THIRD DIVISION
G.R. No. 185757, March 02, 2016
SPOUSES VIRGILIO DE GUZMAN, JR. [SUBSTITUTED BY HIS WIFE, LYDIA S. DE GUZMAN, AND CHILDREN, NAMELY, RUEL S. DE GUZMAN, ET AL. AND LYDIA S. DE GUZMAN, Petitioners, v. COURT OF APPEALS, MINDANAO STATION, LAMBERTO BAJAO, HEIR OF SPOUSES LEONCIO* BAJAO AND ANASTACIA Z. BAJAO, Respondents.
D E C I S I O N
JARDELEZA, J.:
This is a Petition for Review on Certiorari1 filed by Spouses Virgilio de Guzman, Jr.2 and Lydia S. de Guzman (petitioners) assailing the Decision3 and Resolution4 dated August 27, 2008 and November 19, 2008, respectively, of the Court of Appeals (CA), Mindanao Station, in CA-G.R. CV No. 00194-MIN. The CA reversed and set aside the Decision5 of the Regional Trial Court (trial court), Branch 42, Misamis Oriental, dated October 22, 2004 which granted the action for reconveyance and damages in favor of petitioners.
WHEREFORE, all the foregoing premises considered, by preponderance of evidence, this Court finds for the plaintiffs and hereby orders the defendant:The trial court found the two Deeds of Absolute Sale free from infirmities.37 It ruled that their execution was equivalent to the delivery of the thing sold;38 registration not being necessary to make the contract of sale valid and effective as between the parties.39 Citing Sanchez, et al. v. De la Cruz, et al.,40 and Philippine Suburban Development Corporation v. Auditor General,41 the trial court held that as between the parties and their privies, an unrecorded deed of sale covering land registered under the Torrens system passes title of ownership once the land is conveyed to the vendee. Failure of registration does not, at anytime after the sale, vitiate or annul the right of ownership conferred to such sale.42
1. to reconvey to the plaintiffs the four hundred eighty square meter lot in question in accordance with the survey plan made by Engr. Pedro Q. Gonzales which was approved by Acting Director of Lands Guillermo C. Ferraris as certified by the Office of the Regional Executive Director of the Department of Environment and Natural Resources and to surrender TCT No. 7133 to the Register of Deeds of Misamis Oriental for appropriate annotation;
2. to pay to plaintiffs the sum of Twenty Five Thousand Pesos (P25,000.00) as moral damages; and
3. to pay the costs.
SO ORDERED.36ChanRoblesVirtualawlibrary
WHEREFORE, the appeal is hereby GRANTED. The Decision appealed from is REVERSED AND SET ASIDE and as a consequence, the Complaint for Reconveyance with Preliminary Mandatory Injunction and Damages is dismissed.The CA noted that an implied trust between the parties under Article 145653 of the Civil Code was created at the time Anastacia Bajao and respondent executed the Extrajudicial Settlement on September 26, 1980, with respondent becoming the trustee who holds the property in trust for the benefit of petitioners.54 The CA held that an action for reconveyance based on an implied trust prescribes in 10 years from the registration of title in the Office of the Register of Deeds.55 Thus, petitioners' action for reconveyance filed in January 2000 has already prescribed since more than 10 years have lapsed from October 1981, the date of registration of respondent's title.56
SO ORDERED.52ChanRoblesVirtualawlibrary
We cannot turn a blind eye on glaring misapplications of the law or patently erroneous decisions or resolutions simply because the parties failed to raise these errors before the court. Otherwise, we will be allowing injustice by reason of the mistakes of the parties' counsel and condoning reckless and negligent acts of lawyers to the prejudice of the litigants. Failure to rule on these issues amounts to an abdication of our duty to dispense justice to all parties.70ChanRoblesVirtualawlibraryWe have explained the rationale behind this prohibition in Republic of the Philippines v. Court of Appeals:71
The prohibition against the encumbrance — lease and mortgage included — of a homestead which, by analogy applies to a free patent, is mandated by the rationale for the grant, viz.:Under Section 124 of the Public Land Act, any acquisition, conveyance, alienation, transfer, or other contract made or executed in violation of Sections 118 to 123 of the Public Land Act shall be unlawful and null and void from its execution. The violation shall also produce the effect of annulling and cancelling the grant, title, patent or permit originally issued, recognized or confirmed actually or presumptively. The violation shall also cause the reversion of the property and its improvements to the State. The contract executed in violation of these sections being void, it is not susceptible of ratification, and the action for the declaration of the absolute nullity of such a contract is imprescriptible.73
