
CA which is the body mandated by BP Blg. 129 and prescribed by Rule 47 to handle annulment of
judgments of RTCs.

2. In Republic v. Court of Appeals, where the title of an innocent purchaser for value who relied on the
clean certificates of the title was sought to be canceled and the excess land to be reverted to the
Government, the Court ruled that "[i]t is only fair and reasonable to apply the equitable principle of
estoppel by laches against the government to avoid an injustice to innocent purchasers for value ."

In a reversion case, we held that even if the original grantee of a patent and title has obtained the same
through fraud, reversion will no longer prosper as the land had become private land and the fraudulent
acquisition cannot affect the titles of innocent purchasers for value.

Considering that innocent purchaser for value Yujuico bought the lot in 1974, and more than 27 years
had elapsed before the action for reversion was filed, then said action is now barred by laches.

While the general rule is that an action to recover lands of public domain is imprescriptible, said right
can be barred by laches or estoppel. Section 32 of PD 1592 recognized the rights of an innocent
purchaser for value over and above the interests of the government.

3. The Parañaque City RTC Order dismissing the case for res judicata must be upheld. CA contention is
erroneous.

In Municipality of Antipolo, SC held that the land registration court had no jurisdiction to entertain
any land registration application if the land was public property, thus: ‘if a person obtains a title under
the Public Land Act which includes, by oversight, lands which cannot be registered under the
Torrens System, or when the Director of Lands did not have jurisdiction over the same because it is a
public forest, the grantee does not, by virtue of the said certificate of title alone, become the owner of
the land illegally included. Under these circumstances, the certificate of title may be ordered cancelled
(Republic vs. Animas, et al., supra), and the cancellation maybe pursued through an ordinary action
therefore. This action cannot be barred by the prior judgment of the land registration court, since
the said court had no jurisdiction over the subject matter. And if there was no such jurisdiction, then
the principle of res judicata does not apply.

the threshold question is whether the land covered by the titles of petitioners is under water and forms
part of Manila Bay at the time of the land registration application in 1974. If the land was within
Manila Bay, then res judicata does not apply. Otherwise, the decision of the land registration court
is a bar to the instant reversion suit.

After a scrutiny of the case records and pleadings of the parties in LRC Case No. N-8239 and in the
instant petition, we rule that the land of Fermina Castro is registrable and not part of Manila Bay at the
time of the filing of the land registration application. Thus, Res Judicata can not apply.

Sultan Sarabutnik Notes: Digestable Memes for Juris Dreams

Republic of the Philippines vs. Sps. Yu Cho Khai et al (Memory Aid: WELCOME TO THE )

FACTS:
 CFI of Province of Davao, sitting as Cadastral Court, issued Decree No. 36094 adjudicating a parcel
of land identified as Lot No. 1226-E. Said property was registered and issued an OCT in the names
Aurelio Pizarro, Gregoria Pizarro and Teofila Pizarro.
 Subsequently, a portion of Lot No. 1226-E was conveyed to Alfonso L. Angliongto who was issued
Transfer Certificate of Title (TCT) No. T-48269. TCT No. T-48269 was cancelled when a portion of it,
Lot No. 1226-E-2-A, was sold to Yu Cho Khai and Cristina Sy Yu (Spouses Yu), who were issued
TCT No. T-487248 on December 24, 1975.
 Notwithstanding these conveyances, the Secretary of Natural Resources Jose J. Leido, Jr. issued
Bureau of Forest Development Administrative Order (AO) No. 4-13699 dated September 27, 1976
classifying certain lands in Davao City, including Lot No. 1226-E, as alienable and disposable.
 The Agdao Residents Association, Inc. (ARAI) then filed a Petition10 before the Department of
Environment and Natural Resources (DENR) alleging that Lot No. 1225-E-2-A, now registered to the
Spouses Yu, remained a forest land over which members of the ARAI exercised possession. Upon
ocular inspection, the Community Environment and Natural Resources Office of Davao City East
(CENRO) confirmed ARAI's allegations.
 Prompted by the foregoing developments, the Republic filed before the RTC a complaint for
annulment/cancellation of certificates of title.
 By way of Answer, Felicitas Yap Angliongto (Felicitas), widow of Alfonso, prayed for the dismissal
of the complaint. She asserted that the Davao City Registry of Deeds already issued TCT No. T-48269
to Alfonso because of the previous conveyance to him. She also explained that the area was being
utilized for residential purposes and had been the subject of subsequent transfers.
 In an Order dated January 24, 1997, the RTC declared Spouses Yu in default because no submissions
or representations were received from them despite notice.
 Upon admission as intervenors, Filomena G. Pizarro, Rogelio G. Pizarro, Maria Evelyn P. Sulit, and
Nicolas P. Sulanan (heirs of Pizarro) filed their Answer-in-Intervention. They conceded that while
the property is now classified as private and not forest land, they were the real owners of Lot No.
1226-E because they were the heirs of Aurelio, Gregoria and Teofila Pizarro to whom OCT No. 0-14
was issued. Later on, they claimed that the conveyances to Alfonso and Yu Cho Khai were judicially
rescinded in two separate proceedings. Thus, the heirs of Pizarro prayed that the Republic's complaint
be dismissed and that a new certificate of title be issued in their name.
 Similarly, the RTC admitted ARAI as intervenor. In their Complaint--in-Intervention, ARAI sided
with the Republic in as much as the subject property is a land of public domain, but asserted their
vested right of possession over the portions they have purportedly been peaceably and continuously
occupying.
 After due proceedings, the RTC rendered the Decision dated June 8, 2009 and ruled that the
Republic's suit was barred by laches and estoppel since the complaint was filed only 45 years after the
issuance of OCT No. 0-14, which was, if at all, a mistake attributable to State agents.
 the Republic filed the instant petition. Necessarily, ARAI and the heirs of Pizarro filed their
respective submissions. Felicitas disavowed any personality in the proceedings, having previously
divested ownership over the subject property. As for Spouses Yu, this Court dispensed with their
memorandum since they had previously been declared in default by the RTC and that no accurate
return address could be ascertained.

