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EN BANC

G. R. No. 130876. January 31, 2002

FRANCISCO M. ALONSO, substituted by his heirs, petitioners, vs. CEBU COUNTRY CLUB, INC., respondent.

PARDO, J.:

The Case

The case is an appeal via certiorari from a decision of the Court of Appeals¹ affirming in toto that of the Regional Trial Court, Branch 8, Cebu City,² declaring that the title to the contested Lot No. 727, Banilad Friar Lands Estate, Cebu City, was validly re-constituted in the name of the Cebu Country Club, Inc. and ordering petitioners to pay attorneys fees of P400,000.00, and litigation expenses of P51,000.00, and costs.

In an appeal via certiorari, petitioners may raise only questions of law, which shall be distinctly set forth.³ The jurisdiction of the Supreme Court in cases brought before it from the Court of Appeals is limited to the review of errors of law and not to analyze or weigh the evidence all over again, as its findings of facts are deemed final and conclusive.⁴cräläwvirtualibräry

In this appeal, petitioners raise five (5) issues, all of which involve questions of fact that have been resolved by the trial court and the Court of Appeals in favor of the Cebu Country Club, Inc.

The Facts

The facts, as found by the Court of Appeals, are as follows:

(1) Petitioner Francisco M. Alonso, who died pendente lite and substituted by his legal heirs, a lawyer by profession, the only son and sole heir of the late Tomas N. Alonso and Asuncion Medalle, who died on June 16, 1962 and August 18, 1963, respectively (Exhibits P and P-1). Cebu Country Club, Inc. is a non-stock, non-profit corporation duly organized and existing under Philippine Laws the purpose of which is to cater to the recreation and leisure of its members.

(2) Sometime in 1992, petitioner discovered documents and records Friar Lands Sale Certificate Register/Installment Record Certificate No. 734, Sales Certificate No. 734 and Assignment of Sales Certificate (Exhs. A, J and K) showing that his father acquired Lot No. 727 of the Banilad Friar Lands Estate from the Government of the Philippine Islands in or about the year 1911 in accordance with the Friar Lands Act (Act No. 1120). The documents show that one Leoncio Alburo, the original vendee of Lot No. 727, assigned his sales certificate to petitioners father on December 18, 1911, who completed the required installment payments thereon under Act No. 1120 and was consequently issued Patent No. 14353 on March 24, 1926. On March 27, 1926, the Director of Lands, acting for and in behalf of the government, executed a final deed of sale in favor of petitioners father Tomas N. Alonso (Exh. C). It appears, however, that the deed was not registered with the Register 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.

(3) Upon investigation of the status of the land, petitioner found out from the office of the Registrar of Deeds of Cebu City that title to Lot No. 727 of the Banilad Friar Lands Estate had been administratively reconstituted from the owners duplicate on July 26, 1948 under Transfer Certificate of Title (TCT) No. RT-1310 (T-11351) in the name of United Service Country Club, Inc., predecessor of Cebu Country Club, Inc. On March 8, 1960, upon order of the Court of First Instance, the name of the registered owner in TCT No. RT-1310 (T-11531) was changed to Cebu Country Club, Inc. Moreover, the TCT provides that the reconstituted title was a transfer from TCT No. 1021 (Exh. D and sub-markings).

(4) At present, TCT No. RT-1310 (T-11351) has been partially cancelled when Lot No. 727 was subdivided in accordance with the Memorandum of Agreement entered into by Cebu Country Club, Inc. and Susana Ingles Marquiso and Simeon Ingles, Jr. by virtue of the ruling of the Court of Appeals in the case of Heirs of Ramon Cabrera and Graciano Ingles v. Cebu Country Club, Inc.⁵ and affirmed by the Supreme Court in G. R. No. 60392, per resolution dated August 29, 1983. Lot 727-D-2 covered by TCT No. 94905 remains registered in the name of Cebu Country Club, Inc. (Exh. D-2).

(5) In the firm belief that petitioners father is still the rightful owner of Lot No. 727 of the Banilad Friar Lands Estate since there are no records showing that he ever sold or conveyed the disputed property to anyone, on July 7, 1992, petitioner made a formal demand upon Cebu Country Club, Inc. to restore to him the ownership and possession of said lot within fifteen (15) days from receipt thereof. He indicated that his claim was analogous to that of the heirs of the late Ramon Cabrera and Graciano Ingles which was upheld by the Court of Appeals (Exh. H). Cebu Country Club, Inc., however, denied petitioners claim and refused to deliver possession to him.

