THIRD
DIVISION
|
RABAJA RANCH DEVELOPMENT
CORPORATION, Petitioner, - versus - AFP
RETIREMENT AND SEPARATION
BENEFITS SYSTEM, Respondent. |
G.R. No.
177181
Present: YNARES-SANTIAGO, J., Chairperson, CHICO-NAZARIO, VELASCO, JR., and NACHURA, JJ Promulgated: July 7,
2009 |
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DECISION
NACHURA, J.:
Before this
Court is a Petition[1]
for Review on Certiorari under Rule
45 of the Rules of Civil Procedure, seeking the reversal of the Court of
Appeals (CA) Decision[2]
dated June 29, 2006, which reversed and set aside the
Decision[3]
of the Regional Trial Court (RTC) of
Pinamalayan, Oriental Mindoro, Branch 41,
dated June 3, 2004.
The Facts
Petitioner Rabaja Ranch Development
Corporation (petitioner), a domestic corporation, is a holder of Transfer
Certificate of Title (TCT) No. T-88513[4]
covering the subject property particularly identified as
Respondent Armed Forces of the
Philippines Retirement and Separation Benefits System (AFP-RSBS) is a
government corporation, which manages the pension fund of the Armed Forces of
the Philippines (AFP), and is duly organized under Presidential Decree (P.D.)
No. 361,[5]
as amended by P.D. No. 1656[6]
(respondent). Respondent is a holder of TCT No. T-51382[7]
covering the same subject property.
On September 1, 1998, petitioner filed a
Complaint[8]
for Quieting of Title and/or Removal of Cloud from Title before the RTC. Trial
on the merits ensued.
Petitioner averred that on September 6,
1955, Free Patent No. V-19535[9]
(Free Patent) was issued in the name of
Jose Castromero (Jose). On June 1, 1982, the Free Patent was registered,
and Original Certificate of Title (OCT) No. P-2612[10]
covering the subject property was issued in the name of Jose. Sometime in the
first half of 1982, Jose sold the subject property to Spouses Sigfriedo and
Josephine Veloso[11]
(spouses Veloso), and TCT No. T-17104[12]
was issued in favor of the latter. Spouses Veloso, in turn, sold the subject
property to petitioner for the sum of P634,116.00 on January 17, 1997,[13]
and TCT No. T-88513 was issued in petitioner’s name. Petitioner alleged that it
was the lawful owner and possessor of the subject property.
Traversing the complaint, respondent, in
its Answer,[14]
claimed that its title over the subject property was protected by the
Respondent stated that on April 30,
1966, Homestead Patent No. 113074 (Homestead Patent) was issued in the name of
Charles Soguilon (Charles). On May 27, 1966, the Homestead Patent was
registered[15]
and OCT No. RP-110 (P-6339)[16]
was issued in Charles's name, covering the same property. On October 18, 1982,
Charles sold the subject property to JMC Farm Incorporated (JMC), which was
then issued TCT No. 18529.[17]
On August 30, 1985, JMC obtained a loan from respondent in the amount of P7,000,000.00, with real
estate mortgage over several parcels of land including the subject property.[18]
JMC failed to pay; hence, after
extra-judicial foreclosure and public sale, respondent, being the highest
bidder, acquired the subject property and was issued TCT No. T-51382 in its
name. Respondent contended that from the time it was issued a title, it took
possession of the subject property until petitioner disturbed respondent's
possession thereof sometime in 1997. Thus,
respondent sent petitioner a Demand Letter[19]
asking the latter to vacate the subject property. Petitioner replied that it
was not aware of respondent's claim.[20]
Presently, the subject property is in
the possession of the petitioner.[21]
The RTC's Ruling
On June
3, 2004, the RTC ruled in favor of the petitioner on the ground that
petitioner's title emanated from a title older than that of the respondent.
Moreover, the RTC held that there were substantial and numerous infirmities in
the Homestead Patent of Charles. The RTC found that there was no record in the
Bureau of Lands that Charles was a homestead applicant or a grantee of
Homestead Patent No. 113074. Upon inquiry, the RTC also found that a similar
IN VIEW OF ALL THE FOREGOING, judgment is hereby rendered in favor of the plaintiff and against the defendant, as follows:
1. DECLARING as valid OCT No. P-2612, in the name of Jose Castromero, and the subsequent TCT No. T-17104 in the name of the spouses, Siegfriedo A. Veloso and Josephine Sison Veloso and TCT No. T-88513, in the name of plaintiff Rabaja Ranch & Development Corporation;
2. DECLARING plaintiff as the true and lawful owner of the lot in question covered by TCT No. T-88513;
3. DECLARING as null and void OCT No.
RP-110 (P-6339), in the name of Charles Soguilon and its derivative
titles, TCT No.