ISSUE:
Whether or not OCT No. 0-14, as well as its derivative titles TCT Nos.T-48269 and T-48724, should
be declared null and void. (NO)

RULING:

SC denies petition

The Republic's complaint is in the nature of an action for reversion

While this case was designated as one "For: Annulment/Cancellation of Certificates of Title," the
Republic's complaint is really one for reversion of public land, the implored law being Sections 101 and
124 of Commonwealth Act No. 141, or The Public Land Act.

In Republic V. Espinosa, the State sought the reversion of a supposed timberland or forest land which, at
the time the action was filed, was already decreed alienable and disposable by the cadastral court. In fact,
the subject land was already issued an original certificate of title and conveyed to the defendant, who had
since been issued a transfer certificate of title. In said case, the Court ruled that the Republic failed to
overcome the burden to warrant the reversion of the property. Since the case is one for reversion and not
one for land registration, the burden is on the State to prove that the property was classified as
timberland or forest land at the time it was decreed to Espinosa.

Sultan Sarabutnik Notes: Digestable Memes for Juris Dreams

Applying the principles laid down in Espinosa and Cabrera, We find that the Republic's action for reversion
has no leg to stand on.

The Administrative Order in the case herein DOES NOT constitute a positive act of the government
declaring that the area covering Lot No. 1226-E-2-A was Forest Land. The Republics conclusion that the
same was not alienable and disposable prior to the issuance of the aforesaid AO was mistaken.As instructed
by Espinosa and Cabrera, the Republic must have presented an executive proclamation that the land was
inalienable land of the public domain. The Republic presented no such evidence in the instant proceedings.
Hence, the Court cannot retrospectively apply the Regalian doctrine so as to sweep away OCT No. 0-14
and its derivative titles TCT Nos. T-48269 and T-48724. As cautioned in Espinosa, "[t]o allow a reversion
based on a classification made at the time when the property was already declared private property by
virtue of a decree would be akin to expropriation of land without due process of law."

in the absence of any conclusive evidence regarding the property's classifications, the issuance of Decree
No. 3609 and OCT No. 0-14 overturned the presumption of State ownership and accordingly clothed the
property subject of this case with the presumption of alienability. Necessarily, Lot No. 1226-E-2-A must be
considered under private ownership.

In conclusion, one of the primary and fundamental purposes of the registration of land under the Torrens
system is to secure to the owner an absolute, indefeasible title, free from all encumbrances and claims
whatsoever, except those mentioned in the certificate of title, and, so far as it is possible, to make the
certificate issued to the owner by the court, absolute proof of such title. As the Republic failed to discharge
its burden to show that the properties subject of OCT No. 0-14, and its derivative titles TCT Nos. T-48269
and T-48724 belong to the public domain, private ownership thereon must be respected.

Petition for Review is DENIED.

