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[G.R. No. 153691. July 19, 2006]

DR. EDUARDO RELLIN versus MIGUEL C. BELARMINO

Third Division

Sirs/Mesdames:

Quoted hereunder, for your information, is a resolution of this Court dated JULY 19, 2006 .

G.R. No. 153691 (Dr. Eduardo Rellin versus Miguel C. Belarmino)

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RESOLUTION

This is an appeal from the Decision [1] cralaw dated October 17, 2001 and the Resolution [2] cralaw dated May 20, 2002 of the Court of Appeals in CA-G.R. CV No. 55923. The appellate court had affirmed the Decision dated October 25, 1995 of the Regional Trial Court of Kidapawan City, Cotabato, Branch 17. [3] cralaw

The facts, as found by the Court of Appeals, are as follows: [4] cralaw

On March 10, 1947, one Florita Sembria executed a Transfer of Homestead Rights in favor of herein respondent, Miguel Belarmino. The property subject of the transfer was Lot No. 51, Block 23, Pls-59 in the Kidapawan Subdivision.

On August 16, 1952, the same property was the subject of a Deed of Mortgage between Miguel Belarmino as mortgagor and petitioner, Dr. Eduardo Rellin, as mortgagee. The deed mortgaged only the improvements introduced and at that time existing on the property. The consideration for the mortgage was eight thousand pesos (P8,000), payable within two (2) years from the date of execution of the deed, or until May 16, 1954.

Petitioner Rellin alleges, however, that what transpired was a sale of the subject parcel of land entered into by him and Ananias Belarmino, father of respondent Miguel Belarmino.

On April 14, 1955, Original Certificate of Title (OCT) No. V-9163 was issued in favor of Miguel Belarmino. This was recorded in the Registration Book for the province of Cotabato on June 6, 1956. The OCT covered the property mentioned in the Deed of Mortgage. [5] cralaw

On July 29, 1974, respondent, through counsel, sent a demand letter to petitioner for the return of the property as well as the title thereto. The respondent waited more than a year for a reply which did not come. On February 4, 1976, the respondent filed a complaint [6] cralaw with the then Court of First Instance, Third Branch of Kidapawan, North Cotabato (now Branch 17, Regional Trial Court of Kidapawan, Cotabato) for recovery of property and possession with accounting and damages against petitioner. After trial, the lower court rendered the assailed decision against the defendant, now herein petitioner. It held as follows:

WHEREFORE, premises considered, judgment is hereby rendered:

a) Ordering the defendant Dr. Eduardo Rellin to vacate the premises and peacefully turn over the property to the plaintiff;

b) Ordering defendant to return the Original Certificate of Title (OCT) No. V-9163 to the plaintiff;

c) Ordering the defendant to account for the produce of the land from 1952 until he vacates the premises;

d) Ordering defendant to pay [a]ttorney's fees in the sum of P7,000.00;

e) And to pay the costs of the suit.

It is so ordered. [7] cralaw

Petitioner's appeal was denied by the Court of Appeals which affirmed the decision of the trial court. [8] cralaw It also denied petitioner's motion for reconsideration.

Now, petitioner submits to us the following issues for resolution:

I.������� WHETHER OR NOT THE COURT OF APPEALS ERRED IN NOT RULING THAT THE ACTION WAS BARRED BY ACQUISITIVE OR EXTINCTIVE PRESCRIPTION AS WELL AS LACHES;

II.������ WHETHER OR NOT THE COURT OF APPEALS ERRED IN NOT DECLARING THAT THE PROPERTY WAS VALIDLY SOLD;

III.����� WHETHER OR NOT THE COURT OF APPEALS ERRED IN DECLARING THAT THE GOOD FAITH OF THE PETITIONER IS IMMATERIAL; [9] cralaw

On the first issue: Has prescription set in? Petitioner contends that prescription had set in considering that he had been in possession of the subject property since 1952. [10] cralaw Respondent counters that prescription was inapplicable since his land is covered by the Torrens system under Original Certificate of Title No. V-9163 in his name. [11] cralaw