4. DIRECTING the Register of Deeds, City of
5. NO PRONOUNCEMENT as to damages and attorney's fees for plaintiff and defendant's counterclaim is hereby dismissed. No Cost.
SO ORDERED.
Aggrieved,
respondent appealed to the CA.[23]
The CA's Ruling
On June 29, 2006, the CA reversed and
set aside the RTC's Decision upon the finding that Charles's Homestead Patent
was earlier registered than Jose's Free Patent. The CA held that Jose slept on
his rights, and thus, respondent had a better right over the subject property. Further, the CA opined that while “it is
interesting to note that petitioner's claim that
Petitioner filed a Motion for
Reconsideration,[24]
which the CA, however, denied in its Resolution[25]
dated March 26, 2007.
The Issues
Hence,
this Petition based on the following grounds:
a) The
CA decided a question of substance not in accordance with existing law and
jurisprudence.
b) The CA Decision was based on a gross misapprehension or
non-apprehension of facts.
Petitioner asseverates that Homestead
Patent No. 113074 is not found in the files of the Land Management Bureau, nor
does Charles's name appear as an applicant or a patentee; that, similarly,
Homestead Patent No. V-113074 was
actually issued to Mariano Costales over a parcel of land in Mindanao and not
in Mindoro; that, being fake and spurious, Charles's Homestead Patent is void ab initio and, as such, does not
produce or transmit any right; that the CA completely ignored the RTC's factual
findings based on documentary and testimonial evidence, particularly of the
invalidity and infirmities of the Homestead Patent; that said Homestead Patent
does not legally exist, hence, is not registrable; that respondent's assertion
-- that since the issuance of the Homestead Patent in 1966, records and
documents have not been properly kept -- should be discarded, as petitioner's
Free Patent which was issued way back in 1955 is still intact and is of record;
that a Homestead Patent, being a contract between the Government and the
grantee, must bear the consent of the Government; and, Charles's Homestead
Patent being a simulation, cannot transmit any right; that the earlier
registration of the Homestead Patent has no legal effect, as the same is merely
simulated; and that OCT No. No. RP-110 (P-6339) and all derivative titles issued, including respondent's title, are null and void.
Petitioner submits that it has a better right over the subject property than
respondent.[26]
Respondent takes issue with
petitioner’s claim that the Homestead Patent is spurious or fake, the same
being a question of fact not proper in a petition for review on certiorari before this Court. Respondent also posits that the factual
findings of the CA are conclusive and binding on this Court, as such findings
are based on record; that respondent has a better right over the subject
property because only the certified copy and not the original copy of the Free
Patent was transcribed and registered with the Register of Deeds of Calapan,
Oriental Mindoro; that the Homestead Patent was duly transcribed on May 27,
1966, way ahead of the registration of the Free Patent on June 1, 1982; that
the CA was correct in ruling that Section 122[27]
of Act No. 496 (The Land Registration Act) as amended by Section 103[28]
of P.D. No. 1529 (The Property Registration Decree) provides that registration
of the Patent with the Register of Deeds is the operative act to affect and
convey the land; and that the fact that the Homestead Patent was duly
registered, said Patent became indefeasible as a Torrens Title. Moreover,
respondent avers that the petitioner failed to prove by preponderance of
evidence that the Homestead Patent is spurious or fake. Respondent maintains
that it is the Free Patent which is spurious since what was registered was only
the certified and not the original copy of the Free Patent.[29]
The issues may, thus, be summed up in
the sole question of ─
WHETHER OR NOT RESPONDENT'S TITLE WHICH ORIGINATED FROM A FAKE AND
SPURIOUS
Simply put, the issue is who, between
the petitioner and respondent, has a better right over the subject property.
Our Ruling
The instant Petition is bereft of merit.
While
this Court, is not a trier of facts and is not required to examine or contrast
the oral and documentary evidence de novo,
nonetheless, it may review and, in proper cases, reverse the factual findings
of lower courts when the findings of fact of the trial court are in conflict
with those of the appellate court.[31] In this case, we see the need to review the
records.