chanRoblesvirtualLawlibrary"It is well-known that the homestead laws were designed to distribute disposable agricultural lots of the State to land-destitute citizens for their home and cultivation. Pursuant to such benevolent intention the State prohibits the sale or encumbrance of the homestead (Section 116) within five years after the grant of the patent. After that five-year period the law impliedly permits alienation of the homestead; but in line with the primordial purpose to favor the homesteader and his family the statute provides that such alienation or conveyance (Section 117) shall be subject to the right of repurchase by the homesteader, his widow or heirs within five years. This Section 117 is undoubtedly a complement of Section 116. It aims to preserve and keep in the family of the homesteader that portion of public land which the State had gratuitously given to him. It would, therefore, be in keeping with this fundamental idea to hold, as we hold, that the right to repurchase exists not only when the original homesteader makes the conveyance, but also when it is made by his widow or heirs. This construction is clearly deducible from the terms of the statute."72ChanRoblesVirtualawlibrary
Section 118 does not exempt patentees and their purported transferees who had no knowledge of the issuance of the patent from the prohibition against alienation; for the law does not say that the five years are to be counted "from knowledge or notice of issuance" of the patent or grant. The date of the issuance of the patent is documented and is a matter of government and official record. As such, it is more reliable and precise than mere knowledge, with its inherent frailties. Indeed, the policy of the law, which is to give the patentee a place where to live with his family so that he may become a happy citizen and a useful member of our society, would be defeated were ignorance of the issuance of a patent a ground for the non-application of the prohibition.76ChanRoblesVirtualawlibraryNonetheless, although Section 124 states that a violation of Section 118 causes the reversion of the property to the State, we have held that a private individual may not bring an action for reversion or any action which would have the effect of cancelling a free patent and the corresponding certificate of title issued on the basis thereof, with the result that the land covered thereby will again form part of the public domain, since only the Solicitor General or the officer acting in his stead may do so.77 Until then, respondent, as heir of the vendors, has the better right to remain in possession of the property.78
In De los Santos v. Roman Catholic Church of Midsayap, a homestead patent covering a tract of land in Midsayap, Cotabato was granted to Julio Sarabillo (Sarabillo) on December 9, 1938. (XT No. RP-269 was issued to Sarabillo on March 17, 1939. On December 31, 1940, Sarabillo sold two hectares of land to the Roman Catholic Church of Midsayap (Church). Upon Sarabillo's death, Catalina de los Santos (De los Santos) was appointed administratrix of his estate. In the course of her administration, De los Santos discovered that Sarabillo's sale of land to the Church was in violation of Section 118 of the Public Land Act, prompting her to file an action for the annulment of said sale. The Church raised as defense Section 124 of the Public Land Act, as well as the principle of pari delicto. The Court, in affirming the CFI judgment favoring De los Santos, ratiocinated:With respect to the purchase price of P2,400 which petitioners paid for the land, respondent should return it with interest.84 We similarly ruled in the recent case of Tingalan v. Spouses Melliza85 which also involved the void sale of land covered by the Public Land Act, as amended. We applied the rule that upon annulment of the sale, the purchaser's claim is reduced to the purchase price and its interest.86x x x
x x x Here [De Los Santos] desires to nullify a transaction which was done in violation of the law. Ordinarily the principle of pari delicto would apply to her because her predecessor-in-interest has carried out the sale with the presumed knowledge of its illegality, but because the subject of the transaction is a piece of public land, public policy requires that she, as heir, be not prevented from re-acquiring it because it was given by law to her family for her home and cultivation. This is the policy on which our homestead law is predicated. This right cannot be waived. "It is not within the competence of any citizen to barter away what public policy by law seeks to preserve". We are, therefore, constrained to hold that [De Los Santos] can maintain the present action it being in furtherance of this fundamental aim of our homestead law.x x x
Jurisprudence, therefore, supports the return of the subject properties to respondents as Gerardo's heirs following the declaration that the Absolute Deed of Sale dated July 10, 1951 between Gorardo and Juan is void for being in violation of Section 118 of the Public Land Act, as amended. That the subject properties should revert to the Slate under Section 124 of the Public Land Act, as amended, is a non-issue, the State not even being a party herein.83ChanRoblesVirtualawlibrary
Endnotes:
* Also referred to as "Lencito" in some parts of the rollo.
1Rollo, pp. 3-17.
2 Petitioner Virgilio de Guzman died on January 10, 2004 during the pendency of the suit. In a Resolution dated August 17, 2009, we granted the substitution of the surviving heirs of Virgilio de Guzman, namely, Lydia S. de Guzman, Ruel S. de Guzman, Lyla S. de Guzman, Emme D. Butted and Lyn S. de Guzman as parly-petitioners in this case. Id. at 57-58.
