THIRD DIVISION
G.R. No. 199810, March 15, 2017
BEVERLY ANNE C. YAP, Petitioner, v. REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE REGIONAL EXECUTIVE DIRECTOR, DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES (DENR), Respondent.
D E C I S I O N
REYES, J.:
This is a petition for review on certiorari1 seeking to annul and set aside the Decision2 dated June 30, 2011 and Resolution3 dated November 14, 2011 of the Court of Appeals (CA) in CA-G.R. CV No. 01753-MIN which reversed and set aside the Decision4 dated October 24, 2008 of the Regional Trial Court (RTC) of Davao City, Branch 16, in Civil Case No. 29,705-03, dismissing the complaint for revers ion of a parcel of land.
From the Investigation Reports submitted by both the Department's Regional Office involved and this Office as well as from the other pieces of evidence available, both documentary and testimonial, it is obvious that actual fraud and bad faith have been committed by [Pagarigan] in his subject public land application which led to the issuance of the title. The following facts and circumstances are uncontroverted, to wit; that the [protestants] have been in actual occupation of the land in dispute since 1945 and have introduced improvements thereon; that [Pagarigan] never occupied the same nor his predecessor-in-interest, Consuelo dela Cruz, that [Pagarigan] misrepresented in his application that he was the actual occupant and that there were no others who occupied the lot in dispute; that the title was issued sans an actual ground survey; and that [Pagarigan] did not post a copy of his Notice for [FPA] on both the Bulletin Boards of Daliao and Lizardo as required by law.
x x x x
WHEREFORE, the instant appeal is hereby given DUE COURSE and the subject Decision appealed from SET ASIDE and REVOKED. Consequently, the Regional Executive Director (RED), DENR Region XI, Davao City, is hereby ordered to institute an action for cancellation of Original Certificate of Title (OCT) No. V-11182 of the Registry of Deeds of Davao City covering Lot No. 9087, Cad-102, and for the reversion of the property covered thereby to the government.
After the cancellation of the subject title and the land already reverted to the government, Regional Executive Director (RED) concerned shall then order the ground survey of the land in dispute and give due course to the public land applications of the [protestants].
SO ORDERED.15
WHEREFORE, it is the judgment of this court that[:]
- The plaintiff is entitled to expropriate the land subject of this case for the purpose of road right of way to the Davao Fish Port, which is for public use;
- The just compensation for the land is P278,[000].00;
- [Villamor and Yap] are the ones entitled to the payment of just compensation for the property subject of this case, and plaintiff is directed to pay the said amount to the said defendants;
- The Commissioner's Fee of P3,850.00 shall be paid by plaintiff to Asian Appraisal Company, Inc., and may be deducted from the just compensation for the land being expropriated.
This case is now considered closed.
SO ORDERED.20
IN VIEW of the foregoing, judgment is hereby rendered dismissing the instant complaint.
Defendants' [sic] [Bank] and Pagarigan compulsory counterclaim[s] are likewise dismissed in the absence of proof that there was malice or bad faith on [the respondent's] part when it sought the reversion of the property.
The dismissal of the action necessarily carries with it the dismissal of defendant's [sic] [Bank] cross-claim against [Pagarigan].
SO ORD[E]RED.23
WHEREFORE, We GRANT the appeal and REVERSE the decision of the [RTC]. We declare Free Patent No. (XI-1)5133 and [OCT] No. P-11182 issued in the name of [Pagarigan], and [TCT] No. T-366983 in the name of [Yap] and [Villamor], and all subsequent [TCTs] derived therefrom, as null and void. We order the reversion of Lot 9087, Cad. 102, [l]ocated in Daliao, Toril, Davao City, to the mass of public domain.
SO ORDERED.25
- Whether or not the decision of the CA is not in accord with the applicable decision enunciated by the Court in the case of Spouses Macadangdang v. Spouses Martinez;30
- Whether or not the CA departed from the rule declared by the Court in the case of Saad Agro-Industries, Inc. v. Republic of the Philippines,31 that in reversion proceedings the same must be proved by clear and convincing evidence, mere preponderance of evidence not even being adequate; and
- Whether or not the decision of the CA runs counter to the rule on res judicata.32
The second concept — conclusiveness of judgment — states that a fact or question which was in issue in a former suit and was there judicially passed upon and determined by a court of competent jurisdiction, is conclusively settled by the judgment therein as far as the parties to that action and persons in privity with them are concerned and cannot be again litigated in any future action between such parties or their privies, in the same court or any other court of concurrent jurisdiction on either the same or different cause of action, while the judgment remains unreversed by proper authority. It has been held that in order that a judgment in one action can be conclusive as to a particular matter in another action between the same parties or their privies, it is essential that the issue be identical. If a particular point or question is in issue in the second action, and the judgment will depend on the determination of that particular point or question, a former judgment between the same parties or their privies will be final and conclusive in the second if that same point or question was in issue and adjudicated in the first suit x x x. Identity of cause of action is not required but merely identity of issue.