(6) Left with no other recourse, on September 25, 1992, petitioner filed with the Regional Trial Court, Cebu City,⁶ a complaint for declaration of nullity and non existence of deed/title, cancellation of certificates of title and recovery of property against defendant Cebu Country Club, Inc.⁷ He alleged that the Cebu Country Club, Inc. fraudulently and illegally managed to secure in its name the administrative reconstitution of TCT No. RT-13 10 (T-11351) despite the absence of any transaction of specific land dealing that would show how Lot No. 727 had come to pass to Cebu Country Club, Inc.; that TCT No. 11351 which is the source title of TCT No. RT-1310 (T-11351) does not pertain to Lot No. 727; that the reconstituted title which was issued on July 26, 1948, did not contain the technical description of the registered land which was inserted only on March 8, 1960, twenty-eight (28) years after the issuance of TCT No. RT-1310 (T-11351), hence, Cebu Country Club, Inc.s title is null and void. Petitioner thus prayed for the cancellation of TCT No. RT-1310 (T-11351) and the issuance of another title in his name as the sole heir of Tomas Alonso, for Cebu Country Club, Inc. to deliver possession of the property to petitioner, and render an accounting of the fruits and income of the land. Petitioner likewise prayed for the sum of P100,000.00 by way of attorneys fees plus P500.00 per hearing as appearance fee, and P10,000.00 as reasonable litigation expenses.

(7) On November 5, 1992, Cebu Country Club, Inc. filed with the trial court its answer with counterclaim. It alleged that petitioner had no cause of action against Cebu Country Club, Inc. since the same had prescribed and was barred by laches, Cebu Country Club, Inc. having been in possession of the land since 1935 until the present in the concept of an owner, openly, publicly, peacefully, exclusively, adversely, continuously, paying regularly the real estate taxes thereon; that Cebu Country Club, Inc. acquired the lot in good faith and for value; that it caused the administrative reconstitution of Lot No. 727 in 1948 from the owners duplicate, the original of TCT No. 11351 having been lost or destroyed during the war, pursuant to Republic Act No. 26, its implementing Circular, GLRO Circular No. 17⁸ and Circular No. 6 of the General Land Registration Office;⁹ that unlike Cebu Country Club, Inc., petitioners father never had any registered title under the Land Registration Act No. 496 nor did he pay the necessary taxes on Lot No. 727 during his lifetime; that petitioners father knew that the United Service Country Club, Inc., predecessor of Cebu Country Club, Inc. was occupying Lot No. 727 as owner; that petitioners father never reconstituted his alleged title to Lot No. 727 but did so over Lot No. 810 of the Banilad Friar Lands Estate, a lot adjacent to the disputed property, in 1946; that petitioner himself lived in Cebu City, a few kilometers away from the land in litigation; that petitioners father or petitioner himself, both of whom are lawyers and the former a congressman as well, for more than sixty (60) years, never made any demand on Cebu Country Club, Inc. for the recovery of the property knowing fully well that said land was owned and utilized by Cebu Country Club, Inc. as its main golf course. By way of counterclaim, Cebu Country Club, Inc. prayed for the award of attorneys fees in the amount of P900,000.00 and litigation expenses of P100,000.00, moral damages of P500,000.00 and exemplary damages of P2,000,000.00.¹⁰cräläwvirtualibräry

(8) In the course of the trial, Cebu Country Club, Inc. to disprove petitioners allegation that its title, TCT No. RT-1310 (T-11351), was obtained illegally and fraudulently, submitted the deposition of an expert witness, Atty. Benjamin Bustos, Chief of the Reconstitution Division, Land Registration Authority, Central Office, Metro Manila (Exh. 8). He testified that pursuant to GLRO Circular No. 17 dated February 19, 1947 and Circular No. 6 (RD-3) dated August 5, 1946 (Exhs 2 and 3), titles issued before the inauguration of the Republic of the Philippines were numbered consecutively, and titles issued after the inauguration of the Republic were likewise numbered consecutively, starting with the number one (1). Eventually, therefore, the title numbers issued before the inauguration would be duplicated by the title numbers issued after the inauguration of the Republic.¹¹cräläwvirtualibräry

(9) On May 7, 1993, the trial court rendered a decision, the dispositive portion of which reads:

THE FOREGOING CONSIDERED, judgment is hereby rendered in favor of the defendant and against the plaintiff: declaring the contested property or Lot 727 as legally belonging to the defendant; directing the plaintiff to pay attorney' fee of P400,000.00; and litigation expenses of P51,000.00; and finally, with costs against the plaintiff.

