ANA P. FERNANDEZ, PLAINTIFF-APPELLEE, VS. FELIZA ABORATIGUE AND RESTITUTO BACNAN, DEFENDANTS-APPELLANTS.

The plaintiff, claiming ownership of a parcel of land situated
in, sitio Dipulao, barrio Central, township of Coron, Palawan, filed suit^[1]
in the Palawan Court of First Instance to have the defendants vacate a portion
of said land and cease exercising acts of ownership therein.

It was alleged in the complaint that Vicente Aboratigue, father
of defendant Feliza Aboratigue was during his lifetime employed as guard at one
of the gates to the property, and as such was allowed to plant fruit trees in a
small portion in the immediate vicinity; and that after his death the said defendant,
together with her husband Restituto Bacnan, were allowed to stay therein, but
that later on they claimed to be the owners of the said portion.  In their answer to the complaint the
defendants alleged, as basis of their claim of ownership, continuous possession
and cultivation of the disputed area, by themselves and through their pre­decessors-in-interest
since the year 1901.

In the course of the trial, on November 4, 1958, upon the court’s
suggestion the following stipulation of facts was submitted by the respective
counsel for the parties:

“1.  Parties agreed that the plaintiff Ana P.
Fernandez is the owner of a parcel of land under Transfer Certificate of Title
No. 306 in the name of Ana P. Fernandez, formerly under Title No. 209 in the
name of Ana P. Fernandez and her late husband Guillermo Fernandez located in
sitio Dipulao, Coron, Palawan, the tech­nical description is stated in said
title and the Blue Print Map is found in the plan marked as Exhibit
“2” for the defendants, the Title is marked as Exhibit “A”
for the plaintiff.

“2.  Parties agreed that the following appears in
the Title of Ana P. Fernandez:  ‘A parcel
of land Plan No. 11-7482 with all the building and improvements, except those
herein expressly noted as belonging to other persons situated in sitio Dipulao
barrio of Central township of Coron.’

“3.  Parties agreed that in a photostatic copy of
the official survey plan of the land adjudicated to Ana P. Fernandez which was
submitted by the defendants, there is an area enclosed by the dotted line on
the northwest corner of the said land with the following annotation:

‘Claimed by Vicente Aboratigue.’

“4.  That both parties also agreed that the area
claimed by the defendants is not approximately 16 hectares, but the portion
described by the dotted lines located in the plan which is the exhibit of the
defendants.

“The case is submitted for the determination of the Court on the
following issues:

“1.  Does the entire area com­prised in the
official plan belong to the plaintiff Ana P. Fernandez under her Title?

“2.  Does the reservation contained in said Title
under the phrase ‘except – those herein expressly noted as belong­ing to other
persons situated in barrio Dipulao’ and confirmed by the annota­tion in the
Official Plan 11-7482 re­move said area from the entire property in favor of
the defendant claimants, Vicente Aboratigue’s successors in interest.”

On November 25, 1958 the defendants moved for a formal hearing of
the case, alleging that the final draft of the stipulation as dictated by the
court was not shown to them before it was signed by their counsel; that it did
not contain certain matters relevant to the defense, particularly their
continuous possession and cultivation of the land in question since 1901; and
that there were portions in the stipulation that were not agreeable to them.

The parties, through their counsel, were ordered to argue the
motion in writing, but only the plaintiff’s counsel did so by way of
opposition; and on January 28, 1959 the Court denied the motion and on the basis
of the facts stipulated rendered judgment for the plaintiff, declaring her to
be the owner of the disputed property and ordering the defendants to vacate the
same, with right to reimbursement of the value of the improvements thereon,
they being builders in good faith.

The defendants appealed to the Court of Appeals, and the case was
later certified to this Court on the ground that the questions involved are
purely legal.

The first issue is whether or not the trial court erred in not
setting aside the stipulation of facts and in not granting a formal hearing
with respect to matters not covered thereby, although raised in the
pleadings.  These matters, as already
observed, refer to the appellants’ allegation of possession under claim of
ownership since 1901.  The second issue,
corollary to the first, is whether or not the decision is correct and justified
on the basis of the stipulated facts alone.

1.  The facts set forth in
the stipulation are not denied.  They are
a matter of record.  Apropos, the trial
court found that the land (containing an area of 135.4016 hectares) was
originally registered in 1918 under original certificate of title No. 354 in
the name of a certain Rufo Sandoval, then transferred to Manuel Sandoval, from
whom the appellee herein subsequently ac­quired it.

The appellants’ defense, as formulated in their answer, is as
follows:

“C.  That the parcel of land in question is outside
and not included as part and parcel of the land covered by Transfer Certificate
of Title No. 209 as shown on the plan 11-7482 of the land covered by Transfer
Certificate of Title No. 209 and the land in question is situated on the
NORTHWESTERN part of the land of the plaintiff clearly shown by dotted lines
with the following notation – “CLAIMED BY VICENTE ABORATICUE” placed
on the land in question as shown on plan II-7482 of the land covered by
Transfer Certificate of Title No. 209.