Justice Feliciano, in Smith Bell & Company (Phils.), Inc. v. Court of Appeals x x x, reiterated Lopez v. Reyes x x x in regard to the distinction between bar by former judgment which bars the prosecution of a second action upon the same claim, demand, or cause of action, and conclusiveness of judgment which bars the relitigation of particular facts or issues in another litigation between the same parties on a different claim or cause of action.The general rule precluding the re-litigation of material facts or questions which were in issue and adjudicated in former action are commonly applied to all matters essentially connected with the subject matter of the litigation. Thus, it extends to questions necessarily implied in the final judgment, although no specific finding may have been made in reference thereto and although such matters were directly referred to in the pleadings and were not actually or formally presented. Under this rule, if the record of the former trial shows that the judgment could not have been rendered without deciding the particular matter, it will be considered as having settled that matter as to all future actions between the parties and if a judgment necessarily presupposes certain premises, they are as conclusive as the judgment itself.34 (Emphasis and underlining ours, and emphasis in the original deleted)
(c) In any other litigation between the same parties or their successors in interest, that only is deemed to have been adjudged in a former judgment or final order which appears upon its face to have been so adjudged, or which was actually and necessarily included therein or necessary thereto.
THE COURT'S RULING:
CLAIMS OF [THE PROTESTANTS]:
[The protestants] claim that the decision of the Secretary of the DENR in effect conferred ownership of the land to them, so that they should be paid the compensation and not defendants Yap and Villamor. In fact, defendant Malalis had declared the property for taxation purposes, and had paid the taxes thereon from the time they had occupied the land.
[The protestants] alleged that the land subject of this case is still in the name of [Pagarigan], and OCT No. P-11182 has not yet been cancelled and transferred in the names of defendants Yap and Villamor, who never even set foot on the land, nor declared the land for taxation purposes. The alleged sale of [the Bank] of the land to Yap and Villamor did not confer ownership of the land to them, because the land had not been delivered to them by the owner, and they have not exercised ownership over the same. In short their claim of ownership is based on a technicality, and no amount of technicality may serve as a solid foundation for the enjoyment of the fruits of fraud, [the protestants] alleged.
CLAIMS OF DEFENDANTS YAP AND VILLAMOR:
Defendants Yap and Villamor for their part, dispute the claim of [the protestants]. They alleged that they were buyers in good faith of the property, and in fact, the owner 's copy of OCT No. P-11182 has been delivered to them by [the Bank]. They alleged that the title which was issued to [Pagarigan] cannot be attacked collaterally as in this case. There should be a case filed in court to annul the title if indeed the same was fraudulently issued. For as long as the title is not yet declared null and void, the same remains valid, and whoever succeeds to the same is the owner of the land, they alleged. Moreover, since they are purchasers in good faith, and for value, they have a right to be protected, defendants Yap and Villamor alleged.
THE COURT'S RULING:
The Decision of the Secretary of the DENR, in the case cited by [the protestants] cannot justify the court to declare that the title issued to [Pagarigan] is void, and that (the protestants] are the owners of the property in question.
As correctly stated by defendants Yap and Villamor in their Memorandum, a Torrens title cannot be collaterally at tacked. The title must be attacked directly in a case filed in court specifically to annul the said title. The alleged fraud in the issuance of OCT No. P-11182 therefore cannot be raised in this case, and the court will not consider the decision of the DENR Secretary to say that the title of [Pagarigan] is void, and that the [protestants] are the owners of the land subject of this case.
Moreover, a Torrens title has the presumption of having been validly issued and the defendants Yap and Villarnor are not expected to look beyond the title to determine its validity. They are purchasers in good faith and for value, and are therefore entitled to the protection of the court.
Contrary to the allegation of [the protestants], there was in fact a valid delivery of the land to defendants Yap and Villarnor. The execution of a Deed of Sale in their favor by defendant [Bank], and delivery to them of the owner's copy of OCT No. P-11182 is a constructive delivery of the property sold to them.