We agree with respondent. Prescription could not arise in the instant case. [12] cralaw Respondent has in his favor the law that protects holders of title under the Torrens System of land registration. [13] cralaw Once a title is registered, the owner may rest secure, without the necessity of waiting in the portals of the court, or sitting in the "mirador de su casa," to avoid the possibility of losing his land. [14] cralaw In Vencilao, [15] cralaw a case with analogous facts, the Court held:

In awarding the disputed land to petitioners, the trial court erroneously found that petitioners had been in possession and enjoyment of the property for more than thirty (30) years. It should be noted that the land in dispute is a registered land placed under the operation of the Torrens system way back in 1959, or more than thirty (30) years before petitioners instituted the present action in the court a quo, and for which Original Certificate of Title No. 400 was issued. The rule is well-settled that prescription does not run against registered land. Thus, under Sec. 47 of PD 1529, otherwise known as the Property Registration Decree, it is specifically provided that "no title to registered land in derogation of that of the registered owner shall be acquired by prescription or adverse possession." A title, once registered, cannot be defeated even by adverse, open and notorious possession. The certificate of title issued is an absolute and indefeasible evidence of ownership of the property in favor of the person whose name appears therein. It is binding and conclusive upon the whole world. All persons must take notice and no one can plead ignorance of the registration.

Has laches set in? We observe that the petitioner did not exercise his alleged rights of ownership of the property when he did not foreclose the mortgage, despite having all the opportunity to do so from the time the right to foreclose arose. He could not now claim that respondent is barred by time to recover the property. Impuris minibus nemo accedat curiam. Let no one come to court with unclean hands. [16] cralaw Also, well-entrenched is the rule in our jurisdiction that the law aids the vigilant and not those who slumber on their rights. Vigilantis sed non dormientibus jura in re subveniunt. [17] cralaw

Moreover, a collateral attack on the title of Miguel Belarmino is out of the question. The issue of the validity of title, i.e. whether or not it was fraudulently issued, can only be raised in an action expressly instituted for that purpose. [18] cralaw In Yba�ez v. Intermediate Appellate Court, [19] cralaw we have emphatically ruled:

It was erroneous for petitioners to question the Torrens Original Certificate of Title issued to private respondent over Lot No. 986 in Civil Case No. 671, an ordinary civil action for recovery of possession filed by the registered owner of the said lot, by invoking as affirmative defense in their answer the Order of the Bureau of Lands, dated July 19, 1978, issued pursuant to the investigatory power of the Director of Lands under Section 91 of Public Land Law (C.A. 141 as amended). Such a defense partakes of the nature of a collateral attack against a certificate of title brought under the operation of the Torrens system of registration pursuant to Section 122 of the Land Registration Act, now Section 103 of P.D. 1259 (sic). The case law on the matter does not allow collateral attack on the Torrens certificate of title on the ground of actual fraud. The rule now finds expression in Section 48 of P.D. 1529 otherwise known as the Property Registration Decree.

Another case, Bolisay v. Alcid, [20] cralaw cited in the recent case of Pacioles, Jr. v. Chuatoco-Ching, [21] cralaw held:

. . . In regard to such incident of inclusion or exclusion, We hold that if a property covered by Torrens Title is involved, the presumptive conclusiveness of such title should be given due weight, and in the absence of strong compelling evidence to the contrary, the holder thereof should be considered as the owner of the property in controversy until his title is nullified or modified in an appropriate ordinary action, particularly, when as in the case at bar, possession of the property itself is in the persons named in the title . . .

Corollarily, P.D. 1529, otherwise known as, "The Property Registration Decree," proscribes collateral attack against Torrens Title, hence:

Section 48. Certificate not subject to collateral attack.

A certificate of title shall not be subject to collateral attack. It cannot be altered, modified or cancelled except in a direct proceeding in accordance with law.