SO ORDERED.

Cebu City, May 7, 1993.

(s/t) BERNARDO LL. SALAS

Judge¹²cräläwvirtualibräry

(10) In due time, both parties appealed to the Court of Appeals.¹³cräläwvirtualibräry

After proceedings on appeal, on March 31, 1997, the Court of Appeals promulgated a decision, the dispositive portion of which reads:

WHEREFORE, IN VIEW OF THE FOREGOING, the appeals interposed by both parties are hereby DENIED, and the lower courts Decision dated May 7, 1993 is AFFIRMED in toto. No pronouncement as to costs.

SO ORDERED.¹⁴cräläwvirtualibräry

On April 30, 1997, petitioner filed a motion for reconsideration; however, on October 2, 1997, the Court of Appeals denied the motion.¹⁵cräläwvirtualibräry

Hence, this appeal.¹⁶cräläwvirtualibräry

On October 24, 2000, we required the Solicitor General to file comment on the issue of the validity of the re-constituted title in dispute.¹⁷cräläwvirtualibräry

On November 8, 2000, the Solicitor General submitted a comment stating that on the basis of information received from the Land Registration Authority (LRA) and the Land Management Bureau (LMB), the Cebu Country Club, Inc. had been occupying the disputed property even before the Second World War and developed it into a golf course and must have acquired the property in a proper and valid manner.¹⁸ Nonetheless, the Solicitor General emphasized that the Cebu Country Clubs certificate of title is a reconstituted title. A reconstituted title does not confirm or adjudicate ownership of land covered by lost or destroyed title.¹⁹ And the Governments right to file reversion proceedings cannot be barred by prescription that does not run against the State.²⁰

The Issues

Petitioners raise the following issues:

1. Whether the Court of Appeals erred in affirming the validity of TCT No. RT-1310 (T-11351).

2. Whether the Court of Appeals erred in sustaining respondents claim of ownership over Lot No. 727;

3. Whether the Court of Appeals erred in holding that the present action is barred by prescription and/or by laches;

4. Whether the Court of Appeals erred in not applying the doctrine of stare decisis;

5. Whether the Court of Appeals erred in sustaining the trial courts award for damages in the form of attorneys fees and litigation expenses.²¹cräläwvirtualibräry

We resolve the issues in seriatim.

First Issue: Validity of Cebu Country Club, Inc.s Title

The first issue is whether the Court of Appeals lawfully adjudged the validity of the administrative reconstitution of the title of Cebu Country Club, Inc. over the OCT of the Government of the Philippine Islands and Sales Patent No. 14353 on Lot No. 727 in the name of Tomas N. Alonso.

The issue is factual, which, as aforesaid, cannot be reviewed in this appeal. Nevertheless, petitioners assail the validity of the administrative reconstitution of Cebu Country Club, Inc.s title No. RT-1310 (T-11351) on three (3) grounds:

1. Its source title bears the same number as another title which refers to another parcel of land;

2. There is no recorded transaction of the land from Tomas Alonso in favor of Cebu Country Club, Inc.; and

3. The technical description was not transcribed in the title within two (2) years from the date of its reconstitution.

None of the grounds has any basis or merit.

On the question that TCT No. RT-1310 (T-11351) bears the same number as another title to another land, we agree with the Court of Appeals that there is nothing fraudulent with the fact that Cebu Country Club, Inc.s reconstituted title bears the same number as the title of another parcel of land. This came about because under General Land Registration Office (GLRO) Circular No. 17, dated February 19, 1947, and Republic Act No. 26 and Circular No. 6, RD 3, dated August 5, 1946, which were in force at the time the title was reconstituted on July 26, 1948, the titles issued before the inauguration of the Philippine Republic were numbered consecutively and the titles issued after the inauguration were numbered also consecutively starting with No. 1, so that eventually, the titles issued before the inauguration were duplicated by titles issued after the inauguration of the Philippine Republic. This was testified to by Atty. Benjamin Bustos, Chief of the Reconstitution Division, Land Registration Authority, Central Office, Metro Manila, and by Atty. Dindo Nuez, Deputy Register of Deeds of Cebu City, who declared that several titles in the record of the Register of Deeds which were reconstituted after the inauguration of the Philippine Republic had the same numbers as the titles issued before the Second World War, due to the operation of the circulars referred to.