3Id. at 26-35. Penned by Associate Justice Ruben C. Ayson with Associate Justices Rodrigo F. Lim, Jr. and Michael P. Elbinias concurring.
4Id. at 37-39.
5Id. at 18-24. Penned by Judge Oscar N. Abella.
6 Leoncio Bajao was married lo Anastacia Bajao. Collectively, they are referred to as Spouses Bajao here.
7 RTC records, pp. 173-200.
8Rollo, pp. 27-28.
9 RTC records, p. 170.
10Id. at 171.
11Id. at 170-171.
12Rollo, pp. 7-8.
13Id. at 28.
14 RTC records, p. 177.
15Id. at 175. See also rollo, p. 28.
16Rollo, p. 28.
17 RTC records, p. 180.
18Id. at 5, rollo, p. 28.
19Rollo, p. 28.
20 RTC records, p. 238.
21Id. at 205-209.
22Rollo, p. 28.
23Id. at 28-29.
24 RTC records, pp. 45, 209.cralawred
25Id. at 204, 228-229; rollo, p. 29.
26 RTC records, p. 3.cralawred
27Id. at 3-4, 308.
28Id. at 1-9.
29Id. at 5.
30Id. at 6.
31Id. at 42-50.
32Id. at 47.
33Id. at 45-47.
34Id. at 46.
35Rollo, pp. 18-24.
36Id. at 23.
37Id. at 20.
38Id. at 21.
39Id.
40 OG 29 July 20, 1959, as cited in the RTC Decision, rollo, p. 21.
41 G.R. No. L-19545, April 18, 1975, 63 SCRA 397.
42Rollo, p. 21.
43Id. at 22-23.
44Id. at 22.
45Id.
46 RTC records, p. 339.
47 CA rollo, pp. 36-59.
48Id. at 49-52.
49Id. at 52-53.
50Id. at 57-58.
51Rollo, pp. 26-35.
52Id. at 35. Emphasis in the original.
53 Art. 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.
54Rollo, p. 32.
55Id. at 32-33.
56Id. at 33.
57Id. at 33-34.
58Id. at 33.
59Id. at 34.
60Id. at 34-35. Emphasis in the original.
61 CA rollo, pp. 84-95.
62Id. at 86-90.
63Id. at 87-88.
64Id. at 90.
65Rollo, pp. 37-40.
66 RTC records, p. 173.
67Id. at 200; TSN, November 20, 2000, p. 35.
68 Sec. 118. Except in favor of the Government or any of its branches, units, or institutions, lands acquired under free patent or homestead provisions shall not be subject to encumbrance or alienation from the date of the approval of the application and for a term of five years from and after the date of issuance of the patent or grant, nor shall they become liable to the satisfaction of any debt contracted prior to the expiration of said period, but the improvements or crops on the land may be mortgaged or pledged to qualified persons, associations, or corporations. xxx (Emphasis and underscoring supplied.)
69 In Beniga v. Bugas, G.R. No. L-28918, September 29, 1970, 35 SCRA 111, 114-115, we explained that the alienation of lands acquired by homestead or free patent grants is forbidden from the date of approval of the application, up to and including the fifth year from and after the date of the issuance of the patent or grant. We also held that the period is not computed/from the date of registration with the Register of Deeds or from the date of the certificate of title.
70Garcia v. Ferro Chemicals, Inc., G.R. No. 172505, October 1, 2014, 737 SCRA 252, 264.
71 G.R. No. 100709, November 14, 1997, 281 SCRA 639.
72Id. at 650-651, citing Pascua v. Talens, 80 Phil. 792 (1948). Emphasis ours.
73 See Binayug v. Ugaddan, G.R. No. 181623, December 5, 2012, 687 SCRA 260, 273, citing Heirs of Policronio M. Ureta, Sr. v. Heirs of Liberato M. Ureta, G.R. No. 165748, September 14, 2011, 657 SCRA 555, 580.
74 RTC records, p. 173.
75 G.R. No. L-28918, September 29, 1970, 35 SCRA 111.
76Id. at 115, citations omitted.
77Egao v. Court of Appeals, G.R. No. 79787, June 29, 1989, 174 SCRA 484, 492-493, citing Sumail v. Judge of the Court of First Instance of Cotabalo, et al., 96 Phil. 946, 953 (1955); Lucas v. Durian, 102 Phil. 1157, 1158 (1957); and Acot, et al. v. Kempis, 55 O.G., p. 2907, April 20, 1959.
