FIRST DIVISION
[G.R. No. 240863. October 6, 2021.]
SPOUSES JOSE TY AND ESTRELLA TY, petitioners, vs.HEIRS OF SPOUSES LEONARDO Z. PALERMO AND PETRONIA DOLORITOS, REPRESENTED BY ANASTACIO D. PALERMO, MAXIMO D. PALERMO, LEONCIA P. MALALIS, AND ANATALIA P. BOHOLST, respondents.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, First Division, issued a Resolution datedOctober 6, 2021which reads as follows:
"G.R. No. 240863 (Spouses Jose Ty and Estrella Ty v. Heirs of Spouses Leonardo Z. Palermo and Petronia Doloritos, represented by Anastacio D. Palermo, Maximo D. Palermo, Leoncia P. Malalis, and Anatalia P. Boholst). — This is a Petition for Review on Certiorari1 under Rule 45 of the Revised Rules of Court assailing the Decision 2 dated August 25, 2017 and the Resolution 3 dated June 21, 2018 of the Court of Appeals (CA), in CA-G.R. CV No. 04223-MIN.
Rufino Corpin (Corpin) was the owner of a parcel of land situated in Poblacion, Buug, Zamboanga Sibugay. The land was on lease to a certain Ty Wan Yong (Yong), the father of herein petitioner Jose Ty (Jose), for a period of five years, to expire on June 6, 1966. 4
During the term of the lease, Corpin sold the land to Spouses Leonardo Z. Palermo (Leonardo) and Petronia Doloritas Palermo (Petronia) by virtue of a Deed of Absolute Sale dated June 11, 1964. The land was surveyed and designated as Lot No. 378 TS-356, and subsequently declared for taxation purposes in the name of Leonardo under Tax Declaration Nos. 5501, 819, 395, and 0554. 5
As a lessee of the land, Yong acknowledged Leonardo's ownership over the property, and paid his rentals to Leonardo for the months of June, July, and August 1965. When Yong discovered that the land on lease was still owned by the Republic of the Philippines, 6 he immediately stopped paying his rentals due. 7 ICHDca
Consequently, Leonardo sent Yong demand letters which were unheeded. Leonardo eventually filed an ejectment case against Yong. It was resolved in favor of Leonardo in a Decision dated February 17, 1968. The same judgment ordered Yong to vacate the land and pay the rentals for the period September 1965 to February 1968. 8
Yong appealed the case to the CA but he died during the pendency of the proceedings. He was accordingly substituted by Jose. After due proceedings, the CA dismissed the appeal in a Decision dated July 2, 1979, and an entry of judgment was issued thereon. However, the decision was not executed due to supervening events, which altered the circumstances regarding the property in dispute. 9
It was later revealed that Jose and Estrella Ty (Estrella) applied for a free patent over Lot No. 378 under Application No. IX-6-784 before the Bureau of Lands on February 17, 1987. In their application, they declared under oath that Leonardo was their predecessor-in-interest and that the latter has possessed the land under a bona fide claim of ownership since 1944. Jose and Estrella also submitted a Confirmation of Sale Rights and Improvements purportedly executed by Leonardo. 10
Ironically, the document confirming the sale was executed on February 7, 1987, which was three years after Leonardo's death on January 19, 1984. Similarly, the said document does not bear a signature signifying Petronia's conformity to the sale. Eventually, Jose and Estrella were able to register the land under Certificate of Title No. P-37-300. 11
Unknown to the heirs of Leonardo, Jose entered into a Lease Contract with the Bureau of Lands through the then Minister of Natural Resources, with a validity of 25 years, which was to take effect in 1976. However, Jose did not exhaust the contract period because he filed a Miscellaneous Sales Application with the Bureau that paved the way for the issuance of a certificate of title in his name. 12
On December 27, 2007, the heirs of Leonardo and Petronia, herein respondents, namely: Anastacio D. Palermo, Maximo D. Palermo, Leoncia P. Malalis, and Anatalia P. Boholst, filed a Complaint for Declaration of Nullity of Affidavit of Confirmation of Sale and Rights and Improvements, Cancellation of Original Certificate of Title, Reconveyance and Damages. 13
The case was subsequently dismissed on the grounds of lack of cause of action and prescription. The RTC opined that as the subject property was a public land, respondents had no personality to sue over the said land. The court a quo added that even if the action treated as one for reconveyance, the suit would still fail since an action for reconveyance could only be brought within ten (10) years, counted from the date of issuance of petitioners' certificate of title in 1992. 14
Aggrieved, respondents filed their appeal to the CA.
On August 25, 2017, the CA found merit on respondents' appeal and held:
Appellants were in possession of the property. Hence, the action has not yet prescribed.
To the point of being redundant, we recapitulate, Ty Wan Yong recognized Leonardo Palermo as the owner of the property and paid him monthly rentals. One of the main reasons why he stopped paying was Leonardo's construction of a house on the property.