Sultan Sarabutnik Notes: Digestable Memes for Juris Dreams

De Guzman vs. National Treasurer of the Philippines (Memory Aid: Unscrupulous little liars)

FACTS:

 On 01 July 1985, Urlan Milambiling and Asuncion Velarde purchased a parcel of land situated in
Antipolo, Rizal from Sta. Lucia Realty and Development, Inc. Although they were already civilly
married, Asuncion used her maiden name in the Deed of Sale because, being conservative, she did not
want to use her married name until she was married in church.
 After their church wedding on 05 July 1985, Urlan and Asuncion Milambiling went abroad for their
honeymoon.
 Before leaving for abroad, the spouses Milambiling entrusted the Deed of Sale of the parcel of land
they bought from Sta. Lucia Realty and the corresponding Certificate of Title still in the name of Sta.
Lucia Realty to a long-time friend and one of their principal wedding sponsors, Marilyn Belgica, who
volunteered to register the sale and transfer the title in their names.
 Later, the spouses Milambiling learned from Belgica through an overseas telephone call that a transfer
certificate of title of the said parcel of land had already been issued in their names. Belgica committed
to the Milambiling spouses that she will personally deliver the title to them in Saudi Arabia. Sometime
in May 1986, Belgica arrived in Saudi Arabia but the title was not with her. Belgica said that she left
it in their house in the Philippines and forgot to bring it with her.
 Upon calling his relatives to ask about the title, Urlan Milambiling was informed that the Certificate
of Title covering the said parcel of land had indeed been transferred in their names but was
subsequently cancelled and title transferred in the names of the spouses De Guzman.
 It appears that while the spouses Milambiling were in Saudi Arabia, a couple identifying themselves
as the spouses Urlan and Asuncion Milambiling went to the house of a certain Natividad Javiniar, a
real estate broker, inquiring if the latter could find a buyer for their lot located in Vermont Subdivision,
Antipolo, Rizal. Javiniar accompanied the said couple to the house of [the] spouses De Guzman.
Having somehow obtained possession of the owner’s duplicate copy of the certificate of title in the
name of the spouses Milambiling, the impostor-couple were able to convince the de Guzmans to buy
the property. On 20 November 1985, the impostor-couple, posing as the spouses Milambiling,
executed a Deed of Absolute Sale in favor of [the] spouses de Guzman who paid the stipulated
purchase price of P99,200.00. On 30 April 1986, [the De Guzmans] registered the said sale with the
Register of Deeds of Marikina who cancelled the certificate of title in the name of the Milambilings
and issued TCT No. N-117249 in the names of [the] De Guzman[s].
 Upon learning of the above, Urlan Milambiling quickly returned to the Philippines. On 24 July 1986,
the spouses Milambiling filed an action against [the spouses De Guzman] before the Regional Trial
Court of Antipolo, Rizal, Branch 73, for declaration of nullity of sale and title with damages.
 RTC Ruled in favor of Sps. Milambiling. .
 SPS Deguzman appealed the decision of the trial court to the Court of Appeals. Petition was denied
and subsequently appealed to the SC but was also denied.
 On 11 February 1993, [the] spouses De Guzman filed [an] action for damages against the Assurance
Fund before the Regional Trial Court of Pasig, Branch 153[,] impleading the National Treasurer of the
Republic of the Philippines and the Register of Deeds of Marikina City.
 RTC rendered its decision finding in favor of the De Guzman spouses.
 The National Treasurer and the Marikina Registrar of Deeds appealed from the above decision. The
Court of Appeals found merit in the appeal and reversed the decision of the RTC.

ISSUE:
W/N the Sps. De Guzman may claim damages agains the Assurance Fund. (NO)

RULING:

Decision of the CA is AFFIRMED.

Section 95 of Presidential Decree No. 1529, otherwise known as the Property Registration Decree, provides:

“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 or in any entry or
memorandum in the registration book, and who by the provisions of this Decree is barred or otherwise
precluded under the provision of any law from bringing an action for the recovery of such land or the estate
or interest therein, may bring an action in any court of competent jurisdiction for the recovery of damage to
be paid out of the Assurance Fund.”

It may be discerned from the foregoing provisions that the persons who may recover from the Assurance
Fund are:

Sultan Sarabutnik Notes: Digestable Memes for Juris Dreams

1) Any person who sustains loss or damage under the following conditions:

a) that there was no negligence on his part; and

b) that the loss or damage sustained was through any omission, mistake or malfeasance of the court
personnel, or the Registrar of Deeds, his deputy, or other employees of the Registry in the performance of
their respective duties under the provisions of the Land Registration Act, now, the Property Registration
Decree; or

2) Any person who has been deprived of any land or interest therein under the following conditions:

a) that there was no negligence on his part;

b) that he was deprived as a consequence of the bringing of his land or interest therein under the provisions
of the Property Registration Decree; or by the registration by any other person as owner of such land; or by
mistake, omission or misdescription in any certificate of owner’s duplicate, or in any entry or memorandum
in the register or other official book or by any cancellation; and

c) that he is barred or in any way precluded from bringing an action for the recovery of such land or interest
therein, or claim upon the same.3

The Court of Appeals correctly held that petitioners’ circumstances do not fall under the first case.
Petitioners have not alleged that the loss or damage they sustained was "through any omission, mistake or
malfeasance of the court personnel, or the Registrar of Deeds, his deputy, or other employees of the
Registry in the performance of their respective duties." Moreover, petitioners were negligent in not
ascertaining whether the impostors who executed a deed of sale in their (petitioner's) favor were
really the owners of the property.