78 See Binayug v. Ugaddan, G.R. No. 181623, December 5, 2012, 687 SCRA 260, 273-275, citing De los Santos v. Roman Catholic Church of Midsayap, et al., 94 Phil. 405, 411 (1954).
79Philippine National Bank v. De los Reyes, G.R. Nos. 46898-99, November 28, 1989, 179 SCRA 619.
80Id.; See also Binayug v. Ugaddan, supra, citing De los Santos v. Roman Catholic Church of Midsayap, et al., supra.
81 G.R. No. 181623, December 5, 2012, 687 SCRA 260.
82 94 Phil. 405 (1954).
83Supra note 81 at 273-276. Emphasis in the original.
84Baje v. Court of Appeals, G.R. No. L-18783, May 25, 1964, 11 SCRA 34, 39, citing Angeles, et al. v. Court of Appeals, et al., 102 Phil. 1006, 1012 (1958) and Medel v. Eliazo, 106 Phil. 1157 (1959). See also Philippine National Bank v. De los Reyes, G.R. Nos. 46898-99, November 28, 1989, 179 SCRA 619, 628 and De Leon v. Court of Appeals, G.R. No. 88788, September 4, 1992, 213 SCRA 596, 602.
85 G.R. No. 195247, June 29, 2015.
86De los Santos v. Roman Catholic Church of Midsayap, et al., supra note 82 at 412.
87 RTC records, pp. 6, 228.
88 Art. 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.
89Brito, Sr. v. Dianala, G.R. No. 171717, December 15, 2010, 638 SCRA 529, 535-537.
90 RTC records, p. 1.
91Yared v. Tiongco, G.R. No. 161360, October 19, 2011, 659 SCRA 545, 552-553.
92Francisco v. Rojas, G.R. No. 167120, April 23, 2014, 723 SCRA 423, 454, citing Philippine Economic Zone Authority v. Fernandez, G.R. No. 138971, June 6, 2001, 358 SCRA 489.
93Rollo, p. 11.
94Id. at 96.
95Heirs of Pedro Clemeña y Zurbano v. Heirs of Irene B. Bien, G.R. No. 155508, September 11, 2006, 501 SCRA 405, 415.
96Far Eastern Surely and Insurance Co., Inc. v. People, G.R. No. 170618, November 20, 2013, 710 SCRA 358, 367-369.
97 In the case of David v. Misamis Occidental II Electric Cooperative, Inc., G.R. No. 194785, July 11, 2012, 676 SCRA 367, 373-374, the recognized exceptions are as follows:
chanRoblesvirtualLawlibrary(1) When the conclusion is a finding grounded entirely on speculation, surmises and conjectures;98Rollo, p. 33.
(2) When the inference made is manifestly mistaken, absurd or impossible;
(3) Where there is a grave abuse of discretion;
(4) When the judgment is based on a misapprehension of facts;
(5) When the findings of fact are conflicting;
(6) When the Court of Appeals, in making its findings, went beyond the issues of the case and the same is contrary to the admissions of both appellant and appellee;
(7) When the findings are contrary to those of the trial court;
(8) When the findings of fact are without citation of specific evidence on which the conclusions are based;
(9) When the facts set forth in the petition as well as in the petitioner's main and reply briefs are not disputed by the respondents; and
(10) When the findings of fact of the Court of Appeals are premised on the supposed absence of evidence and contradicted by the evidence on record.
99Ramos v. Obispo, G.R. No. 193804, February 27, 2013, 692 SCRA 240, 248-249.
100Id.
101 TSN, February 26, 2001, p. 27.
102Id. at 26-29.
103 RTC records, pp. 240, 242-243. See also TSN, October 28, 2003, p. 21.
104 TSN, May 16, 2002, p. 7.
105 RTC records, pp. 232-233.
106Id. at 184-186.
107Id. at 166-169.
108Id. at 18.
109 See Roman Catholic Archbishop of Manila v. Ramos, G.R. No. 179181, November 18, 2013, 709 SCRA 576, 595.
110 RTC records, pp. 232-233.
111Id. at 236-237.
112Id. at 234-235.
113Republic v. Sta. Ana-Burgos, G.R. No. 163254, June 1, 2007, 523 SCRA 309, 316, citing Ganila v. Court of Appeals, G.R. No. 150755, June 28, 2005, 461 SCRA 435, 448, also citing Alcaraz v. Tangga-an, G.R. No. 128568, April 9, 2003, 401 SCRA 84, 90-91.
114Nacar v. Gallery of Frames, G.R. No. 189871, August 13, 2013, 703 SCRA 439. See also Tumibay v. Lopez, G.R. No. 171692, June 3, 2013, 697 SCRA 21, 45.