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FRANCISCO ALONSO (DECEASED), SUBSTITUTED
BYMERCEDES V ALONSO, TOMAS V. ALONSOAND
ASUNCION V. ALONSO,
                               Petitioners,

G.R. No. 130876
December 5, 2003

-versus-

CEBU COUNTRY CLUB, INC.,
           Respondent.
 
 

SANDOVAL-GUTIERREZ, J.:chanroblesvirtuallawlibrary

Before Us are two separate Motions for Reconsideration of the majority decision dated January 31, 2002 declaring that Lot 727 D-2 of the Banilad Friar Lands Estate in Cebu City "legally belongs to the Government of the Philippines."chanrobles virtuallaw libraryred

Both the petitioners and the private respondent assail the Decision insofar as it declares a non-party (the Government) the owner of the disputed property. They contend this is a violation of due process. The petitioners point out that "the Government, through the Solicitor General, did not come in as a party entitled to the avails of the suit but as a seeming friend of the court to help resolve only the legality of a reconstituted title."[1]chanrobles virtuallaw libraryred

Petitioners invoke various other grounds for reversal of the majority Decision. But the most telling are the following: first, the Decision deviated from established doctrine and made findings of fact not supported by evidence and are contrary to the findings of fact by the Court of Appeals; second, there is an imperative need to reconcile two contradictory doctrines represented by Dela Torre vs. Court of Appeals,[2] on the one hand, and Solid State Multi-Products Corp. vs. CA,[3] on the other, in order to resolve the substantive merits of this controversy; third, the core issues of fraud and want of jurisdiction afflicting the reconstitution of Cebu Country Club's title were not squarely passed upon in the ponencia; and fourth, the issues of prescription and laches as discussed in Justice Jose A.R. Melo's Dissent deserve a second hard look.chanrobles virtuallaw libraryred

Petitioners' motion for reconsideration is meritorious.
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On the issue of due process, there is no question that from inception, the instant action for nullity of a reconstituted title has been between two parties only: Francisco Alonso and Cebu Country Club, Inc. The Solicitor General entered his appearance only by virtue of our Resolution dated November 22, 1999 asking him to comment on the validity of the reconstituted title. We did not direct him to intervene on behalf of the Government as claimant of the property.
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By due process of law is meant "a law which hears before it condemns, which proceeds upon inquiry, and renders judgment only after trial."[4] Basically, it contemplates notice and opportunity to be heard before judgment is rendered affecting one's person or property. The majority Decision actually awarded to the Government ownership of the disputed property, without notice to both parties and without giving them an opportunity to be heard and submit their opposition.
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Next, petitioners assert that in nullifying the 1911 sale to Tomas Alonso, the majority did not only deviate from a doctrine of long standing first announced in Bacalzo vs. Pacada,[5] but also made findings unsupported by the evidence and are contrary to the findings of fact by the Court of Appeals.
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The doctrine that has developed concerning the acquisition of ownership over friar lands is that even without a final deed of sale or conveyance being executed by the government, the buyer acquires full ownership of the land upon completing his payment of the agreed price.[5] It is the completion of such payment, not the execution of the final deed of sale, that vests full ownership in the buyer. In fact, the buyer has been consistently held to have become the beneficial owner of the land as early as the execution of the certificate of sale and his payment of the first installment on the price.[7] In De la Torre vs. Court of Appeals,[8] we even held that the certificate of sale "is a conveyance of the ownership of the property, subject only to the resolutory condition that the sale may be cancelled if the price agreed upon is not paid in full. "[9] Indeed, the contrary rule first announced in Solid State Multi-Products Corp. vs. Court of Appeals[10] and reiterated in Liao vs. Court of Appeals,[11] is not controlling. Aside from being an obiter, the rule enunciated in said cases that the sale of friar land is void if the final deed of conveyance does not bear the approval of the Secretary of Agriculture, is inconsistent with the long-settled doctrine of Bacalzo and Dela Torre that notwithstanding the failure of the government to issue the proper instrument of conveyance in favor of the buyer, still the latter acquires ownership over the subject friar land upon full payment of the price.chanrobles virtuallaw libraryred

In Tomas Alonso's case, his payment of the agreed price was completed on March 19, 1919, per the handwritten entries on the Friar Lands Sale Certificate Register No. 734, marked as Exhibit "A". On that date, he legally acquired full ownership of Lot 727 D-2. Therefore, the nullification of the sale to Tomas Alonso on the ground that the deed of final conveyance did not bear the approval of the Secretary of Agriculture clearly deviates from established doctrine of long standing.chanrobles virtuallaw libraryred