Nor does petitioners’ situation fall under the second case. They were not deprived of their land "as a
consequence of the bringing of [the] land or interest therein under the provisions of the Property
Registration Decree." Neither was the deprivation due to "the registration by any other person as owner of
such land," or "by mistake, omission or misdescription in any certificate or owner’s duplicate, or in any
entry or memorandum in the register or other official book or by any cancellation."

Sultan Sarabutnik Notes: Digestable Memes for Juris Dreams

Eagle Realty Corporation vs. Republic ( Memory Aid: Here Cums the Sun)

FACTS:
 Petitioner Eagle Realty Corporation seeks the reconsideration of this SC’s Decision which affirmed
the Court of Appeals Decision which held the cancellation of petitioner’s certificate of title based on a
finding that it is not a purchaser in good faith and for value.
 In the assailed decision, the Court held that "a corporation engaged in the buying and selling of real
estate is expected to exercise a higher standard of care and diligence in ascertaining the status and
condition of the property subject of its business transaction." Citing Sunshine Finance and Investment
Corporation v. Intermediate Appellate Court, the Court declared that, similar to investment and
financing corporations, such corporation "cannot simply rely on an examination of a Torrens
certificate to determine what the subject property looks like as its condition is not apparent in the
document."
 Petitioner’s Motion for Reconsideration centers on the application of Sunshine Finance (case) to the
present case. Petitioner argues therein that the ruling in Sunshine Finance is a recent innovation,
established long after the subject property was transferred in petitioner’s name in 1984, hence, should
not be applied to the case. Prior jurisprudence that protected banks, investment corporations and realty
companies, without imposing any additional burden of going beyond the face of the title, should be
applied instead. Petitioner points out that it purchased the subject property in 1984, when prevailing
jurisprudence did not, as yet, impose upon realty companies the obligation to look beyond the
certificate of title for it to qualify as an innocent purchaser for value. To charge petitioner with such
additional obligation is to burden it with a then non-existent obligation which thus violates its right to
due process.
 In its Comment, the Office of the Solicitor General (OSG) averred that the ruling in Sunshine Finance
is not in the nature of a statute that cannot be retroactively applied; it is jurisprudence that merely
restates the definition of an innocent purchaser for value.

ISSUE:
W/N Petitioner is an innocent purchaser for value due to the subject property being transferred before
Jurisprudence stating that real estate business should exercise a higher standard of diligence in ascertaining
the status of the property. (NO)

RULING:

SC agrees with the OSG and, consequently, denies the motion for reconsideration.

Judicial interpretation of a statute constitutes part of the law as of the date it was originally passed, since
the Court’s construction merely establishes the contemporaneous legislative intent that the interpreted law
carried into effect. Such judicial doctrine does not amount to the passage of a new law, but consists merely
of a construction or interpretation of a pre-existing one, as is the situation in this case. The assailed decision
merely defines an "innocent purchaser for value" with respect to entities engaged in the real estate business.

In Sunshine Finance, the Court required, for the first time, investment and financing corporations to take
the necessary precautions to ascertain if there were any flaws in the certificate of title and examine the
condition of the property they were dealing with. Although the property involved was mortgaged to and,
subsequently, purchased by therein petitioner several years before the said decision was promulgated, SC
notes that the rule was immediately applied to that case.

herein assailed ruling expands the ruling in Sunshine Finance to cover realty corporations, which, because
of the nature of their business, are, likewise, expected to exercise a higher standard of diligence in
ascertaining the status of the property, not merely rely on what appears on the face of a certificate of title.

Sultan Sarabutnik Notes: Digestable Memes for Juris Dreams

Saberon vs. Ventanilla (Facts from Lawyerly. Tamad ko hehe)

Facts:

 In the earlier cases, Manila Remnant Co., Inc. (MRCI) was the petitioner, being the owner of several
parcels of land... constituting the subdivision known as Capitol Homes Subdivision Nos. I and II.
 MRCI entered into a contract with A.U. Valencia & Co. Inc. (AUVC) entitled "Confirmation of Land
Development and Sales Contract," whereby for a consideration, including sales commission and
management fee, the latter was to develop the aforesaid subdivision with authority to manage the...
sales thereof; execute contracts to sell to lot buyers; and issue official receipts.
 At that time, the president of AUVC, was Artemio U. Valencia (Valencia).
 MRCI and AUVC executed two (2) contracts to sell covering Lots 1 and 2... in favor of Oscar C.
Ventanilla, Jr. and Carmen Gloria D. Ventanilla (Ventanillas),... Valencia, holding out himself as
president of MRCI, and without the knowledge of the Ventanillas, resold the same property to Carlos
Crisostomo (Crisostomo), without any consideration.
 Valencia transmitted the fictitious contract with Crisostomo to MRCI... while he kept the contracts to
sell with the Ventanillas in his private office files.
 All the amounts paid by the latter were deposited in Valencia's bank account and remitted to MRCI as
payments of Crisostomo. The Ventanillas continued to pay the monthly installment.
 Thereafter, MRCI terminated its business relationship with AUVC on account of irregularities
discovered in its collection and remittances.
 Consequently, Valencia was removed as president by the Board of Directors of MRCI.
 He then stopped transmitting the Ventanillas' monthly installments
 AUVC sued MRCI to impugn the abrogation of their agency agreement before the Court of First
Instance which eventually ordered all lot buyers to deposit their monthly amortizations with the court.
 AUVC informed the Ventanillas that it was still authorized by the trial court to collect the monthly
amortizations and requested them to continue remitting their payment, with the assurance that said
payments would be deposited later in court.
 For AUVC's failure to forward its collections to the trial court as ordered, MRCI caused the
publication of a notice cancelling the contracts to sell of some lot buyers including those of
Crisostomo in whose name the payments of the Ventanillas had been credited.
 It was not until March 1978 when the Ventanillas discovered Valencia's deception. Believing that
they had already remitted the total amount of P73,122.35 for the two lots, the Ventanillas offered to
pay the balance to MRCI.
 To their shock, their names as lot buyers did not appear in MRCI's records. Instead, MRCI showed
them a copy of the contract to sell signed by Valencia, in favor of Crisostomo. MRCI refused the
Ventanillas' offer to pay for the remainder of the contract price.
 Aggrieved, the Ventanillas commenced an action for specific performance, annulment of deeds and
damages against MRCI, AUVC, and Crisostomo with the Court of First Instance the CFI Quezon City
rendered a decision declaring the contracts to sell in favor of the Ventanillas as valid and subsisting,
and annulling the contract to sell in favor of Crisostomo. It ordered the MRCI to execute an absolute
deed of sale in favor of the Ventanillas, free from all liens and encumbrances.
 On separate appeals filed by AUVC and MRCI, the CA sustained the CFI Quezon City's decision in
toto.

 The 1990 Case:

 MRCI then filed before the SC a petition for certiorari to review the decision of the CA upholding the
solidary liability of MRCI, AUVC and Crisostomo for the payment of moral and exemplary damages
and attorney's fees to the Ventanillas.
 this Court affirmed the decision of the CA and declared the judgment of the CFI Quezon City
immediately executory.
 the Ventanillas moved for the issuance of a writ of execution
 The writ was issued... and served upon MRCI
 A notice of levy was annotated in the titles of MRCI
 In a manifestation and motion, however, MRCI alleged that the subject properties could not longer be
delivered to the Ventanillas because they had already been sold to Samuel Marquez (Marquez)...
while its petition was pending before this Court.
 Nevertheless, MRCI offered to reimburse the amount paid by the Ventanillas, including legal interest
plus damages. MRCI also prayed that its tender of payment be accepted and that all garnishments on
their accounts lifted.
 The Ventanillas... rejected the reimbursement offered by MRCI in lieu of the execution of the absolute
deed of sale.
 They contended that the alleged sale to Marquez was void, fraudulent, and in contempt of court... and
that no claim of ownership over the properties in question had ever been made by Marquez.
 the CFI Quezon City ordered that the garnishment made by the Sheriff upon the bank account of
MRCI could be lifted only upon the deposit to the Court of the amount of P500,000.00 in cash.

Sultan Sarabutnik Notes: Digestable Memes for Juris Dreams

 MRCI then moved for reconsideration praying that it be ordered to reimburse the Ventanillas... and
that the garnishment of its bank deposit be lifted.
 This plea was denied twice by the trial court prompting MRCI to file another petition for... certiorari
with the CA, which ruled that the contract to sell in favor of Marquez did not constitute a legal
impediment to the immediate execution of the judgment.

 The 1994 Case:

 From the CA, the case was elevated to this Court... where MRCI argued that the sale of the properties
to Marquez was valid because at the time of the sale, the issue of the validity of the sale to the
Ventanillas had not yet been resolved. Further, there was no... specific injunction against it re-selling
the property.
 SC ruled even if it be assumed that the contract to sell in favor of Marquez is valid, it cannot prevail
over the final and executory judgment ordering MRCI to execute an absolute deed of sale in favor of
the Ventanillas. No less importantly, the records do not show that Marquez has already paid the
supposed balance amounting to ₱616,000.00 of the original price of over ₱800,000.00.
 As it turned out, the execution of the judgment in favor of the Ventanillas was yet far from fruition.
 Register of Deeds for Quezon City (ROD Cleofe) revealed to them, that MRCI registered a deed of
absolute sale to Marquez who eventually... sold the same property to the Saberons, which conveyance
was registered
 Apparently, the notice of levy, through inadvertence, was not carried over to the title issued to
Marquez, the same being a junior encumbrance which was entered after the contract to sell to
Marquez had already been annotated.