In the present petition, petitioner seeks from respondent the recovery of the subject property. It is evident that the objective of such claim is to nullify the title of respondent to the property in question, which thereby challenges the judgment pursuant to which the title was decreed. This is in reality a collateral attack, which is not permitted under the principle of indefeasibility of a Torrens Title. It is well settled that a Torrens Title cannot be collaterally attacked. The issue on the validity of title can only be raised in an action expressly instituted for that purpose. Hence, whether or not petitioners have the right to claim ownership of the land in question is beyond the province of the instant proceeding. [22] cralaw

Was there a valid sale to petitioner? Petitioner avers that there was transfer of title by sale. [23] cralaw Ananias Belarmino, the father of the respondent, allegedly executed a document entitled Confirmation of Sale acknowledging and confirming the sale of property to the petitioner. [24] cralaw Respondent replies that such sale was void, having been made during the prohibited five (5) year period and no confirmation of sale made by Ananias Belarmino even after the lapse of the five-year period can ratify the sale. [25] cralaw

Section 118 of Commonwealth Act No. 141, as amended, otherwise known as the Public Land Act, provides:

Except in favor of the Government or any of its branches, units, or institutions, or legally constituted banking corporation, lands acquired under free patent or homestead provisions shall not be subject to encumbrance or alienation from the date of approval of the application and for a term of five years from and after the date of issuance of the patent or grant nor shall become liable to the satisfaction of any debt contracted prior to the expiration of said period; but the improvements or crops on the land may be mortgaged or pledged to qualified associations, or corporations.

Conformably with the foregoing provision, the alleged sale of the disputed land did not produce any effect because such is prohibited. That sale is void, inexistent and could not be ratified and a mere lapse of time cannot give efficacy to it. [26] cralaw In Saltiga de Romero v. Court of Appeals, [27] cralaw the Court held:

As for the alleged sale of three portions of the lot for a consideration of P3,000.00 each evidenced by the three affidavits of sale executed by LUTERO in favor of GLORIOSA, PRESENTACION and LUCITA, the Court of Appeals correctly declared the three conveyances void. CA 141 prohibits the alienation of a homestead within five years from the issuance of the patent and grant under Section 118, which states:

Sec. 118. Except in favor of the Government or any of its branches, units, or institutions, lands acquired under free patent or homestead provisions shall not be subject to encumbrance or alienation from the date of the approval of the application and for a term of five years from and after the date of issuance of the patent and grant, nor shall they become liable to the satisfaction of any debt contracted prior to the expiration of said period, but the improvements or crops on the land may be mortgaged or pledged to qualified persons, associations, or corporations.

No alienation, transfer, or conveyance of any homestead after five years and before twenty-five years after the issuance of title shall be valid without the approval of the Secretary of Agriculture and Commerce, which approval shall not be denied except on constitutional and legal grounds.

The conveyance of a homestead before the expiration of the five-year prohibitory period following the issuance of the homestead patent is null and void and cannot be enforced, for 'it is not within the competence of any citizen to barter away what public policy by law seeks to preserve. (Ortega v. Tan, 181 SCRA 350 at p. 356 [1990]). In the present case, since the sales were made on January 17, 1969 or less than two years after the issuance of LUTERO's title to the homestead on April 7, 1967, the sales are clearly void.

Furthermore, Ananias Belarmino cannot claim ownership of the land in question nor could he validly transfer ownership of said lot to the petitioner since he is not the registered owner. As correctly pointed out by the Court of Appeals, it is only the respondent, Miguel Belarmino, who could validly dispose of or alienate his property.

On the third issue, petitioner states that he cannot be ordered to account for the fruits that he derived from the subject land. [28] cralaw Respondent answers that there was bad faith on the part of petitioner, when the latter insisted on using the land. [29] cralaw

Indeed, we find bad faith on the part of the petitioner, when he refused to return the land to the respondent, despite several demands made by Miguel Belarmino for its return. As such, he is not entitled to the benefits the law bestows on individuals acting in good faith.

Moreover, the issue of good faith on the part of the petitioner has not been raised by him before the Court of Appeals. Issues not raised or ventilated in the court a quo cannot be raised for the first time on appeal as to do so would be offensive to the basic rules of fair play and justice. [30] cralaw

WHEREFORE, the petition is DENIED for lack of merit. The Decision dated October 17, 2001 of the Court of Appeals and its Resolution dated May 20, 2002 are AFFIRMED.

Costs against petitioner.

SO ORDERED.