It bears emphasis that Tomas Alonso's purchase of the property was invalidated solely on the basis of certified copies of Sale Certificate No. 734 in favor of Leoncio Alburo and Assignment of Sale Certificate No. 734 in favor of Tomas Alonso. These two documents on file with CENRO-Cebu were attached to the Solicitor General's Memorandum filed on May 25, 2001 - a fact expressly stated in the majority Decision. They were not submitted as evidence by the parties during the trial and are overcome by the Friar Lands Sale Certificate Register No. 734 (Exhibit "A"). The entries in this exhibit showing the existence of both the patent and the deed of final conveyance, belie the factual finding in question. Consequently, such erroneous finding unsubstantiated by any evidence cannot be the basis for invalidating the sale of Lot 727 to Tomas Alonso.chanrobles virtuallaw libraryred

Similarly, the factual finding in the majority Decision that the final deed of conveyance was not approved by the Secretary of Agriculture as required by law, because the archive copy thereof does not bear such approval, is contradicted by the factual finding of the Court of Appeals. It held that since the document, Exhibit "C", is a mere archive copy, not the original, "the Secretary's signature cannot be expected to appear thereon" and that the absence of the signature from the archive copy "does not necessarily mean the absence of the Secretary's approval as would invalidate the sale of Lot 727 to Tomas Alonso."[12] The rule that the factual findings of the Court of Appeals are binding on this Court[13] should have been applied by the majority since none of the exceptions to said rule[14] has been shown.chanrobles virtuallaw libraryred

Tomas Alonso's ownership and possession lasted from the 1910's to the late 1930's. But no Transfer Certificate of Title appears to have been issued in his name. The majority Decision held that the final deed of sale "was not registered with the Registry of Deeds because of lack of technical requirements, among them, the approval of the deed of sale by the Secretary of Agriculture and Natural Resources, as required by law.[15] This finding, however, is contradicted by the express finding of the Court of Appeals that the said document "was submitted for registration, but for reasons undisclosed by the records, he was not issued a TCT."[16] This factual finding of the Appellate Court should prevail, there being no mention in the majority Decision of the presence of any of the circumstances warranting a review of the evidence.[17]chanrobles virtuallaw libraryred

We now come to the issue of whether the reconstituted title in the name of the private respondent is valid. The majority Decision stated that the reconstitution of private respondent's title "was based on the owner's duplicate of title." This statement leaves much to be desired. The Court of Appeals finding that there is no record of the existence of either TCT No. 11351 or TCT No. 1021 covering Lot 727[18] binds us, as held in numerous decisions.[19] Besides, as pointed out by petitioners, the absence of a technical description on the face of the reconstituted title is, by and in itself, incontrovertible proof that the reconstitution was not based on a genuine owner's duplicate. Indeed, if it were genuine, the owner's duplicate of the Certificate of Title that was used as source document in the administrative reconstitution would have contained a full technical description of Lot 727 D-2. And this would have found its way to the reconstituted title which merely mirrors its source document.[20]chanrobles virtuallaw libraryred

It is not safe to conclude, as the majority does, that the core issues of fraud and lack of jurisdiction afflicting the reconstituted title have been "squarely resolved" or that each ground raised by petitioners in assailing the reconstituted title has been "answered."chanrobles virtuallaw libraryred

On the issue of fraud, the majority Decision considered what petitioners correctly described as "minor badges of fraud", but conspicuously left out the weightier or major ones, such as: first, the illegal act of the Register of Deeds, memorialized by Exhibit "F", returning to the private respondent the source documents supposedly used in the reconstitution of several titles in its name, instead of keeping them on file as part of the official record of such reconstitution; second, the conspicuous absence of a technical description of the property in the reconstituted title, giving rise to the presumption that the source document used, which the law requires to be an owner's (or mortgagee's, lessee's, or co-owner's) duplicate certificate of title and not any other, was a bogus or spurious certificate of title for otherwise, such technical description would have been there; third, while the certification in the reconstituted title reads: "This Original Certificate of Title has on this 26th day of July 1948 been administratively reconstituted, x  x  x" however, what emerged was a Transfer Certificate of Title. This patent discrepancy should not to be dismissed lightly. There are other major "badges of fraud" listed in petitioners' Memorandum dated April 18, 2001, but not one was squarely resolved. Such treatment of the issue of fraud hardly does justice to petitioners' cause.chanrobles virtuallaw libraryred

In any case, the issue of want of jurisdiction which Justice Melo discussed incisively in his Dissent but the majority Decision failed to address, should carry the day for petitioners' cause. I adopt the following paragraphs from his Dissent:chanrobles virtuallaw libraryred
 

"As regards the issue of nullity due to want of jurisdiction, it is essential to note the difference in law between judicial and administrative reconstitution under Republic Act No. 26. The authority granted by said law to the Register of Deeds to make an administrative reconstitution of a lost or destroyed transfer certificate of title is limited by Sec. 5 to only two kinds of source documents: (a) the owner's duplicate of the certificate of title and (b) the co-owner's mortgagee's, or lessee's duplicate of the certificate of title.chanrobles virtuallaw libraryred