Although defendants Yap and Villamor had not taken actual physical possession of the property covered by OCT No. P-11182, the same did not divest them of the ownership of the land covered by the said title. The occupation and possession of [the protestants] of the land in question did not ripen into ownership because their occupation (even in the concept of an owner) cannot defeat a Torrens title. OCT No. P-11182 is presumed to be valid until declared void by the courts.40
From the Investigation Reports submitted by both the Department's Regional Office involved and this Office as well as from the other pieces of evidence available, both documentary and testimonial, it is obvious that actual fraud and bad faith have been committed by [Pagarigan] in his subject public land application which led to the issuance of the title. The following facts and circumstances are uncontroverted, to wit; that the [protestants] have been in actual occupation of the land in dispute since 1945 and have introduced improvements thereon; that [Pagarigan] never occupied the same nor his predecessor-in-interest, Consuela de1a Cruz; that [Pagarigan] misrepresented in his application that he was the actual occupant and that there were no others who occupied the lot in dispute; that the title was issued sans an actual ground survey; and that [Pagarigan] did not post a copy of his Notice for [FPA] on both the Bulletin Board s of Daliao and Lizardo as required by law.45 (Emphasis ours)
It cannot be overemphasized that [the Bank], being in the business of extending loans secured by real estate mortgage, is familiar with rules on land registration. As such, it was, as here, expected to exercise more care and prudence than private individuals in its dealings with registered lands. Accordingly, given inter alia the suspicion-provoking presence of occupants other than the owner on the land to be mortgaged, it behooved them to conduct a more exhaustive investigation on the history of the mortgagor's title. That appellee Bank accepted in mortgage the property in question notwithstanding the existence of structures on the property and which were in actual, visible, and public possession of persons other than the mortgagor, constitutes gross negligence amounting to bad faith.46 (Citation omitted)
A buyer for value in good Faith is one who buys property of another, without notice that some other person has a right to, or interest in, such property and pays full and fair price for the same, at the time of such purchase, or before he has notice of the claim or interest of some other persons in the property. He buys the property with the well-founded belief that the person from whom he receives the thing had title to the property and capacity to convey it.
To prove good faith, a buyer of registered and titled land need only show that he relied on the face of the title to the property. He need not prove that he made further inquiry for he is not obliged to explore beyond the four corners of the title. Such degree of proof of good faith, however, is sufficient only when the following conditions concur: first, the seller is the registered owner of the land; second, the latter is in possession thereof; and third, at the time of the sale, the buyer was not aware of any claim or interest of some other person in the property, or of any defect or restriction in the title of the seller or in his capacity to convey title to the property.
Absent one or two of the foregoing conditions, then the law itself puts the buyer on notice and obliges the latter to exercise a higher degree of diligence by scrutinizing the certificate of title and examining all factual circumstances in order to determine the seller's title and capacity to transfer any inter est in the property. Under such circumstance, it is no longer sufficient for said buyer to merely show that he relied on the face of the title; he must now also show that he exercised reasonable precaution by inquiring beyond the title. Failure to exercise such degree of precaution makes him a buyer in bad faith.52 (Emphasis and italics in the original)
[T]he law protects to a greater degree a purchaser who buys from the registered owner himself. Corollarily, it requires a higher degree of prudence from one who buys from a person who is not the registered owner, although the land object of the transaction is registered. While one who buys from the registered owner does not need to look behind the certificate of title, one who buys from one who is not the registered owner is expected to examine not only the certificate of title but all factual circumstances necessary for him to determine if there are any flaws in the title of the transferor, or in his capacity to transfer the land.
This Court ha s consistently applied the stricter rule when it comes to deciding the issue of good faith of one who buys from one who is not the registered owner, but who exhibits a certificate of title.53 (Emphasis in the original)
Once a patent is registered and the corresponding certificate of title is issued, the land covered thereby ceases to be part of public domain and becomes private property, and the Torrens Title issued pursuant to the patent becomes indefeasible upon the expiration of one year from the date of such issuance. However, a title emanating from a free patent which was secured through fraud does not become indefeasible, precisely because the patent from whence the title sprung is itself void and of no effect whatsoever.61
True, once a patent is registered and the corresponding certificate of title [is] issued, the land covered by them ceases to be part of the public domain and becomes private property. Further, the Torrens Title issued pursuant to the patent becomes indefeasible a year after the issuance of the latter. However, this in defeasibility of a title does not attach to titles secured by fraud and misrepresentation. Well-settled is the doctrine that the registration of a patent under the Torrens System does not by itself vest title; it merely confirms the registrant's already existing one. Verily, registration under the Torrens System is not a mode of acquiring ownership.63 (Citations omitted)
It is also to the public interest that one who succeeds in fraudulently acquiring title to a public land should not be allowed to benefit therefrom, and the State should, therefore, have an even existing authority, thru its duly-authorized officers, to in quire into the circumstances surrounding the issuance of any such title, to the end that the Republic, thru the Solicitor General or any other officer who may be authorized by law, may file the corresponding action for the reversion of the land involved to the public domain, subject thereafter to disposal to other qualified persons in accordance with law. In other words, the indefeasibility of a title over land previously public is not a bar to an investigation by the Director of Lands as to how such title has been acquired, if the purpose of such investigation is to determine whether or not fraud had been committed in securing such title in order that the appropriate action for reversion may be filed by the Government.65
Endnotes:
* Designated additional Member per Raffle dated February 15, 2017 vice Associate Justice Francis H. Jardeleza.