Appellants were also able to present as evidence a copy of a document entitled "III (a) Building and other Improvements, I. Owners Declaration" whereby it was stated that there was a two-storey commercial building in the name of Leonardo Palermo on the property. There was also a Declaration of Real Property wherein it was annotated that the two-storey commercial building was constructed in the subject lot in the name of Leonardo Palermo. TCAScE
Moreover, the issue of possession has already been resolved by the Municipal Court in the unlawful detainer case in favor of appellants, which was affirmed by the RTC, and thereafter by the Court of Appeals, notwithstanding the fact that said Decision was never executed.
According to the law of the case doctrine, whatever is irrevocably established as the controlling legal rule or decision between the same parties in the same case continues to be the law of the case, whether correct on general principles or not, so long as the facts on which the legal rule or decision was predicated continue to be the facts of the case before the court.
Finding no reason to reverse the findings of the RTC, the Court of Appeals affirmed the same in favor of herein appellants. Hence, as far as the parties are concerned, the issue of possession in favor of appellants has already been resolved with finality.
The Court cannot also dismiss the testimony of Leonardo Palermo's son, Maximo Palermo, that his father constructed a building on the subject lot and occupied the same which was rented out to a certain Bartolome Corpin. He also stated that at the time of his testimony, his father's building was still existing and is now occupied by a certain policeman named Edgar Piscos who used to pay them rentals yet stopped for the last five (5) years.
All these clearly show that appellants have remained in possession of the property despite appellee Ty's claim that he owns the subject land by virtue of the title in his name.
Hence, the subject property must be reconveyed to appellants. 15
Jose and Estrella moved for reconsideration but the same was denied by the CA in its Resolution dated June 21, 2018. Hence, the instant petition, assigning the following errors:
I.
Based on the undisputed facts of the case, did the Honorable Court of Appeals correctly apply the law on prescription; and
II.
Based on the undisputed facts that the subject real property is a public land, was the Court of Appeals correct in holding that the instant action does not require the participation of the Office of the Solicitor General.
It is the contention of petitioners that to allow respondents to question OCT No. P-37-300 15 years after its issuance would undermine the indefeasibility of their certificate of title. 16
Petitioners add that the land was previously a public land. Thus, even assuming that their title to the land was fraudulently obtained, it will only revert back to the State and it is the Solicitor General, not the respondents, who should have instituted the complaint. 17 cTDaEH
On the other hand, respondents argue that their right to question the nullity of petitioners' title has not prescribed. They alleged that they have been in actual possession of the property since 1964. As such, they stand firm in claiming that their action for reconveyance of title is not barred by the statute of limitations as their undisturbed possession gave them the continuing right to seek the aid of the court to ascertain the nature of the adverse claim of petitioners. 18
Our Ruling
The petition lacks merit.
Before disposing of the main issue in this case, this Court needs to address a formal defect in the petition raised by respondents. Collectively, they aver that Atty. Richard B. Rambuyong (Atty. Rambuyong), counsel for the petitioners, failed to indicate his Roll of Attorneys Number, Integrated Bar of the Philippines (IBP) Official Receipt or Lifetime Member Number, current Professional Tax Receipt (PTR) and Notarial Commission in the Verification and Certification of Non-Forum section of the Petition for Review on Certiorari, in violation of Bar Matter No. 287, 19 Bar Matter No. 1132, 20 and Bar Matter No. 1922, 21 respectively.
Further, respondents highlight the discrepancies in the issuance of notarial commission of Atty. Rambuyong when he indicated different validity dates in the verification and certification section of the pleadings filed in court such that it would appear that his notarial commissions have been issued to him every year, which would run counter to the two-year commissioning under Section 11, Rule III of the 2004 Rules on Notarial Practice. 22
Respondents then conclude that if the verification and certification of non-forum shopping was notarized by a notary public whose commission has already expired or has not been granted a valid commission, then the pleadings filed before this Court should be struck down as they failed to adhere with the Rules.
In their Reply, 23 petitioners assert that it has been the common practice of Atty. Rambuyong to indicate, on a yearly basis, the validity of his notarial commission on his notarized documents as it serves no practical purpose to indicate the advance or second year of the commission since the rubber stamps manufactured for that purpose have to bear the PTR O.R. No., which is being issued yearly. To prove the validity of his notarial commission, Atty. Rambuyong submitted to the Court, photocopies of his commission as Notary Public for January 2016 to December 2019.
The rule is that a counsel's signature on a pleading signifies his declaration that he has read its contents and thus certifies that there is a ground to support it, and that it is not interposed for delay. This positive duty is a solemn component of legal practice and not just an empty formality or a means of identification. 24
Apart from his or her signature, a counsel is also obliged to indicate in all pleadings filed before courts or quasi-judicial bodies the following additional information:
1. counsel's address per rule 7, Section 3 of the Revised Rules of Court;
2. roll of attorney's number pursuant to Bar Matter No. 1132;
3. number and date of official receipt of membership dues with the Integrated Bar of the Philippines required under Bar Matter No. 287;
4. professional tax receipt in accordance with Section 139 of the Local Government Code; cSaATC
5. mandatory continuing legal education compliance or exemption required under Bar Matter No. 1922; and,
6. contact details under Resolution in A.M. No. 07-6-5-SC.