“D.  That the said Transfer Certificate of Title
No. 209 speci­fically and unequivocally excluded the land in question as part
of the land covered by it expressed in the following words –

‘x x x, except those herein expressly noted as belonging to other
person x x x’

and the provisions in the said Transfer
Certificate of Title No. 209 – ‘x x x, EXCEPT THOSE HEREIN EXPRESSLY NOTED AS
BELONGING TO OTHER PERSON x x x’ the defendants allege and claim as referring
to VICENTE ABORATIGUE indicated on plan 11-7482 of the land evidenced by
Transfer Certificate of Title No. 209 on the northwestern part of the said plan
enclosed by dotted lines wherein it is written “CLAIMED BY VICENTE ABORA­TIGUE,”
a certified copy of the said plan will be presented during the hearing of this
case.

“E.  That the defendants are of the full belief
that the provi­sions in the said Transfer Certi­ficate of title No.  209 –

‘x x x, except those herein expressly noted as belonging to other
person x x x.’

refer to Vicente Aboratigue and his heirs
as the said plan 11-7482 does not show any other persons claiming any portions
of the land inside the said plan II-7482.”

A reading of the foregoing allegations shows an admission rather
than a denial of the fact that the portion of the land “claimed by Vicente
Aboratigue,” father of appellant Feliza Aboratigue, is part of the area
covered by the appellee’s certificate of title. 
Reference to the technical description therein on one hand and to the
survey plan on the other, confirms the said fact unequi­vocally, and the trial
court has so stated in its resolution denying the appellants’ motion for
reconsideration.  The appellants’ theory
is simply this:  that because on the
survey plan a certain part of the land in its northwestern corner is enclosed
in dotted lines and carries the notation “claimed by Vicente
Aboratigue,” that part is not covered by the appellee’s title in view of
the phrase “. . . except those herein expressly noted as belonging to
other per­sons…” This theory accepts the truth of, and indeed is
premised upon, the facts stipulated; and therefore the appellants’ insistence
that the stipulation be disregarded is groundless.  It is true that their alleged occupation and
cultivation of the disputed area since 1901 was not included in the
stipulation, but the point is not material to the resolution of the question o
f ownership.  The said area is part of
the bigger parcel originally registered in 1918 under the Land Registration
Act, Section 46 of which provides that “no title to registered land in
derogation to that of the registered owner shall be acquired by pres­cription
or adverse possession.”

2.  The appellants rely on
the fact that on the survey plan of the entire parcel covered by the appellee’s
title a portion is enclosed in dotted lines with the notation “claimed by
Vicente Aboratigue,” and, in relation thereto, on the following words on
the certi­ficate itself:  “a parcel
of land (plan 11-7482) with all buildings and improvements, except those
herein ex­pressly noted as belonging to other persons x x x.”

(a)  It is obvious that a mere claim cannot defeat
a registered title.  Furthermore, the
“claim” here is only noted on the survey plan, and such notation
cannot prevail over the actual decree of registration as reproduced in the
certificate.  All claims of third persons
to the property must be asserted in the registration proceedings.  If any claim to a portion thereof is upheld,
that portion is segregated from the property applied for, and is not included
in the decree of regis­tration and certificate of title subsequently issued to
the applicant.  If it is included, the
claim is deemed adversely resolved with finality, subject only to a peti­tion
for review of the decree within one year from its issuance on the ground of
fraud, under Section 38 of the Land Registration Act.

(b)  No belabored exercise in legal hermeneutics is
necessary to arrive at the conclusion, as the trial court did, that the
exception in the appellee’s title relied upon by the appellants refers not to
the land but only to buildings and improvements thereon, and then only to such
as are noted on the certificate itself and not on any extraneous document.

The rule is that the owner of buildings and improve­ments should
claim them during the proceedings for registration and the fact of ownership,
if upheld by the court, must be noted on the face of the certificate.  There is no such notation here in favor of
the appellants.  However, inasmuch as the
improvements in the disputed area have been acknowledged by plaintiff in her
complaint as belonging to the appellants predecessor-in-interest, and the lower
court’s decision allowing them to recover the value of the improvements is not
now in question, this right of the appellants must be upheld.  The trial court has left the determination of
such value to mutual agree­ment between the parties.  This disposition should be modified in the
sense that if they fail to agree, the matter should be submitted to the said
court for hearing and adjudication.

With that modification above indicated, the judgment appealed
from is affirmed, with costs.

Reyes, J.B.L., Acting C.J., Dizon, Fernando, Teehankee,
Barredo, Villamor, and Makasiar, JJ., concur.

Zaldivar and Castro, J.,
did not take part.

Concepcion, C.J., on leave.

^[1]
Civil Case No. 309, Court of First Instance of Palawan, filed on August 26,
1958.