 Civil Case No. Q-96-26486

 Once again, the Ventanillas were constrained to go to court to seek the annulment of the deed of sale
executed between MRCI and Marquez as well as the deed of sale between Marquez and the Saberons,
as the fruits of void conveyances.
 the RTC rendered its decision,... in favour of plaintiffs, the spouses Oscar and Carmen Ventanilla, and
against defendants MRCI,... Declaring the Transfer Certificated of Title... in the name of Samuel
Marquez... and... in the names of Raul, Jr., Joan and Jacqueline Saberon as null and void;
 Separate appeals were instituted by MRCI and Tabalingcos, on one hand, and the Saberons, on the
other. The former contended that no fraudulent act could be attributed to them for the sale of the
property to the title of Marquez, considering that ROD Cleofe was the one who inadvertently omitted
the carrying over of the notice of levy to Marquez who consequently secured a clean title to the lot.
 Meanwhile, the Saberons relied on one central argument that they were purchasers in good faith,
having relied on the correctness of the certificates of title covering the lots in question; and therefore,
holders of a valid and indefeasible title.
 In the assailed decision, the CA made its conclusion
 The said parties were found guilty of bad faith for selling the lots to Marquez at a time when litigation
as to the validity of the first sale to the Ventanillas was still pending.

 The Present Petitio:

 Aggrieved by this CA ruling, the Saberons filed the present petition.

ISSUE:
W/N the registration of the notice of levy had produced constructive notice that would bind third persons
despite the failure of the ROD-QC to annotate the same in the certificates of title.

RULING:

Sections 51 and 52 of P.D. No. 1529 explain the purpose and effects of registering both voluntary and
involuntary instruments, to wit:

Section 51. Conveyance and other dealings by registered owner. An owner of registered land may convey,
mortgage, lease, charge or otherwise deal with the same in accordance with existing laws. He may use such
forms of deeds, mortgages, leases or other... voluntary instruments as are sufficient in law. But no deed,
mortgage, lease, or other voluntary instrument, except a will purporting to convey or affect registered land
shall take effect as a conveyance or bind the land, but shall operate only as a contract between the parties...
and as evidence of authority to the Register of Deeds to make registration.

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.

Section 52. Constructive notice upon registration. Every conveyance, mortgage, lease, lien, attachment,
order, judgment, instrument or entry affecting registered land shall, if registered, filed or entered in the

Sultan Sarabutnik Notes: Digestable Memes for Juris Dreams

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.

These provisions encapsulate the rule that documents, like the certificates of title do not effect a
conveyance of or encumbrances on a parcel of land. Registration is the operative act that conveys
ownership or affects the land insofar as third persons are concerned. By virtue... of registration, a
constructive notice to the whole world of such voluntary or involuntary instrument or court writ or
processes, is thereby created.

The Saberons maintain that they had no notice of any defect, irregularity or encumbrance in the titles of the
property they purchased. In its decision, however, the RTC pointed out that their suspicion should have
been aroused by the circumstance that Marquez, who was not... engaged in the buy-and-sell business and
had the property for only a few months, would offer the same for sale.

Although the RTC found that the Saberons may not be considered as innocent purchasers for value because
of this circumstance, it, nonetheless, ruled that they, who... might well be unwilling victims of the
fraudulent scheme employed by MRCI and Marquez, were entitled to actual and compensatory damages.

To this latter finding, the Court agrees. The Saberons could not be said to have authored the entanglement
they found themselves in. No fault can be attributed to them for relying on the face of the title presented by
Marquez.

This is in consonance to the rule that the one... who deals with property registered under the Torrens system
is charged with notice only of such burdens and claims as are annotated on the title.

Be that as it may, no fault can likewise be imputed to the Ventanillas.

In ultimately ruling for the Ventanillas, the courts a quo focused on the superiority of their notice of levy
and the constructive notice against the whole world which it had produced and which effectively bound
third persons including the Saberons.

It has already been established in the two previous cases decided by the Court that the contracts to sell
executed in favor of the Ventanillas are valid and subsisting.

In the same vein, the issue on Marquez's title had already been passed upon and settled in the 1994 case.

That he purchased the lots prior to the annotation of the notice... of levy in MRCI's title was of no moment.

MRCI's transaction with Marquez "cannot prevail over the final and executory judgment ordering MRCI to
execute an absolute deed of sale in favor of the Ventanillas."