Further, the inclusion of a counsel's Roll of Attorneys number, professional tax receipt (PTR) number, and Integrated Bar of the Philippines (IBP) receipt (or lifetime membership) number is intended to preserve and protect the integrity of legal practice. They seek to ensure that only those who have satisfied the requisites for legal practice are able to engage in it. With the Roll of Attorneys number, parties can readily verify if a person purporting to be a lawyer has, in fact, been admitted to the Philippine bar. With the professional tax receipt number, they can verify if the same person is qualified to engage in a profession in the place where he or she principally discharges his or her functions. With the IBP receipt number, they can ascertain if the same person remains in good standing as a lawyer. These pieces of information, in the words of Galicto v. Aquino III, 25 "protect the public from bogus lawyers." Paying professional taxes (and the receipt that proves this payment) is likewise compliance with a revenue mechanism that has been statutorily devolved to local government units.
The inclusion of information regarding compliance with (or exemption from) Mandatory Continuing Legal Education (MCLE) seeks to ensure that legal practice is reserved only for those who have complied with the recognized mechanism for "keep[ing] abreast with law and jurisprudence, maintaining the ethics of the profession[,] and enhancing the standards of the practice of law. 26
Lastly, the inclusion of a counsel's address and contact details is designed to facilitate the dispensation of justice. These pieces of information aid in the service of court processes, enhance compliance with the requisites of due process, and facilitate better representation of a client's cause.
Notably, while it may appear that Atty. Rambuyong has substantially complied with the foregoing rules when he stated in the pleadings his roll of attorney's number, IBP lifetime number, PTR receipt number, MCLE compliance, Tax Identification Number, and contact details, he nonetheless failed to include these details in the verification and certification section required of him as Notary Public.
To be sure, the foregoing requirements are not mere frivolities. They are not mere markings on a piece of paper. 27 They are mechanisms devised to ensure that lawyers in legal practice maintain their integrity, competence, and credibility. Nevertheless, the failure of a notary public to indicate in the jurat his or her proper notarial commission number as well as the details required of him or her by this Court does not necessarily render the petition fatally defective as the requirement of verification is simply a condition affecting the form of pleadings. 28
At any rate, Atty. Rambuyong has submitted to this Court original duplicate copies of his notarial commission 29 issued by Executive Judge Anthony D.T. Isaw of the Regional Trial Court of Zamboanga Sibugay, for the term January 4, 2016 to December 31, 2017 and January 1, 2018 to December 21, 2019, as evidence of his authority as notary public at the time of the adverted notarization.
We now proceed to the main issue, that of prescription of reconveyance suits, as well as affidavits of confirmation of sale, rights, and improvements.
An action for reconveyance is a legal and equitable remedy granted to the rightful owner of land which has been wrongfully or erroneously registered in the name of another for the purpose of compelling the latter to transfer or reconvey the land to him. 30 In an action for reconveyance, the decree of registration is respected as incontrovertible. What is sought instead is the transfer of the property, which has been wrongfully or erroneously registered in another person's name, to its rightful and legal owner, or to one with a better right. 31 However, such recourse cannot be availed of once the property has passed to an innocent purchaser for value. For an action for reconveyance to prosper, the property should not have passed into the hands of an innocent purchaser for value. 32 cHDAIS
In the present case, OCT No. P-37-300 was issued in the name of Jose Ty in 1992 which he purportedly acquired upon submission of a fraudulent patent application and supporting documents.
In Heirs of Cayetano Cascayan v. Spouses Gumallaoi, 33 We emphasized that the presence of fraud is a factual question. It must be established through clear and convincing evidence, though the circumstances showing fraud, may vary, viz.:
x x x the party alleging fraud or mistake in a transaction bears the burden of proof. The circumstances evidencing fraud are as varied as the people who perpetrate it in each case. It may assume different shapes and forms; it may be committed in as many different ways. Thus, the law requires that it be established by clear and convincing evidence. 34
Here, the existence of fraud in petitioners' acquisition of free patent, which paved the way for the subsequent issuance of OCT No. P-37-300 was unraveled by the CA when it scrutinized the evidence on record in this wise:
In this case, it is undisputed fact, admitted by both parties, that prior to the sale of the subject land by Rufino Corpin to Leonardo Palermo, the former leased the land to appellee's father, Ty Wan Yong. Upon such sale to Leonardo, he succeeded into the rights of the original lessor of Ty Wan Yong.
Ty Wan Yong acknowledged Leonardo Palermo as the owner of the land and as his lessor, by paying monthly rentals over the subject property. Ty Wan Yong only stopped paying when he found out that the land was still owned by the government and that Leonardo Palermo constructed a house in the subject lot.
When Ty Wan Yong refused to pay rentals, Leonardo Palermo file a case for unlawful detainer before the court which was ruled in his favor ordering Ty Wan Yong to vacate the subject lot and to pay the unpaid rentals over the property.
Since it is a standing rule that a lessee is estopped or prevented from disputing the title of the landlord or lessor, it is now inconceivable that Ty Wan Yong's son, herein appellee Jose Ty, claims to own the land which he leased from appellants' predecessor. To do so would only mean that appellee's title to the land is tainted with fraud and irregularities.
The fact that the subject property is in appellee Jose Ty's name as shown by the certificate of title OCT No. P-37-300 does not automatically make him the true owner of the lot.