"These two kinds are mentioned in pars. (a) and (b) of Sec. 3, Rep. Act No. 26. On the other hand, the power of a court to effect a judicial reconstitution of a lost or destroyed transfer certificate of title encompasses all the six (6) kinds of source documents enumerated by Sec. 3.chanrobles virtuallaw libraryred

"The owner's duplicate of the certificate of title, if authentic, cannot be without a technical description of the covered lot in view of the provisions of Secs. 40, 41, and 42 of Act No. 496. The clear mandate of these provisions is that the technical description of the land as determined by the land registration court shall be inscribed upon the decree of registration which, in turn, shall be transcribed upon the original certificate of title and, in the event of a transfer, upon the transfer certificate of title. To make a sweeping pronouncement that the lack of a technical description in a reconstituted title is not a bar to reconstitution of the title is to be imprecise. It may be correct in the case of a judicial, but wrong in the case of an administrative reconstitution of a lost or destroyed transfer certificate of title.
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"I am, therefore, convinced that the absence of the technical description from the face of the reconstituted title, TCT No. RT-1310(T-11351), unmistakably establishes the spuriousness of the 'missing' source document used in its administrative reconstitution x      x      x"chanrobles virtuallaw libraryred

The authority of the Register of Deeds to administratively reconstitute a lost or destroyed title is expressly limited by Section 5 of Rep. Act No. 26 to the documents falling under Section 3 (a and b) — namely, either an owner's duplicate certificate of title or a mortgagee's, lessee's, or co-owner's duplicate certificate of title. Where the source document used is not any of these, it follows that the Register of Deeds has no authority to proceed with the administrative reconstitution of title. Obviously, a TCT purporting to have been issued in 1931, but having no technical description of the covered property as late as 1948, is spurious. It certainly does not qualify as a source document in an administrative reconstitution by the Register of Deeds. In fact, it cannot qualify even in a judicial reconstitution. Since the Register of Deeds has no jurisdiction to undertake the administrative reconstitution because the source document used did not fall under paragraphs (a) and (b), Section 3, of R.A. No. 26, respondent's title is a nullity.chanrobles virtuallaw libraryred

Finally, petitioners' right of action is barred neither by prescription nor by laches. This action seeks a declaration of nullity of private respondent's reconstituted title on the ground, among others, of lack of jurisdiction. Such action does not prescribe.[21] As for laches, we must not lose sight of the basic postulate that it is a doctrine of equity which should never be used as a shield for fraud or wrongdoing by the very party responsible therefor.[22] The private respondent, operating under its previous name, was an active participant in the wrongful use and subsequent disappearance of the source document used in the reconstitution. Under such circumstances, private respondent cannot invoke laches to defeat petitioners' right to assail the validity of the reconstituted title because laches cannot be applied when manifest wrong or injustice will result.[23]chanrobles virtuallaw libraryred

In any event, not all the essential elements of laches are present. In Vergara vs. Vergara,[24] we held that the second element of laches — namely, "delay in asserting plaintiff's rights, he having had knowledge or notice of the defendant's conduct and having been afforded an opportunity to institute a suit" — is absent where the plaintiff has no knowledge of the doing of the act complained of; hence, the delay in asserting such right, occasioned by such lack of knowledge, cannot give rise to the defense of laches. As pointed out by Justice Melo in his Dissent, this element is not present in the case at bar, because:
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"x      x      x  Neither Tomas Alonso nor his son, petitioner Francisco Alonso, knew about the fraudulent reconstitution of title effected by Cebu Country Club. Moreover, the requirement that plaintiff must have been afforded an opportunity to file a suit, has not been met. It is clear from the record that the opportunity to file suit arose only upon the discovery of the official documents that unequivocally established the fact that Lot 727 had indeed been fully acquired by Tomas Alonso, and such discovery was what triggered the filing of the present suit. Before the documents were discovered the Alonsos were literally petrified by the dearth of evidence from filing suit. Their predicament of utter helplessness negates the applicability of laches. In the balancing of interest, we should go slow in punishing the victim of a fraud instead of penalizing the culprit, no matter how long the time lapse may have lasted.[25]chanrobles virtuallaw libraryred

WHEREFORE, I vote (a) to grant petitioners' motion for reconsideration dated March 6, 2002; (b) to declare null and void TCT No. 1310 (T-11351) in the name of respondent Cebu Country Club, Inc., and order its cancellation; (c) to declare the petitioners as the lawful owners of Lot 727 of the Banilad Friar Lands Estate in Cebu City; and (d) to order the Register of Deeds of Cebu City to issue the corresponding new Certificate of Title in their names.chanrobles virtuallaw libraryred
 

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SEPARATE OPINION

Endnotes:

SANDOVAL-GUTIERREZ, J.:

[1] Petitioners' motion for reconsideration at 3.chanrobles virtuallaw libraryred
[2] G.R. No. 113095, February 8, 2000, 325 SCRA 11.chanrobles virtuallaw libraryred
[3] G.R. No. 83383, May 6, 1991, 196 SCRA 630.chanrobles virtuallaw libraryred
[4] Macabingkil vs. Yatco, G.R. No. L-23174, September 18, 1967, 21 SCRA 150; Lopez vs. Director of Lands, 47 Phil, 23, 32 (1924).
[5] 107 Phil, 520 (1960).chanrobles virtuallaw libraryred
[6] Bacalzo vs. Pacada, supra; Dela Torre vs. Court of Appeals, supra.chanrobles virtuallaw libraryred
[7] Republic vs. Heirs of Felix Caballero, G.R. No. L-27473, September 30, 1977, 79 SCRA 177; Fabian vs. Fabian, G.R. No. L-20449, January 29, 1968, 22 SCRA 231; Alvarez vs. Espiritu, G.R. No. L-18833, August 14, 1965, 14 SCRA 892; Director of Lands vs. Rizal, 87 Phil. 806 (1950).chan [8] Supra.chanrobles virtuallaw libraryred
[9] Id. at 16; see also Pugeda vs. Trias, G.R. No. L-16925, March 31, 1962, 4 SCRA 849; Jovellanos VS, Court of Appeals, G.R. No. 100728, June 6, 18, 1992, 210 SCRA 126.
[10] Supra.chanrobles virtuallaw libraryred
[11] G.R. Nos. 102961-62, January 27, 2000, 323 SCRA 430.chanrobles virtuallaw libraryred
[12] Court of Appeals Decision at 10.chanrobles virtuallaw libraryred
[13] Universal Motors vs. Court of Appeals, G.R. No. 47432, January 27, 1992, 205 SCRA 448; Arroyo, Jr. vs. Court of Appeals, G.R. No. 96602, November 19, 1991, 203 SCRA 750; Guiang vs. Samano, G.R. No. 50501, April 22, 1991, 196 SCRA 114; Bustamante vs. Court of Appeals, G.R. No. 89880, February 6, 1991, 193 SCRA 603; FNCB Finance vs. Estavillo, G.R. No. 93394, December 20, 1990, 192 SCRA 514; Ching Siu Yong vs. Intermediate Appellate Court, G.R. No. 64398, November 6, 1990, 191 SCRA 187.chanrobles virtuallaw libraryred
[14] Orcino vs. Civil Service Commission, G.R. No. 92869, November 18, 1990, 190 SCRA 815; Robleza vs. Court of Appeals, G.R. No. 80364, June 28, 1989, 174 SCRA 354; Remalante vs. Tibe, G.R. No. L-59514, February 25, 1988, 158 SCRA 138; Sacay vs. Sandiganbayan, G.R. Nos. L-66497-98, July 10, 1986, 142 SCRA 594.chanrobles virtuallaw libraryred
[15] See Majority Decision at 3.chanrobles virtuallaw libraryred
[16] See Court of Appeals Decision at 11.chanrobles virtuallaw libraryred
[17] Litonjua vs. Court of Appeals, G.R. No. 120294, February 10, 1998, 286 SCRA 136; Robleza vs. Court of Appeals, supra; and Remalante vs. Tibe, supra.
[18] CA Decision at 17.chanrobles virtuallaw libraryred
[19] Universal Motors vs. Court of Appeals, supra; Arroyo, Jr. vs. Court of Appeals, supra; Guiang vs. Samano, supra; Bustamante vs. Court of Appeals, supra; FNCB Finance vs. Estavillo, supra; and Ching Siu Yong vs. Intermediate Appellate Court, supra.chanrobles virtuallaw libraryred
[20] Anciano vs. Caballes, 93 Phil. 875, 876 (1953), where it was ruled that "reconstitution of a certificate of title x  x  x denotes restoration of the instrument which is supposed to have been lost or destroyed in its original form and condition".chanrobles virtuallaw libraryred
[21] Ferrer vs. Bautista, G.R. No. 46963, March 14, 1994, 231 SCRA 257; Agne vs. Director of Lands, G.R. Nos. 40399 & 72255, February 6, 1990, 181 SCRA 793.
[22] Rañeses vs. Intermediate Appellate Court, G.R. No. 68747, July 13, 1990, 187 SCRA 397.chanrobles virtuallaw libraryred
[23] Santiago vs. Court of Appeals, G.R. No. 103959, August 21, 1997, 278 SCRA 98.chanrobles virtuallaw libraryred
[24] G.R. No. L-17524, May 18, 1962, 5 SCRA 53.chanrobles virtuallaw libraryred
[25] 375 SCRA 390, 422-423 (2002).chanrobles virtuallaw libraryred