Said the Court of Appeals:

As a third argument, plaintiff avers that the lower court erred in declaring defendant as the owner of Lot 727 when it has a void title because it was fraudulently acquired. Specifically, plaintiff points out that on the face of defendants administratively reconstituted title- TCT No. RT-1310 (T-11351), it would appear that its source title is TCT No. 11351. Going over the said title further, it can be gleaned that the parent title of TCT No. 11351 is TCT No. 1021. However, plaintiff claims that defendant failed to present said source titles. It appears likewise that the Register of Deeds of Cebu City does not have a copy thereof.

On the other hand, plaintiff presented TCT No. 11351 issued on June 18, 1954 in the name of Pacita Raffinan covering Lot 925 of the Cadastral Survey of Cebu with an area of 310 square meters, more or less, (Exh. L) and TCT No. 1021 issued on July 12, 1947 in the name of Rosario Rubio covering Lot No. 51-D of the subdivision plan being a portion of Lot No. 576 of the Banilad Friar lands Estate with an area of 230 sq. m., more or less (Exh. E). In his motion for new trial, he likewise presented as one of his newly discovered evidence a copy of TCT No. RT-1325 (T-1021) (Annex B, Motion for New Trial, p. 60, Rollo) whose source title was presumably TCT No. 1021, which apparently is the parent title of defendants TCT. Said TCT No. RT-1325 (T-1021) was administratively reconstituted on July 27, 1948 and covers Lot No. 1314 of the Cadastral Survey of Cebu with an area of 110 sq. m., more or less, and registered in the name of Spouses Andres Borres and Emiliana Enriquez. As stated in TCT No. RT-1325 (T-1021), its parent title, TCT No. 1021, was entered in the record book on May 17, 1939.

Plaintiff concludes then that considering that TCT Nos. 11351 and 1021 as well as RT-1325 (T-1021), which were purportedly the parent titles of TCT No. RT-1310 (T-11351), do not cover Lot. 727, defendants TCT was void having been obtained from a spurious or non-existent source (Citing the case of Ramon Cabrera, et. al., vs. Cebu Country Club, Inc. CA-G.R. No. 65559-R, Exh. F).

That there seems to be no record on file of the existence of either TCT No. 11351 or 1021 covering Lot 727 of the Banilad Friar Lands Estate containing an area of 377,622 sq. m., does not invalidate defendants title. As defendant counters, which was corroborated by Atty. Dindo Nuez, Deputy Register of Deeds for Cebu City, copies of these titles were lost and could not be found despite diligent search thereof.

Moreover, the absence of said titles and the existence of TCT Nos. 11351 and 1021, which do not cover Lot 727, do not render TCT No. RT-1310 (T-11351) invalid in the light of Circular No. 6 Exh. 3) re: numbering of certificates of title, entries in the day book and registration books, and GLRO Circular No. 17 (Exh. 2) the rules and regulations governing the reconstitution of lost or destroyed certificates of title.²²cräläwvirtualibräry