It is noteworthy to mention that registration of a property under one's name is not a mode of acquiring ownership. It is merely a procedure to establish evidence of title over [a] realty. It is not a source of right. In other words, one's mere possession of a certificate of title does not automatically make one the true owner of the property.
Moreover, the Torrens system was not designed to shield and protect one who had committed fraud or misrepresentation and thus holds title in bad faith. The evidence on record glaringly points to certain irregularities and fraud in obtaining title to the subject lot.
Because while the title is under the name of appellee Jose Ty, the Declaration of Real Property is under the name of Leonardo Palermo with Tax Declaration Nos. 5501-819-395 and 0554. It was also surveyed and designated as Lot No. 378 TS-356 by the Bureau of Lands in the name of Leonardo Palermo as the survey claimant. A perusal of appellee's formal offer of exhibits would also show that it does not contain any attachment concerning the Miscellaneous Sales Application (MSA-IX-4-2-E-145).
Moreover, except for appellee Jose Ty's bare allegations, he only adduced as evidence a Certified True Copy of the Lease Contract between the Director of Lands and him dated March 28, 1980 and Certified True Copies of the Letters from the Bureau of Lands to Jose Ty. It was not clearly shown how appellee was successfully issued Free Patent No. P-37-300.
It must be remembered that before the issuance of a Free Patent and eventually the Original Certificate of Title, the applicant must file a petition for the same and must prove prior possession therein. Appellees' possession of the subject property was by virtue of tacking the same on his father's lease of the property from Leonardo Palermo, which has already discussed[,] cannot be done. ISHCcT
Furthermore, save for appellees' bare denials, they were not able to prove that they had nothing to do with the forged Affidavit of Confirmation of Sale of Rights and Improvements purportedly entered into by Leonardo Palermo and Jose Ty three years after the former died.
Said affidavit was entered into by the parties accordingly on February 7, 1987, yet the Death Certificate of Leonardo Palermo showed that he died on January 29, 1984.
Clearly, the impossibility is a badge of fraud on the part of the appellees, who introduced the said document in court. Moreover, said document was signed and notarized on February 7, 1987 yet the residence certificate of the affiant was dated March 3, 1987. The signature of Leonardo Palermo's wife was also missing in the said document.
Appellants' argument is also well taken that it was at the time when appellees filed an appeal before the Court of Appeals in the unlawful detainer case that they were able to secure a lease contract for the subject lot for a period of twenty-five years effective September 24, 1976, but was notarized only on March 20, 1980 in violation of the Property Registration Decree. As to what actually transpired in appellees' Miscellaneous Sales Application that led to the issuance of OCT No. P-37-300, is not clear. Appellees merely stated that they had no hand in the alleged falsification of the Affidavit of Confirmation of Sale and that they applied for a Miscellaneous Sales Application. 35
The CA's appreciation of the evidence on the existence of fraud and the weight given to the parties' evidence is binding on this Court. Indeed, the presence of fraud necessarily created a constructive trust in favor of respondents and gave them the right to seek the remedy of reconveyance of the property wrongfully obtained.
Under the principle of constructive trust, registration of property by one person in his name, whether by mistake or fraud, the real owner being another person, impresses upon the title so acquired the character of constructive trust for the real owner, which would justify an action for reconveyance. 36
An action for reconveyance is a legal remedy granted to a rightful owner of land wrongfully or erroneously registered in the name of another to compel the latter to reconvey the land to him. In reconveyance, the decree of registration is respected as incontrovertible. What is sought instead is the transfer of the property, which has been wrongfully or erroneously registered in another person's name, to its rightful and legal owner, or to one with a better right. 37
In Gatmaytan v. Misibis Land, 38 this Court, expounded on the statutory basis of reconveyance, thus:
An action for reconveyance is based on Section 53, paragraph 3 of Presidential Decree (PD) No. 1529, which provides:
In all cases of registration procured by fraud, the owner may pursue all his legal and equitable remedies against the parties to such fraud without prejudice, however, to the rights of any innocent holder for value of a certificate of title.
The above provision should be read in conjunction with Article 1456 in relation to Article 1144 of the Civil Code, to wit:
Article 1456. If property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes.
Art. 1144. The following actions must be brought within ten years from the time the right of action accrues:
(1) Upon a written contract; CAacTH
(2) Upon an obligation created by law;
(3) Upon a judgment.