1Rollo, pp. 20-41.
2 Penned by Associate Justice Edgardo T. Lloren, with Associate Justices Romulo V. Borja and Carmelita S. Manahan concurring; id. at 79-92.
3 Id. at 59-60.
4 Rendered by Presiding Judge Emmanuel C. Carpio; CA rollo, pp. 50-56.
5 Records, Vol. I, pp. 243-244.
6Rollo, p. 45.
7 Records, Vol. I, p. 240.
8 Records, Vol. II, pp. 434-435.
9Rollo, p. 45.
10 Id.
11 Records Vol. I, pp. 245-246.
12 Complaint for Injunction with Application for the Issuance of Temporary Restraining Order and/or Preliminary Injunction, Damages and Attorney's fees.
13Rollo, p. 46.
14 Id. at 150-154.
15 Id. at 153-154.
16 Records, Vol. II, p. 436.
17Rollo, p. 46.
18 Id. at 47.
19 Rendered by Judge Isaac G. Robillo, Jr., id. at 154A-157.
20 Id. at 156-157.
21 Records, Vol. I, pp. 3-11.
22 CA rollo, pp. 50-56.
23 Id. at 56.
24Rollo, pp. 79-92.
25 Id. at 91-92.
26 CA rollo, pp. 194-198.
27 Id. at 174-191.
28 ld. at 201-206.
29Rollo, pp. 59-60.
30 490 Phil. 774 (2005).
31 534 Phil. 648 (2006).
32Rollo, pp. 23-24.
33 Supra note 31.
34Republic of the Philippines v. Mega Pacific eSolutions, Inc., et al., G.R. No. 184666, June 27, 2016, citing Calalang v. Register of Deeds of Quezon City, 301 Phil. 91, 103-104 (1994); Rodriguez v. Philippine Airlines, Inc., G.R. No. 178501, January 11, 2016, 778 SCRA 334, 376-377; Facura, et al. v. CA, et al., 658 Phil. 554, 587 (2011).
35 271 Phil. 768 (1991).
36 Id. at 783-784.
37 301 Phil. 91 (1994).
38 Id. at 103-104.
39Republic of the Philippines v. Mega Pacific eSolutions, Inc., et. al., supra note 34.
40Rollo, pp. 155-156.
41 Black's Law Dictionary, 8th Ed., p. 849.
42 Court's First Division Resolution dated July 1, 2015 in G.R. No. 169952 entitled Nereo J. Paculdo v. Bonifacio C. Regalado.
43Presidential Decree No. 1529, Section 48.
44Noblado v. Alfonso, G.R. No. 189229, November 23, 2015, 775 SCRA 178, 187-188.
45Rollo, p. 153.
46 Id. at 88.
47 Id. at 88-89.
48 Id. at 26.
49Spouses Pudadera v. Magallanes, et al., 647 Phil. 655, 673 (2010).
50 Rollo, pp. 154A-155.
51 G.R. Nos. 185857-58, June 29, 2016.
52 Id., citing Spouses Bautista v. Silva, 533 Phil. 627, 638-639 (2006).
53Spouses Yu v. Pacleb, et al. 599 Phil. 354, 366 (2009), citing Revilla and Fajardo v. Galindez, 107 Phil. 480, 485 (1960).
54 Supra note 31.
55 361 Phil. 319 (1999).
56 Id.
57Rollo, pp. 150-154 .
58 Records, Vol. I, p. 247.
59 Id. at 150.
60 681 Phil. 39 (2012).
61 Id. at 52-53.
62 441 Phil. 656 (2002).
63 Id. at 674.
64 500 Phil. 288 (2005).
65 Id. at 299-300, citing Republic of the Philippines v. CA, 262 Phil. 677, 685 (1990).