It is undeniable, therefore, that no title was transferred to Marquez upon the annotation of the contract to
sell on MRCI's title. As correctly found by the trial court, the contract to sell cannot be substituted by the
Deed of Absolute Sale as a "mere conclusion" of the... previous contract since the owners of the properties
under the two instruments are different.

Considering that the deed of sale in favor of Marquez was of later registration, the notice of levy
should have been carried over to the title as a senior encumbrance.

Prior registration of the lien creates a preference, since the act of... registration is the operative act to
convey and affect the land.

Jurisprudence dictates that the said lien continues until the debt is paid, or the sale is had under an
execution issued on the judgment or until the judgment is satisfied, or the... attachment is discharged or
vacated in the same manner provided by law.

Surely, the Ventanillas had every right to presume that the Register of Deeds would carry over the notice of
levy to subsequent titles covering the subject properties. The notice was registered precisely to bind the
properties and to serve as caution to third persons who might... potentially deal with the property under the
custody of the law.

While the Court is not unmindful that a buyer is charged with notice only of such burdens and claims as are
annotated on the title, the RTC and the CA are both correct in applying the rule as to the effects of
involuntary registration.

In cases of voluntary registration... of documents, an innocent purchaser for value of registered land
becomes the registered owner, and, in contemplation of law the holder of a certificate of title, the moment

Sultan Sarabutnik Notes: Digestable Memes for Juris Dreams

he presents and files a duly notarized and valid deed of sale and the same is entered in the day book and...
at the same time he surrenders or presents the owner's duplicate certificate of title covering the land sold
and pays the registration fees, because what remains to be done lies not within his power to perform.

In cases of involuntary registration, an entry thereof in the day book is a sufficient notice to all
persons even if the owner's duplicate certificate of title is not presented to the register of deeds.

Therefore, in the registration of an attachment, levy... upon execution, notice of lis pendens, and the like,
the entry thereof in the day book is a sufficient notice to all persons of such adverse claim.

In the case at bench, the notice of levy covering the subject property was annotated in the entry book
of the ROD QC prior to the issuance of a TCT in the name of the Saberons.

the Ventanillas' levy was placed on record prior to the sale.

This shows the superiority and... preference in rights of the Ventanillas over the property as against the
Saberons.

the registration of the levy on attachment in the primary entry book as a senior encumbrance despite the
mistake of the ROD, the Court must, a fortiori,... sustain the notice of levy registered by the Ventanillas
notwithstanding the nonfeasance of ROD Cleofe.

Suffice it to say, no bad faith can be ascribed to the parties alike. Nevertheless, the equal footing of the
parties necessarily tilts in favor of the superiority of the Ventanillas' notice of levy, as discussed.

Sultan Sarabutnik Notes: Digestable Memes for Juris Dreams

Fudot vs. Cattleya Land Inc. (Memory Aid: pasaway nga bana)

FACTS:

 In July 1992, respondent Cattleya Land, Inc. had someone to check the titles of nine lots it intended to
buy from spouses Tecson. Finding no defect on the titles, Cattleya Land purchased the lots from the
Tecsons through a Deed of Conditional Sale in November 1992, and subsequently, a Deed of
Absolute Sale in October 1993.
 However, the Register of Deeds refused annotating the sale because of an existing notice of
attachment in the lots. Nonetheless, the attachment was eventually cancelled after Cattleya Land
persuaded the Tecsons to settle it.
 In January 1995, Petitioner Fudot presented for registration in the titles a deed of sale purportedly
executed by the Tecsons in her favor on December 1986. Cattleya Land immediately sent a letter of
protest to Fudot’s application.
 Having learned that the Register of Deed registered the dead of sale of petitioner and issued a new title
in her name, Cattleya Land filed a complaint with the Regional Trial Court.
 In intervention, Asuncion Tecson claimed that she never signed any deed of sale covering any part of
the conjugal property in favor of Fudot.
 The Regional Trial Court ruled that the sale between the Tecsons and Fudot was invalid because the
deed of sale was forged, based on the convincing and unrebutted testimony of Asuncion. The Court of
Appeals dismissed the appeal holding that there was no double sale as the Tecson-Fudot sale was null
and void.

ISSUE:
Whether or not Fudot has a better right as the first buyer of the subject property. (NO)

RULING:

Art. 1544 of the Civil Code provides;

“If the same thing should have been sold to different vendees, the ownership shall be transferred to the
person who may have first taken possession thereof in good faith, if it should be movable property.

Should it be immovable property, the ownership shall belong to the person acquiring it who in good
faith first recorded it in the Registry of Property.

Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the
possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good
faith.”