Clearly, the reckoning point of the prescription of an action for reconveyance is the date of registration and/or issuance of the certificate of title over the property. The case of Estate of Margarita D. Cabacungan v. Laigo, 39 is instructive:
When [a] property is registered in another's name, an implied or constructive trust is created by law in favor of the true owner. The action for reconveyance of the title to the rightful owner prescribes in 10 years from the issuance of the title. An action for reconveyance based on implied or constructive trust prescribes in ten (10) years from the alleged fraudulent registration or date of issuance of the certificate of title over the property. 40
There is no doubt about the fact that an action for reconveyance based on an implied trust ordinarily prescribes in 10 years. This rule assumes, however, that there is an actual need to initiate that action, for when the right of the true and real owner is recognized, expressly or implicitly such as when he remains undisturbed in his possession, the statute of limitation would yet be irrelevant. An action for reconveyance, if nonetheless brought, would be in the nature of a suit for quieting of title, or its equivalent, an action that is imprescriptible. In David v. Malay, 41 the Court has held that a person in actual possession of a piece of land under claim of ownership may wait until his possession is disturbed or his title is attacked before taking steps to vindicate his right, and that his undisturbed possession gives him the continuing right to seek the aid of a court of equity to ascertain and determine the nature of the adverse claim of a third party and its effect on his title. In the words of the Court:
". . . There is settled jurisprudence that one who is in actual possession of a piece of land claiming to be owner thereof may wait until his possession is disturbed or his title is attacked before taking steps to vindicate his right, the reason for the rule being, that his undisturbed possession gives him a continuing right to seek the aid of a court of equity to ascertain and determine the nature of the adverse claim of a third party and its effect on his own title, which right can be claimed only by one who is in possession. No better situation can be conceived at the moment for Us to apply this rule on equity than that of herein petitioners whose mother, Felipa Faja, was in possession of the litigated property for no less than 30 years and was suddenly confronted with a claim that the land she had been occupying and cultivating all these years, was titled in the name of a third person. We hold that in such a situation the right to quiet title to the property, to seek its reconveyance and annul any certificate of title covering it, accrued only from the time the one in possession was made aware of a claim adverse to his own, and it is only then that the statutory period of prescription commences to run against such possessor." 42
The same dictum is reiterated in Heirs of Jose Olviga v. Court of Appeals, 43 thus:
With regard to the issue of prescription, this Court has ruled a number of times before that an action for reconveyance of a parcel of land based on implied or constructive trust prescribes in ten years, the point of reference being the date of registration of the deed or the date of the issuance of the certificate of title over the property. 44
Simply put, the right to seek reconveyance based on an implied trust is not absolute. It is subject to extinctive prescription. An action for reconveyance based on implied or constructive trust prescribes in 10 years. As stated above, this period is reckoned from the date of the issuance of the original certificate of title or transfer certificate of title. Since such issuance operates as a constructive notice to the whole world, the discovery of the fraud is deemed to have taken place at that time.
As earlier discussed, the title over the property in dispute was registered in the name of Jose Ty in 1992 while the action for reconveyance was filed in 2007. If We are to apply the general rule on prescription of action for constructive trust, 15 years already passed since the registration of the property and clearly, respondents' cause of action is already barred by prescription. IAETDc
It is trite to mention that in Heirs of Olviga, 45 this Court has made a clear distinction on the prescription of action when the plaintiff is in possession of the real property, and when he/she is not in possession. In said case, We explained that when the plaintiff is not in possession of the subject property, the action prescribes in ten (10) years from the date of registration of the deed or the date of the issuance of the certificate of title over the property. But when the party seeking reconveyance based on implied or constructive trust is in actual, continuous and peaceful possession of the property involved, prescription does not commence to run against him because the action would be in the nature of a suit for quieting of title, an action that is imprescriptible. 46 For one to be considered in possession, he/she need not have actual or physical occupation of every inch of the property at all times. Possession can be acquired not only by material occupation but also by the fact that a thing is subject to the action of one's will or by proper acts and legal formalities established for acquiring such right. Possession can be acquired by juridical acts to which the law gives the force of acts of possession such as succession or execution of public instruments.
Contrary to their claim, it is not petitioners, but respondents who possessed the property in dispute in the concept of owners following the execution of the deed of sale between Corpin and Leonardo in 1974 and its declaration for taxation purposes under Tax Declaration Nos. 5501, 819, 395, and 0554.
It also does not escape Our attention that Yong recognized Leonardo's leasehold right over the property in dispute. As stated by the CA:
Ty Wan Yong recognized Leonardo Palermo as the owner of the property and paid him monthly rentals. One of the main reasons why he stopped paying was Leonardo's construction of a house on the property.
In general, a lessee is not allowed to challenge the title of his lessor. 47 The Rules of Court protects the lessor from being questioned by the lessee regarding his/her title or better right of possession over the property subject of the lease. Section 2 (b), Rule 131 of the Rules of Court states that the tenant is not permitted to deny the title of his landlord at the time of the commencement of the relation of landlord and tenant between them. Article 1436 of the Civil Code likewise states that a lessee is estopped from asserting title to the thing leased or received, as against the lessor. 48
These provisions bar petitioners from contesting respondents' title over the subject premises. The juridical relationship between a lessor and lessee carries with it a recognition of the lessor's title. The lessee is estopped from denying the landlord's title, or to assert a better title not only in himself, but also in some third person while he remains in possession of the subject premises and until he surrenders possession to the landlord. This estoppel applies even though the lessor had no title at the time the relation of the lessor and lessee was created, and may be asserted not only by the original lessor, but also by those who succeed to his title. 49 Once a contact of lease is shown to exist between the parties, the lessee cannot by any proof, however strong, overturn the conclusive presumption that the lessor has a valid title to or a better right of possession to the subject premises than the lessee. 50
We likewise note the introduction of useful improvements on the property to prove respondents' actual possession thereof. As testified to by Leonardo's son, Maximo, his father constructed a building on the subject property and rented it out to Bartolome Corpin. According to Maximo, the building is still subsisting and is presently occupied by Edgar Piscos. His assertion of continuous possession was confirmed by a piece of document introduced as evidence and denominated as "III (a) Building and other Improvements, I. Owners Declaration." As correctly observed by the CA: DcHSEa
Appellants were also able to present as evidence a copy of a document entitled "III (a) Building and other Improvements, I. Owners Declaration" whereby it was stated that there was a two-storey commercial building in the name of Leonardo Palermo on the property. There was also a Declaration of Real Property wherein it was annotated that a two-storey commercial building was constructed in the subject lot in the name of Leonardo Palermo. 51
On the basis of the foregoing, coupled with the fact that respondents have always been in possession of the land, their right to question the fraudulent registration of their property does not prescribe. Succinctly, their action for reconveyance based on a fraudulent registration is imprescriptible.