Petitioners next argue that the reconstituted title of Cebu Country Club, Inc. had no lawful source to speak of; it was reconstituted through extrinsic and intrinsic fraud in the absence of a deed of conveyance in its favor. In truth, however, reconstitution was based on the owners duplicate of the title, hence, there was no need for the covering deed of sale or other modes of conveyance. Cebu Country Club, Inc. was admittedly in possession of the land since long before the Second World War, or since 1931. In fact, the original title (TCT No. 11351) was issued to the United Service Country Club, Inc. on November 19, 1931 as a transfer from Transfer Certificate of Title No. 1021 (Exh. D-6). More importantly, Cebu Country Club, Inc. paid the realty taxes on the land even before the war, and tax declarations covering the property showed the number of the TCT of the land. Cebu Country Club, Inc. produced receipts showing real estate tax payments since 1949 (Exhs. 27 to 100-B). On the other hand, petitioner failed to produce a single receipt of real estate tax payment ever made by his father since the sales patent was issued to his father on March 24, 1926. Worse, admittedly petitioner could not show any torrens title ever issued to Tomas N. Alonso, because, as said, the deed of sale executed on March 27, 1926 by the Director of Lands was not approved by the Secretary of Agriculture and Natural Resources and could not be registered. Under the law, it is the act of registration of the deed of conveyance that serves as the operative act to convey the land registered under the Torrens system. The act of registration creates constructive notice to the whole world of the fact of such conveyance.²³ On this point, petitioner alleges that Cebu Country Club, Inc. obtained its title by fraud in connivance with personnel of the Register of Deeds in 1941 or in 1948, when the title was administratively reconstituted. Imputations of fraud must be proved by clear and convincing evidence.²⁴ Petitioner failed to adduce evidence of fraud. In an action for re-conveyance based on fraud, he who charges fraud must prove such fraud in obtaining a title. In this jurisdiction, fraud is never presumed.²⁵ The strongest suspicion cannot sway judgment or overcome the presumption of regularity. The sea of suspicion has no shore, and the court that embarks upon it is without rudder or compass.²⁶ Worse, the imputation of fraud was so tardily brought, some forty-four (44) years or sixty-one (61) years after its supposed occurrence, that is, from the administrative reconstitution of title on July 26, 1948, or from the issuance of the original title on November 19, 1931, that verification is rendered extremely difficult, if not impossible, especially due to the supervening event of the second world war during which practically all public records were lost or destroyed, or no longer available.

Petitioners next question the lack of technical description inscribed in the reconstituted title in Cebu Country Club, Inc.s name. This is not a bar to reconstitution of the title nor will it affect the validity of the reconstituted title. A registered owner is given two (2) years to file a plan of such land with the Chief of the General Land Registration Office.²⁷ The two-year period is directory, not jurisdictional. In other words, the failure to submit the technical description within two (2) years would not invalidate the title. At most, the failure to file such technical description within the two-year period would bar a transfer of the title to a third party in a voluntary transaction.

Second Issue: Whether Francisco Alonso is owner of the land

The second issue is whether the Court of Appeals erred in ruling that the Cebu Country Club, Inc. is owner of Lot No. 727.

Admittedly, neither petitioners nor their predecessor had any title to the land in question. The most that petitioners could claim was that the Director of Lands issued a sales patent in the name of Tomas N. Alonso. The sales patent, however, and even the corresponding deed of sale were not registered with the Register of Deeds and no title was ever issued in the name of the latter. This is because there were basic requirements not complied with, the most important of which was that the deed of sale executed by the Director of Lands was not approved by the Secretary of Agriculture and Natural Resources. Hence, the deed of sale was void.²⁸ Approval by the Secretary of Agriculture and Commerce is indispensable for the validity of the sale.²⁹ Moreover, Cebu Country Club, Inc. was in possession of the land since 1931, and had been paying the real estate taxes thereon based on tax declarations in its name with the title number indicated thereon. Tax receipts and declarations of ownership for taxation purposes are strong evidence of ownership.³⁰ This Court has ruled that although tax declarations or realty tax payments are not conclusive evidence of ownership, nevertheless, they are good indicia of possession in the concept of owner for no one in his right mind will be paying taxes for a property that is not in his actual or constructive possession.³¹cräläwvirtualibräry

Notwithstanding this fatal defect, the Court of Appeals ruled that there was substantial compliance with the requirement of Act No. 1120 to validly convey title to said lot to Tomas N. Alonso.³²cräläwvirtualibräry

On this point, the Court of Appeals erred.

Under Act No. 1120, which governs the administration and disposition of friar lands, the purchase by an actual and bona fide settler or occupant of any portion of friar land shall be agreed upon between the purchaser and the Director of Lands, subject to the approval of the Secretary of Agriculture and Natural Resources (mutatis mutandis).³³cräläwvirtualibräry

In his Memorandum filed on May 25, 2001, the Solicitor General submitted to this Court certified copies of Sale Certificate No. 734, in favor of Leoncio Alburo, and Assignment of Sale Certificate No. 734, in favor of Tomas N. Alonso. Conspicuously, both instruments do not bear the signature of the Director of Lands and the Secretary of the Interior. They also do not bear the approval of the Secretary of Agriculture and Natural Resources.