The special circumstances attending
this case cannot be disregarded. Two certificates of title were issued covering
the very same property, deriving their respective authorities from two
different special patents granted by the Government. The Free Patent was issued
to Jose on September 6, 1955 as opposed to the Homestead Patent which was issued
to Charles on April 30, 1966. The latter was registered on May 27, 1966, ahead
of the former which was registered only on June 1, 1982. Each patent generated a
certificate of title issued to a different set of individuals. Over the years,
the subject property was eventually sold to the contending parties herein, who
both appear to be buyers in good faith and for value.
Petitioner now seeks relief before this
Court on the main contention that the registered Homestead Patent from which
respondent derived its title, is fake and spurious, and is, therefore, void ab initio because it was not issued, at
all, by the Government.
We are not convinced.
Our ruling in Republic v. Guerrero,[32]
is instructive:
Fraud is of two kinds: actual or constructive. Actual or positive fraud proceeds from an intentional deception practiced by means of the misrepresentation or concealment of a material fact. Constructive fraud is construed as a fraud because of its detrimental effect upon public interests and public or private confidence, even though the act is not done with an actual design to commit positive fraud or injury upon other persons.
Fraud may also be either extrinsic or intrinsic. Fraud is regarded as intrinsic where the fraudulent acts pertain to an issue involved in the original action, or where the acts constituting the fraud were or could have been litigated therein. The fraud is extrinsic if it is employed to deprive parties of their day in court and thus prevent them from asserting their right to the property registered in the name of the applicant.
The distinctions assume significance because only actual and extrinsic fraud had been accepted and is contemplated by the law as a ground to review or reopen a decree of registration. Thus, relief is granted to a party deprived of his interest in land where the fraud consists in a deliberate misrepresentation that the lots are not contested when in fact they are; or in willfully misrepresenting that there are no other claims; or in deliberately failing to notify the party entitled to notice; or in inducing him not to oppose an application; or in misrepresenting about the identity of the lot to the true owner by the applicant causing the former to withdraw his application. In all these examples, the overriding consideration is that the fraudulent scheme of the prevailing litigant prevented a party from having his day in court or from presenting his case. The fraud, therefore, is one that affects and goes into the jurisdiction of the court.
We have repeatedly held that relief on the ground of fraud will not be granted where the alleged fraud goes into the merits of the case, is intrinsic and not collateral, and has been controverted and decided. Thus, we have underscored the denial of relief where it appears that the fraud consisted in the presentation at the trial of a supposed forged document, or a false and perjured testimony, or in basing the judgment on a fraudulent compromise agreement, or in the alleged fraudulent acts or omissions of the counsel which prevented the petitioner from properly presenting the case.[33]
No actual and extrinsic fraud existed
in this case. In our jurisdiction, fraud is never presumed.[34] Mere allegations of fraud are not
enough. Intentional acts to deceive and
deprive another of his right, or in some manner, injure him must be
specifically alleged and proved.[35] The burden of proof rests on petitioner, and
the petitioner failed to discharge the burden.
Petitioner did not convincingly show that the Homestead Patent issued to
Charles is indeed spurious. More importantly, petitioner failed to prove that
respondent took part in the alleged fraud which dated back as early as 1966
when Charles supposedly secured the fake and spurious Homestead Patent.
In Estate
of the Late Jesus S. Yujuico v. Republic,[36]
citing Republic v. Court of Appeals,[37]
this Court stressed the fact that it was never proven that private respondent
St. Jude was a party to the fraud that led to the increase in the area of the
property after it was sub-divided. In
the same case, citing Republic v. Umali,[38]
we held that, in a reversion case, 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.
This conclusion rests very firmly on Section
32 of P.D. No. 1529, which states:
SECTION 32. Review of decree of registration; Innocent purchaser for value. — The decree of registration shall not be reopened or revised by reason of absence, minority, or other disability of any person adversely affected thereby, nor by any proceeding in any court for reversing judgment, subject, however, to the right of any person, including the government and the branches thereof, deprived of land or of any estate or interest therein by such adjudication or confirmation of title obtained by actual fraud, to file in the proper Court of First Instance a petition for reopening and review of the decree of registration not later than one year from and after the date of the entry of such decree of registration, but in no case shall such petition be entertained by the court where an innocent purchaser for value has acquired the land or an interest therein whose rights may be prejudiced. Whenever the phrase "innocent purchaser for value" or an equivalent phrase occurs in this Decree, it shall be deemed to include an innocent lessee, mortgagee, or other encumbrancer for value.