As We held in Spouses Roberto Aboitiz v. Spouses Peter Po, 52 in all cases of registration procured by fraud, the owner may pursue all his legal and equitable remedies against the parties to such fraud subject only to the rights of any innocent holder for value of a certificate of title.
Indeed, recovery of property is not restricted to the mere fact that a certificate of title had been issued in favor of petitioners. Procurement of a title over a property does not furnish a shield for fraud. Needless to state, insofar as a person who fraudulently obtained a property is concerned, the registration of the property in said person's name would not be sufficient to vest in him or her the title to the property. A certificate of title merely confirms or records title already existing and vested. The indefeasibility of the title should not be used as a means to perpetrate fraud against the rightful owner of a real property. Good faith must concur with registration, otherwise, registration would be an exercise in futility. 53
Also, an action for reconveyance based on a void contract is imprescriptible. 54 In Daclag v. Macahilig, 55 We ruled that an action is not subject to prescription if it was based on a deed of sale that was null and void.
Here, apart from seeking the cancellation of petitioners' certificate of title based on constructive trust, respondent also sought to declare as nullity the forged Affidavit of Confirmation of Sale and Rights and Improvements (Affidavit) which had purportedly been executed by Leonardo Palermo three (3) years after his death.
Indeed, the Affidavit purportedly signed by Leonardo in favor of petitioners is null and void since Leonardo has already passed away at the time the document was executed.
Being an absolute nullity, the Affidavit is subject to attack anytime, in accordance with Article 1410 of the Civil Code that an action to declare the inexistence of a void contract does not prescribe. x x x An action for reconveyance based on a void contract is imprescriptible. As long as the land wrongfully registered under the Torrens system is still in the name of the person who caused such registration, an action in personam will lie to compel him to reconvey the property to the real owner. 56
In their last bid to wrest possession of the property from respondents, petitioners raise the nature of the property in dispute. They state that the property was formerly a public land, titled in Jose's name by virtue of a Miscellaneous Sales Application. Thus, petitioners posit that the respondents do not have the personality and authority to institute any action for annulment of title because such authority is vested in the Republic of the Philippines, through the Office of the Solicitor General.
We do not agree. SCaITA
The action filed by respondents seeks to transfer in their names the title registered in the name of petitioner Jose. In their Complaint, they alleged that their parents owned the land, having bought it from Rufino Corpin. The land was surveyed and subsequently declared for taxation purposes in the name of Leonardo under Tax Declaration Nos. 5501, 819, 395, and 0554. Respondents inherited the property upon the death of their parents. However, their peaceful possession thereof was disturbed when petitioners asserted their title to the land, which they have fraudulently procured. Certainly, respondents' complaint was not an action for reversion which requires the State to be the one to initiate in order for it to prosper. The distinction between the two actions was amplified in Spouses Galang v. Spouses Reyes57 where it was held:
An ordinary civil action for declaration of nullity of free patents and certificates of title is not the same as an action for reversion. The difference between them lies in the allegations as to the character of ownership of the realty whose title is sought to be nullified. In an action for reversion, the pertinent allegations in the complaint would admit State ownership of the disputed land. Hence in Gabila v. Bariga where the plaintiff in his complaint admits that he has no right to demand the cancellation or amendment of the defendant's title because even if the title were cancelled or amended the ownership of the land embraced therein or of the portion affected by the amendment would revert to the public domain, we ruled that the action was for reversion and that the only person or entity entitled to relief would be the Director of Lands.