Only recently, in Jesus P. Liao v. Court of Appeals,³⁴ the Court has ruled categorically that approval by the Secretary of Agriculture and Commerce of the sale of friar lands is indispensable for its validity, hence, the absence of such approval made the sale null and void ab-initio.³⁵Necessarily, there can be no valid titles issued on the basis of such sale or assignment.³⁶ Consequently, petitioner Franciscos father did not have any registerable title to the land in question. Having none, he could not transmit anything to his sole heir, petitioner Francisco Alonso or the latters heirs.

In a vain attempt at showing that he had succeeded to the estate of his father, on May 4, 1991, petitioner Francisco Alonso executed an affidavit adjudicating the entire estate to himself (Exh. Q),duly published in a newspaper of general circulation in the province and city of Cebu (Exh. Q-1). Such affidavit of self-adjudication is inoperative, if not void, not only because there was nothing to adjudicate, but equally important because petitioner Francisco did not show proof of payment of the estate tax and submit a certificate of clearance from the Commissioner of Internal Revenue.³⁷ Obviously, petitioner Francisco has not paid the estate taxes.

Consequently, we rule that neither Tomas N. Alonso nor his son Francisco M. Alonso or the latters heirs are the lawful owners of Lot No. 727 in dispute. Neither has the respondent Cebu Country Club, Inc. been able to establish a clear title over the contested estate. The reconstitution of a title is simply the re-issuance of a lost duplicate certificate of title in its original form and condition. It does not determine or resolve the ownership of the land covered by the lost or destroyed title. A reconstituted title, like the original certificate of title, by itself does not vest ownership of the land or estate covered thereby.³⁸

Third Issue: Action has prescribed or is barred by laches

The third issue is whether petitioners action for re-conveyance has prescribed or is barred by laches.

An action based on implied or constructed trust prescribes in ten (10) years... from the time of its creation or upon the alleged fraudulent registration of the property.³⁹ Petitioner Franciscos action in the court below was basically one of re-conveyance. It was filed on September 25, 1992, sixty-one (61) years after the title was issued on November 19, 1931, and forty-four (44) years after its reconstitution on July 26, 1948. Thus, the failure of petitioner Francisco and his father to assert ownership of the land for over sixty (60) years during which the Cebu Country Club, Inc. was in possession is simply contrary to their claim of ownership.⁴⁰ Petitioner Franciscos and his fathers long inaction or passivity in asserting their rights over disputed property will preclude them from recovering the same.⁴¹cräläwvirtualibräry

Aside from the fact that, as herein-above stated, neither petitioner Francisco nor his father held a valid title over the land, and that there was no showing that his father owned the land at the time of his demise so as to bequeath the same to petitioner Francisco as his sole heir, by now, the rule is firmly settled that an action for re-conveyance based on fraud must be filed within ten (10) years from discovery of the fraud which as to titled lands referred to the registration of the title with the register of deeds.⁴² An action for re-conveyance is a legal remedy granted to a landowner whose property has been wrongfully or erroneously registered in anothers name, but then the action must be filed within ten years from the issuance of the title since such issuance operates as a constructive notice.⁴³ In addition, the action is barred by laches because of the long delay before the filing of the case.⁴⁴

Fourth Issue: No stare decisis

The next issue is whether the Court of Appeals erred in not ruling that the decision in Ramon Cabrera-Graciano Ingles vs. Cebu Country Club, Inc., CA-G. R. No. 65559-R, October 31, 1981, was binding on respondent Cebu Country Club, Inc. as to the land in question.

Petitioners assert that as the Court of Appeals annulled Cebu Country Club, Inc.s title in the Cabrera-Ingles case, so too must the title in this case be declared void. In the first place, there is no identity of parties; secondly, neither the titles to nor the parcels of land involved are the same. Consequently, the doctrine of res-judicata does not apply.⁴⁵ Momentarily casting aside the doctrine of res-judicata, there is an important moiety in the Cabrera-Ingles case. There, the Director of Lands, after the administrative reconstitution of the title, issued a directive to the Register of Deeds to register the lot in question in favor of Graciano Ingles.⁴⁶ This superseded the administrative reconstitution, rendering allegations of fraud irrelevant. Here, the Director of Lands did not issue a directive to register the land in favor of Tomas N. Alonso. And worse, the sales patent and corresponding deed of sale executed in 1926 are now stale.⁴⁷cräläwvirtualibräry