Very truly yours,

(Sgd.) LUCITA ABJELINA-SORIANO
Clerk of Court


Endnotes:

[1] cralaw Rollo, pp. 8-13. Penned by Associate Justice Eubulo G. Verzola, with Associate Justices Marina L. Buzon, and Bienvenido L. Reyes concurring.

[2] cralaw Id. at 15.

[3] cralaw Id. at 12.

[4] cralaw Id. at 9-10.

[5] cralaw Id.

[6] cralaw Id. at 40-44.

[7] cralaw Id. at 60.

[8] cralaw Id. at 12.

[9] cralaw Id. at 144-145.

[10] cralaw Id. at 145.

[11] cralaw Id. at 166-167.

[12] cralaw See Ong v. Court of Appeals, G.R. No. 142056, April 19, 2001, 356 SCRA 768, 771-772, which said: "Even on the merits, the petition must fail as it does not provide any reason for this Court to disagree with the uniform ruling of the three (3) lower courts. Petitioners' alleged possession of subject property since 1972 cannot render nugatory the right of respondents as holders of a certificate of title. Prescription does not run against registered land. A title, once registered, cannot be defeated even by adverse, open and notorious possession. The subject property was previously titled in the name of spouses Pedro and Josefa Quiamco, then transferred to Trinidad, and later to respondents. Moreover, in asserting ownership by donation, petitioners were in effect assailing the title of respondents. The Court of Appeals correctly brushed aside this argument of petitioners by invoking our ruling that a Torrens title cannot be collaterally attacked, the issue on its validity can only be raised in an action expressly instituted for that purpose."

[13] cralaw Ramos v. Court of Appeals, G.R. No. 111027, February 3, 1999, 302 SCRA 589, 603.

[14] cralaw Legarda and Prieto v. Saleeby, 31 Phil. 590, 593 (1915).

[15] cralaw Heirs of Leopoldo Vencilao, Sr. v. Court of Appeals, G.R. No. 123713, April 1, 1998, 288 SCRA 574, 581.

[16] cralaw Akbayan-Youth v. Commission on Elections, G.R. No. 147066, March 26, 2001, 355 SCRA 318, 341.

[17] cralaw Id.

[18] cralaw Eduarte v. Court of Appeals, G.R. No. 121038. July 22, 1999, 311 SCRA 18, 26.

[19] cralaw G.R. No. 68291, March 6, 1991, 194 SCRA 743, 748.

[20] cralaw No. L-45494, August 31, 1978, 85 SCRA 213, 220.

[21] cralaw G.R. No. 127920, August 9, 2005, 466 SCRA 90, 102.

[22] cralaw Halili v. Court of Industrial Relations, G.R. Nos. 24864, 27773, 30110, 38655, May 30, 1996, 257 SCRA 174, 184.

[23] cralaw Rollo, p. 150.

[24] cralaw Id.

[25] cralaw Id. at 168.

[26] cralaw NEW CIVIL CODE, Art. 1409. The following contracts are inexistent and void from the beginning:

(1) Those whose cause, object and purpose is contrary to law, morals, good customs, public order or public policy;

(2) Those which are absolutely simulated or fictitious;

(3) Those cause or object did not exist at the time of the transaction;

(4) Those whose object is outside the commerce of men;

(5) Those which contemplate an impossible service;

(6) Those where the intention of the parties relative to the principal object of the contract cannot be ascertained;

(7) Those expressly prohibited or declared void by law;

These contracts cannot be ratified. Neither can the right to set up the defense of illegality be waived.

Art. 1410. The action or defense for the declaration of the inexistence of a contract does not prescribe.

[27] cralaw G.R. No. 109307, November 25, 1999, 319 SCRA 180, 191-192.

[28] cralaw Rollo, p. 153.

[29] cralaw Id. at 174-175.

[30] cralaw See R.P. Dinglasan Construction, Inc. v. Atienza, GR No. 156104, June 29, 2004, 433 SCRA 263, 271-272. It held: "On the second issue, petitioner cannot impugn for the first time the computation of the monetary award granted by the labor arbiter to private respondents. The settled rule is that issues not raised or ventilated in the court a quo cannot be raised for the first time on appeal as to do so would be offensive to the basic rules of fair play and justice.... " (Emphasis supplied.)


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