On the other hand, a cause of action for declaration of nullity of free patent and certificate of title would require allegations of the plaintiff's ownership of the contested lot prior to the issuance of such free patent and certificate of title as well as the defendant's fraud or mistake; as the case may be, in successfully obtaining these documents of title over the parcel of land claimed by plaintiff. In such a case, the nullity arises strictly not from the fraud or deceit but from the fact that the land is beyond the jurisdiction of the Bureau of Lands to bestow and whatever patent or certificate of title obtained therefor is consequently void ab initio. The real party in interest is not the State but the plaintiff who alleges a pre-existing right of ownership over the parcel of land in question even before the grant of title to the defendant. In Heirs of Marciano Nagano v. Court of Appeals we ruled —
x x x from the allegations in the complaint x x x private respondents claim ownership of the 2,250-square meter portion for having possessed it in the concept of an owner, openly, peacefully, publicly, continuously and adversely since 1920. This claim is an assertion that the lot is private land x x x Consequently, merely on the basis of the allegations in the complaint, the lot in question is apparently beyond the jurisdiction of the Director of the Bureau of Lands and could not be the subject of a Free Patent. Hence, the dismissal of private respondents' complaint was premature and trial on the merits should have been conducted to thresh out evidentiary matters. It would have been entirely different if the action were clearly for reversion, in which case, it would have to be instituted by the Solicitor General pursuant to Section 101 of C.A. No. 141 x x x
It is obvious that private respondents allege in their complaint all the facts necessary to seek the nullification of the free patents as well as the certificates of title covering Lot 1015 and Lot 1017. Clearly, they are the real parties in interest in light of their allegations that they have always been the owners and possessors of the two (2) parcels of land even prior to the issuance of the documents of title in petitioners' favor, hence the latter could only have committed fraud in securing them —
x x x That plaintiffs are absolute and exclusive owners and in actual possession and cultivation of two parcels of agricultural lands herein particularly described as follows [technical description of Lot 1017 and Lot 1015 x x x 3. That plaintiffs became absolute and exclusive owners of the abovesaid parcels of land by virtue of inheritance from their late father, Honorio Dacut, who in turn acquired the same from a certain Blasito Yacapin and from then on was in possession thereof exclusively, adversely and in the concept of owner for more than thirty (30) years x x x 4. That recently, plaintiff discovered that defendants, without the knowledge and consent of the former, fraudulently applied for patent the said parcels of land and as a result thereof certificates of titles had been issued to them as evidenced by certificate of title no. P-19819 in the name of the Hrs. of Ambrocio Kionisala, and No. P-20229 in the name of Isabel Kionisala x x x 5. That the patents issued to defendants are null and void, the same having been issued fraudulently, defendants not having been and/or in actual possession of the litigated properties and the statement they may have made in their application are false and without basis in fact, and, the Department of Environment and Natural Resources not having any jurisdiction on the properties the same not being anymore public but already private property x x x aTHCSE
It is not essential for private respondents to specifically state in the complaint the actual date when they became owners and possessors of Lot 1015 and Lot 1017. The allegations to the effect that they were so preceding the issuance of the free patents and the certificates of title, i.e., "the Department of Environment and Natural Resources not having any jurisdiction on the properties the same not being anymore public but already private property," are unquestionably adequate as a matter of pleading to oust the State of jurisdiction to grant the lots in question to petitioners. If at all, the oversight in not alleging the actual date when private respondents' ownership thereof accrued reflects a mere deficiency in details which does not amount to a failure to state a cause of action. The remedy for such deficiency would not be a motion to dismiss but a motion for bill of particulars so as to enable the filing of appropriate responsive pleadings.
With respect to the purported cause of action for reconveyance, it is settled that in this kind of action the free patent and the certificate of title are respected as incontrovertible. What is sought instead is the transfer of the property, in this case the title thereof, which has been wrongfully or erroneously registered in the defendant's name. All that must be alleged in the complaint are two (2) facts which admitting them to be true would entitle the plaintiff to recover title to the disputed land, namely, (1) that the plaintiff was the owner of the land and, (2) that the defendant had illegally dispossessed him of the same.
We rule that private respondents have sufficiently pleaded (in addition to the cause of action for declaration of free patents and certificates of title) an action for reconveyance, more specifically, one which is based on implied trust. An implied trust arises where the defendant (or in this case petitioners) allegedly acquires the disputed property through mistake or fraud so that he (or they) would be bound to hold and reconvey the property for the benefit of the person who is truly entitled to it. In the complaint, private respondents clearly assert that they have long been the absolute and exclusive owners and in actual possession and cultivation of Lot 1015 and Lot 1017 and that they were fraudulently deprived of ownership thereof when petitioners obtained free patents and certificates of title in their names. These allegations certainly measure up to the requisite statement of facts to constitute an action for reconveyance. 58 [Emphases supplied]
Here, the complaint instituted by the respondents before the RTC was for the declaration of nullity of affidavit of confirmation of sale and rights and improvements, cancellation of original certificate of title, and reconveyance, not reversion. Thus, the real party in interest here is not the State but the respondents who claim a right of ownership over the property in question even before the issuance of a title in favor of petitioner Jose.
In sum, We find that respondents' cause of action was not subject to prescription. The existence of fraud and misrepresentation in the registration of the disputed property, as grounds for cancellation of patent and annulment of OCT No. P-37-300 have been proven by clear and convincing evidence. Altogether, We find no reversible error on the part of the CA in its assailed decision, the dispositions being sufficiently anchored on the evidence presented.
WHEREFORE, the present petition for review on certiorari is DENIED. The Decision dated August 25, 2017 and the Resolution dated June 21, 2018 of the Court of Appeals in CA-G.R. CV No. 04223-MIN, are AFFIRMED. Spouses Jose and Estrella Ty are directed to turn over and surrender Original Certificate of Title No. P-37-300 to the heirs of Spouses Leonardo Z. Palermo and Petronia Doloritos, who are declared as the real and true owners of the property covered by the said title.