Petitioners further contend that the Supreme Courts minute resolution refusing to review that decision is equivalent to a judgment on the merits. The minute resolution may amount to a final action on the case but it is not a precedent.⁴⁸ It can not bind non-parties to the action. To restate, the rule is that: (1) a judgment in rem is binding upon the whole world, such as a judgment in a land registration case or probate of a will; (2) a judgment in personam is binding upon the parties and their successors in interest but not upon strangers.⁴⁹ A judgment directing a party to deliver possession of a property to another is in personam; it is binding only against the parties and their successors in interest by title subsequent to the commencement of the action.⁵⁰ Suits to quiet title are not technically suits in rem, nor are they, strictly speaking, in personam, but being against the person in respect of the res, these proceedings are characterized as quasi in rem. The judgment insuch proceedings is conclusive only between the parties.⁵¹ In this case, the action below is basically one for declaration of nullity of title and recovery of ownership of real property, or re-conveyance. An action to recover a parcel of land is a real action but it is an action in personam, for it binds a particular individual only although it concerns the right to a tangible thing.⁵² Any judgment therein is binding only upon the parties properly impleaded.⁵³cräläwvirtualibräry

What is more, the doctrine of stare decisis notwithstanding, the Court has abandoned or overruled precedents whenever it realized that the Court erred in the prior decisions. After all, more important than anything else is that this Court should be right.⁵⁴

Fifth Issue: Award of attorneys fees

The final issue raised is whether or not the Court of Appeals erred in awarding in favor of the Cebu Country Club, Inc. attorneys fees of P400,000.00 as damages and P51,000.00 as litigation expenses.⁵⁵cräläwvirtualibräry

An award of attorneys fees and expenses of litigation is proper under the circumstances provided for in Article 2208 of the Civil Code, one of which is when the court deems it just and equitable that attorneys fees and expenses of litigation should be recovered⁵⁶ and when the civil action or proceeding is clearly unfounded and where defendant acted in gross and evident bad faith.⁵⁷ The award of attorneys fees as damages is the exception rather than the rule; it is not to be given to the defendant every time the latter prevails. The right to litigate is so precious that a penalty should not be charged on those who may exercise it erroneously, unless, of course such party acted in bad faith.⁵⁸ In this case, however, we would rather not award attorneys fees and expenses of litigation in the absence of showing of gross and evident bad faith in filing the action.⁵⁹

The Judgment

WHEREFORE, we DENY the petition for review. However, we SET ASIDEthe decision of the Court of Appeals⁶⁰ and that of the Regional Trial Court, Cebu City, Branch 08.⁶¹cräläwvirtualibräry

IN LIEU THEREOF, we DISMISSthe complaint and counterclaim of the parties in Civil Case No. CEB 12926 of the trial court. We declare that Lot No. 727 D-2 of the Banilad Friar Lands Estate covered by Original Certificate of Title Nos. 251, 232, and 253 legally belongs to the Government of the Philippines.

No costs.

SO ORDERED.

Davide, Jr., C.J., Bellosillo, Puno, Vitug, Kapunan, Mendoza, Quisumbing, Buena, De Leon, Jr., and Carpio, JJ., concur.

Melo, J., see dissenting opinion.

¹ In CA-G.R. CV No. 41918, promulgated on March 31, 1997.

² In Civil Case No. CEB-12926, Decision, dated May 7, 1993, Original Record, pp. 569-596.

³ Rule 45, Section 1, Revised Rules of Court.

⁴ De la Cruz v. Court of Appeals, 333 Phil. 126, 136 [1996], citing Gobonseng, Jr. v. Court of Appeals, 316 Phil. 570 [1995]; Co v. Court of appeals, 317 Phil. 230 [1995].

⁵ CA-G.R. CV No. 65559-R, promulgated on October 30, 1981.

⁶ Assigned to Branch 8.

⁷ Docketed as Civil Case No. CEB-12926.

⁸ Dated February 19, 1947.

⁹ Dated August 5, 1946.

¹⁰ Original RTC Record, pp. 59-69.

¹¹ Court of Appeals Decision, promulgated on March 31, 1997, Rollo, p. 76.