Upon the expiration of said period of one year, the decree of registration and the certificate of title issued shall become incontrovertible. Any person aggrieved by such decree of registration in any case may pursue his remedy by action for damages against the applicant or any other person responsible for the fraud. (Underscoring ours)
Settled is the rule that no valid TCT
can issue from a void TCT, unless an
innocent purchaser for value had intervened. An innocent purchaser for value is one who buys the property of
another, without notice that some other person has a right to or interest in
the property, for which a full and fair price is paid by the buyer at the time
of the purchase or before receipt of any notice of the claims or interest of
some other person in the property. The protection given to innocent purchasers
for value is necessary to uphold a certificate of title's efficacy and
conclusiveness, which the
Clearly, respondent is an innocent
purchaser in good faith and for value. Thus, as far as respondent is concerned,
TCT No. 18529, shown to it by JMC,
was free from any flaw or defect that could give rise to any iota of doubt that
it was fake and spurious, or that it was derived from a fake or spurious
Homestead Patent. Likewise, respondent was not under any obligation to make an
inquiry beyond the TCT itself when, significantly, a foreclosure sale was
conducted and respondent emerged as the highest bidder.
In Republic
v. Court of Appeals,[40]
this Court distinguished a Homestead Patent from a Free Patent, to wit:
Homestead Patent and Free Patent are some of the land patents granted by the government under the Public Land Act. While similar, they are not exactly the same. A Homestead Patent is one issued to: any citizen of this country; over the age of 18 years or the head of a family; who is not the owner of more than twenty-four (24) hectares of land in the Philippines or has not had the benefit of any gratuitous allotment of more than twenty-four (24) hectares of land since the occupation of the Philippines by the United States. The applicant must show that he has complied with the residence and cultivation requirements of the law; must have resided continuously for at least one year in the municipality where the land is situated; and must have cultivated at least one-fifth of the land applied for.
On the other hand, a
Free Patent may be issued where the applicant is a natural-born citizen of the
Philippines; not the owner of more than twelve (12) hectares of land; that he
has continuously occupied and cultivated, either by himself or through his
predecessors-in-interests, a tract or tracts of agricultural public lands
subject to disposition for at least 30 years prior to the effectivity of
Republic Act No. 6940; and that he has paid the real taxes thereon while the
same has not been occupied by any person.[41]
It bears stressing that a Homestead Patent, once registered
under the Land Registration Act, becomes as indefeasible as a Torrens Title.[42]
Verily, Section 103 of P.D. No. 1529
mandates the registration of patents, and such registration is the operative
act to convey the land to the patentee, thus:
Sec. 103. . . . . . The deed, grant, patent or instrument of conveyance from the Government to the grantee shall not take effect as a conveyance or bind the land but shall operate only as a contract between the Government and the grantee and as evidence of authority to the Register of Deeds to make registration. It is the act of registration that shall be the operative act to affect and convey the land, and in all cases under this Decree, registration shall be made in the office of the Register of Deeds of the province or city where the land lies. The fees for registration shall be paid by the grantee. After due registration and issuance of the certificate of title, such land shall be deemed to be registered land to all intents and purposes under this Decree. (Emphasis supplied)
The
The general rule that the direct result
of a previous void contract cannot be valid will not apply in this case as it
will directly contravene the
and the law
will, in no way, oblige him to go behind the certificate to determine the
condition of the property.[44]
Respondent's transfer certificate of
title, having been derived from the Homestead Patent which was registered under
the
WHEREFORE,
the instant Petition is DENIED and
the assailed Court of Appeals Decision is AFFIRMED.
No costs.
SO
ORDERED.
ANTONIO
EDUARDO B. NACHURA
Associate Justice
WE CONCUR:
CONSUELO YNARES-SANTIAGO
Associate
Justice
Chairperson
|
RENATO C. CORONA Associate
Justice |
MINITA V. CHICO-NAZARIO Associate
Justice |
PRESBITERO J.
VELASCO, JR.
Associate Justice
A T T E S T A T I O N
I attest that the conclusions in the above Decision were
reached in consultation before the case was assigned to the writer of the
opinion of the Court’s Division.