The Court held against the petitioner. There is no double sale to speak of because the sale between spouses
Tecson and Fudot is invalid as it bears the forged signature of Asuncion. The Court held that Art. 1544 will
not apply where said deed is found to be a forgery, the result being that the right of other vendee should
prevail. Both the trial court and the Court of Appeals upheld that the sale between spouses Tecson and
Fudot is invalid based on the unrebutted testimony of Asuncion that her signature was forged. The
signature of Asuncion was essential considering that at the time the sale was made, Art. 166 of the Civil
Code provides that a husband cannot alienate or encumber any real property of the conjugal relationship
without the wife’s consent.

Even assuming that there was a double sale, the knowledge gained by first buyer does not defeat his right,
except where the second buyer registers the second sale in good faith. However, the knowledge gained by
the second buyer of the first sale defeats his rights even if he is the first to register the second sale as
knowledge taints his prior registration. In the present case, the Court held that Cattleya Land is buyer in
good faith having purchased the lots without any notice of a previous sale other than a notice of attachment,
which it even persuaded the Tecsons to settle the same in order to register the property.

Petitioner argues she has a better right over the property in question, as the holder of and the first one to
present, the owner’s copy of the title for the issuance of a new TCT. The Court is not persuaded.

The act of registration does not validate petitioner’s otherwise void contract. Registration is a mere
ministerial act by which a deed, contract, or instrument is sought to be inscribed in the records of the Office
of the Register of Deeds and annotated at the back of the certificate of title covering the land subject of the
deed, contract, or instrument. While it operates as a notice of the deed, contract, or instrument to others, it
does not add to its validity nor converts an invalid instrument into a valid one as between the parties, nor
amounts to a declaration by the state that the instrument is a valid and subsisting interest in the land. The
registration of petitioner’s void deed is not an impediment to a declaration by the courts of its invalidity

Sultan Sarabutnik Notes: Digestable Memes for Juris Dreams

Cheng vs. Genato (Memory Aid: Random Ricardo)

FACTS:

Respondent Ramon B. Genato is the owner of two parcels of land located at Paradise Farms, San Jose Del
Monte, Bulacan. Respondent 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. The Da
Jose spouses, not having finished verifying the titles mentioned in clause 3 as aforequoted, asked for and
was granted by respondent Genato an extension of another 30 days or until November 5, 1989. However,
according to Genato, the extension was granted on condition that a new set of documents is made seven (7)
days from October 4, 1989. This was denied by the Da Jose spouses.

Pending the effectivity of the aforesaid extension period, and without due notice to the Da Jose spouses,
Genato executed an Affidavit to Annul the Contract to Sell, for the vendee has committed a breach of
contract for not having complied with the obligation as provided in their Contract.

Petitioner Ricardo Cheng (Cheng) went to Genatos residence and expressed interest in buying the subject
properties. On that occasion, Genato showed to Ricardo Cheng copies of his transfer certificates of title and
the annotations at the back thereof of his contract to sell with the Da Jose spouses. Genato also showed him
the aforementioned Affidavit to Annul the Contract to Sell which has not been annotated at the back of the
titles.

Later on, Da Jose spouses discovered about the affidavit to annul their contract. The latter were shocked at
the disclosure and protested against the rescission of their contract. After being reminded that he (Genato)
had given them (Da Jose spouses) an additional 30-day period to finish their verification of his titles, that
the period was still in effect, and that they were willing and able to pay the balance of the agreed down
payment, later on in the day, Genato decided to continue the Contract he had with them. The agreement to
continue with their contract was formalized in a conforme letter.

Respondent advised petitioner of his decision to continue his contract with the Da Jose spouses and
completely returned to Chengs the checks for their payments and expressed regret for his inability to
consummate his transaction with him. After having received the letter of Genato, Cheng, however, returned
the said check to the former. Cheng instituted a complaint for specific performance to compel Genato to
execute a deed of sale to him of the subject properties plus damages and prayer for preliminary attachment.
In his complaint, Cheng averred that the P50,000.00 check he gave was a partial payment to the total
agreed purchase price of the subject properties and considered as an earnest money for which Genato
acceded. Thus, their contract was already perfected. In Answer, thereto, Genato alleged that the agreement
was only a simple receipt of an option-bid deposit, and never stated that it was a partial payment, nor is it
an earnest money and that it was subject to the condition that the prior contract with the Da Jose spouses be
first cancelled. The Da Jose spouses, in their Answer in Intervention,[18] asserted that they have a superior
right to the property as first buyers. They alleged that the unilateral cancellation of the Contract to Sell was
without effect and void. They also cited Chengs bad faith as a buyer being duly informed by Genato of the
existing annotated Contract to Sell on the titles.

ISSUE:
W/N the contract to sell between Genatao sps. Da Jose had been validly rescinded.

RULING:

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 (Double Sale) 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,

Sultan Sarabutnik Notes: Digestable Memes for Juris Dreams

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.

Sultan Sarabutnik Notes: Digestable Memes for Juris Dreams

Sultan Sarabutnik Notes: Digestable Memes for Juris Dreams