SO ORDERED." cAaDHT
By authority of the Court:
(SGD.) LIBRADA C. BUENADivision Clerk of Court
By:
MARIA TERESA B. SIBULODeputy Division Clerk of Court
Footnotes
1. Rollo, pp. 3-55.
2. Penned by Associate Justice Oscar V. Badelles and concurred in by Associate Justices Romulo V. Borja and Ruben Reynaldo G. Roxas; id. at 42-52.
3. Id. at 53-55.
4. Id.
5. Id. at 43.
6. Id.
7. Id. at 43.
8. Id.
9. Id. at 44.
10. Id.
11. Id.
12. Id.
13. Id. at 45.
14. Id.
15. Id. at 50-51.
16. Id. at 25.
17. Id. at 30.
18. Id. at 117.
19. All pleadings, motions and papers filed in court, whether personally or by mail, shall bear counsel's current IBP official receipt number and date of issue, otherwise, such pleadings, motions and papers may not be acted upon by the court, without prejudice to whatever disciplinary action the court may take against the erring counsel who shall likewise be required to comply with the requirement within five (5) days from notice. Failure to comply with such requirement shall be a ground for further disciplinary sanction and for contempt of court.
20. Bar Matter No. 1132 (2003) — Re: Request to Require Lawyers to Indicate in the Pleading their Number in the Roll of Attorneys. — The Court Resolved, upon recommendation of the Office of the Bar Confidant to GRANT the request of the Board of Governors of the Integrated Bar of the Philippines and the Sangguniang Panlalawigan of Ilocos Norte to require all lawyers to indicate their Roll of Attorneys Number in all papers and pleadings submitted to the various judicial or quasi-judicial bodies in addition to the requirement of indicating the current Professional Tax Receipt (PTR) and the IBP Official Receipt or Life Member Number.
21. Re: Number and Date of MCLE Certificate of Completion/Exemption Required in All Pleadings/Motions (2008).
22. SEC. 11. Jurisdiction and Term. — A person commissioned as notary public may perform notarial acts in any place within the territorial jurisdiction of the commissioning court for a period of two (2) years commencing the first day of January of the n in which the commissioning is made, unless earlier revoked or the notary public has resigned under these Rules and the Rules of Court.
23. Rollo, pp. 143-146.
24. See Intestate Estate of Jose Uy v. Atty. Maghari III, 768 Phil. 10, 22 (2015).
25. 683 Phil. 141, 175 (2012).
26. Supra, note 24 at p. 25.
27. Id.
28. Cayetano v. Court of Appeals, G.R. No. 212599, June 29, 2015 (Unsigned Resolution).
29. Rollo, pp. 143-144.
30. Hi-Tone Marketing Corporation v. Baikal Realty Corporation, 480 Phil. 545 (2004).
31. Id., citing Walstrom v. Mapa, Jr., 260 Phil. 456, 468 (1990).
32. Philippine Economic Zone Authority v. Fernandez, 411 Phil. 107, 120 (2001).
33. 812 Phil. 108, 132 (2017).
34. Republic v. Heirs of Alejaga, 441 Phil. 656, 668 (2002).
35. Rollo, pp. 46-48.
36. Heirs of Wenceslao Tabia v. Court of Appeals, 545 Phil. 326, 340 (2007).
37. See Heirs of Pomposa Saludares v. Court of Appeals, 464 Phil. 958, 966 (2004).
38. G.R. No. 222166, June 10, 2020, citing Aniceto Uy v. Court of Appeals, 769 Phil. 705 (2005).
39. 671 Phil. 132 (2011).
40. Id. at 162, citing Crisostomo v. Garcia 516 Phil. 743, (2006).
41. 376 Phil. 825, 836 (1999), citing Faja v. Court of Appeals, 75 SCRA 441.
42. Id. at 446.
43. 298 Phil. 93, 99 (1993), citing Vda. de Portugal vs. IAC, 159 SCRA 178.
44. Id. at 334-335.
45. Supra.
46. Gatmaytan vs. De Leon, G.R. No. 222166, June 10, 2020.
47. Tamio v. Ticson, 485 Phil. 434, 437 (2004).
48. Samelo v. Manotok Services, Inc., 689 Phil. 411, 419 (2012).
49. Century Savings Bank v. Samonte, 648 Phil. 479, 492 (2010).
50. Supra note 48, at p. 420.
51. Rollo, p. 51.
52. See 810 Phil. 123, 142-143 (2017).
53. See Heirs of Tomas Arao v. Heirs of Pedro Eclipse, G.R. No. 211425, November 19, 2018.
54. Supra note 38.
55. 599 Phil. 28 (2009).
56. Id. at 31; See also Philippine National Bank v. Heirs of Estanislao Militar and Deogracias Militar, 504 Phil. 634 (2005); and Santos v. Santos, 418 Phil. 681 (2001).
57. 692 Phil. 652 (2012), citing Heirs of Kionisala v. Heirs of Dacut, 428 Phil. 249 (2002).
58. Id. at 660-665; See also Banguilan v. Court of Appeals, 550 Phil. 739, 749 (2007).
n Note from the Publisher: Copied verbatim from official document. January of the in which should be January of the year in which.