CONSUELO
YNARES-SANTIAGO
Associate
Justice
Chairperson,
Third Division
C E R T I F I C A T I O N
Pursuant to Section 13, Article VIII of the Constitution and
the Division Chairperson's Attestation, I certify that the conclusions in the
above Decision had been reached in consultation before the case was assigned to
the writer of the opinion of the Court’s Division.
REYNATO
S. PUNO
Chief Justice
* In lieu of Associate Justice Diosdado M. Peralta per raffle dated July 1, 2009.
[1] Rollo, pp. 8-19.
[2] Particularly
docketed as CA-G.R. CV No. 83169, penned by Associate Justice Eliezer R. de Los
Santos, with Associate Justices Fernanda Lampas Peralta and Myrna Dimaranan
Vidal, concurring; id. at 39-45.
[3] Particularly docketed as Civil Case No. R-1441-98 and penned by Judge Normelito J. Ballocanag; id. at 21-36.
[4] Records, pp. 8-9.
[5] Entitled: PROVIDING FOR AN ARMED FORCES RETIREMENT AND SEPARATION BENEFITS SYSTEM.
[6] Entitled: AMENDING PRESIDENTIAL DECREE NO. 361 RE THE ARMED FORCES RETIREMENT AND SEPARATION BENEFITS SYSTEM.
[7] Records, p. 17.
[8]
[9]
[10]
[11] TSN, July 12, 1999, pp. 6-7.
[12] Records, pp. 10-10A.
[13]
[14]
[15]
[16]
[17]
[18]
[19]
[20]
[21] TSN, November 19, 2003, p. 14.
[22] Records, p. 306.
[23]
[24] CA rollo, pp. 93-98.
[25]
[26] Rollo, pp. 101-116.
[27]
SECTION 122. Whenever public lands in the Philippine Islands belonging to the
Government of the
[28]
SECTION 103. Certificates of title
pursuant to patents. — Whenever public land is by the Government alienated,
granted or conveyed to any person, the same shall be brought forthwith under
the operation of this Decree. It shall be the duty of the official issuing the
instrument of alienation, grant, patent or conveyance in behalf of the
Government to cause such instrument to be filed with the Register of Deeds of
the province or city where the land lies, and to be there registered like other
deeds and conveyance, whereupon a certificate of title shall be entered as in
other cases of registered land, and an owner's duplicate issued to the grantee.
The deed, grant, patent or instrument of conveyance from the Government to the
grantee shall not take effect as a conveyance or bind the land, but shall
operate only as a contract between the Government and the grantee and as
evidence of authority to the Register of Deeds to make registration. It is the act of registration that
shall be the operative act to affect and convey the land, and in all cases
under this Decree, registration shall be made in the office of the Register of
Deeds of the province or city where the land lies. The fees for registration
shall be paid by the grantee. After due registration and issuance of the
certificate of title, such land shall be deemed to be registered land to all
intents and purposes under this Decree.
[29] Rollo, pp.156-170.
[30] Supra note 1 at 13.
[31] Tan v. Court of Appeals, 421 Phil. 134, 141 (2001).
[32] G.R.
No. 133168, March 28, 2006, 485 SCRA 424.
[33]
[34] Asia’s Emerging Dragon Corporation v. Department of Transportation and Communication, G.R. Nos. 169914 and 174166, April 18, 2008, 552 SCRA 59, 111.
[35] Barrera v. Court of Appeals, 423 Phil. 559, 566 (2001).
[36] G.R.
No. 168661, October 26, 2007, 537 SCRA 513, 530-531.
[37] Republic
of the
[38] G.R.
No. 80687, April 10, 1989, 171 SCRA 647, 653.
[39] Eastworld Motor Industries Corporation v.
Skunac Corporation, G.R. No. 163994, December 16, 2005, 478 SCRA 420,
427-428. (Citations omitted)
[40] 406 Phil. 597 (2001).
[41]
[42] Portes, Sr. v. Arcala, G.R. No. 145264, August 30, 2005, 468 SCRA 343, 353,
citing Republic of the Phil. v. CA, 3 46 Phil. 637 (1997).
[43] Republic v. Guerrero; supra note 32 at 445.
[44] Republic v. Orfinada, Sr., G.R. No. 141145, November 12, 2004, 442 SCRA 342,
359, citing Heirs of Spouses Benito Gavino and Juana Euste v. Court of Appeals,
291 SCRA 495, 509 (1998).