HEIRS OF RESTITUTA QUILNET, NAMELY: ELENA Q. LAMBAYAN, DIONISIO DIVINO, SPOUSE FLORA DIVINO, MARIA FE DIVINO, JOINED BY HER SPOUSE TEOFILO LUMJOD, JOSE L. DIVINO, ENGRACIA L. BA…

Heirs of Quilnet versus Luyas

The Case

This is a case about a Deed of Sale over two portions of land, and why the Supreme Court refused to give it effect. The heirs of Restituta Quilnet sued the heirs of Inocenta Quilnet for quieting of title and reconveyance, claiming that Restituta had bought portions of two lots from Inocenta under a notarized Deed of Sale dated October 24, 1968. The defendants answered that the deed was void, that the thumb mark was forged, that there was no definite subject matter and no consideration, and that the action was barred by estoppel, laches, and prescription. The case matters because it teaches the limits of the presumption of regularity of a notarized document, and because it applies the prohibition on alienation under the Public Land Act to a sale made before the free patent was issued and registered.

Procedural History

The plaintiffs filed a Complaint for Quieting of Title, Reconveyance with Preliminary Mandatory Injunction, Damages, and a Prayer for Restraining Order before the Regional Trial Court, Branch 39 of Dumaguete City. A complaint in intervention was filed by other claimants, but the trial court dismissed it in an Order dated September 24, 2002, because the portions they claimed were different from those claimed by the plaintiffs. On October 28, 2009, the trial court rendered a Decision dismissing the complaint of the plaintiffs as well as the counterclaims of the defendants, with no pronouncement as to costs, holding that the evidence offered by the plaintiffs was sadly lacking. The plaintiffs appealed to the Supreme Court, assigning three errors: that the trial court erred in holding that they failed to establish a valid title or interest, that it erred in holding that they failed to establish the identity of the property, and that it erred in holding that their action for reconveyance had already prescribed.

Facts

Restituta Quilnet and Inocenta Quilnet were aunt and niece. Inocenta owned two parcels of land, Lot No. 1096 and Lot No. 1098 of Pls-790. On October 24, 1968, a Deed of Sale purportedly conveyed to Restituta a portion of seven hundred thirty-five square meters of the first lot and a portion of one hundred eighty-two square meters of the second lot. The plaintiffs claimed that after the sale, Restituta and her children took possession, built houses, and planted coconut and banana trees.

Inocenta applied for free patents. She was granted a free patent over Lot No. 1096 on March 31, 1969, registered on December 13, 1972, and over Lot No. 1098 on June 11, 1969, registered on July 25, 1975. Certificates of title were issued in her name, covering the very portions said to have been sold. Inocenta died in 1978; Restituta died on January 16, 1980. Neither during Inocenta's lifetime nor after did Restituta register the deed, have it annotated on the title, or pay taxes on the portions. The plaintiffs paid realty taxes only in the year 2000, after the defendants rebuffed their request for segregation, and the tax declarations remained in Inocenta's name. When Engracia Baga sought an electrical connection for her house, she had to ask Pedro Luyas to sign the application because her mother was not the registered owner.

The defendants testified that Inocenta had merely allowed Restituta and her children to stay on the land in 1943 to avoid the Japanese soldiers, and that Restituta never asserted ownership during Inocenta's lifetime. The plaintiffs' geodetic engineer admitted that the Deed of Sale had no technical description, and that he based the location of the portions on the actual position of the fencing and cultivation. The Municipal Assessor testified that tax declarations 789 and 853 both referred to Lot No. 1098.

Issues

• Whether or not the plaintiffs established a valid title or interest over the portions of Lot No. 1096 and Lot No. 1098 by virtue of the notarized Deed of Sale.
• Whether or not the plaintiffs established the identity of the property they sought to recover.
• Whether or not the action for reconveyance had already prescribed.

Applicable Provisions

Section 118 of Commonwealth Act No. 141, the Public Land Act, provides:

Except in favor of the Government or any of its branches, units or institutions, or legally constituted banking corporations, 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 or 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.

This prohibition is the proviso attached to every free patent application, and it is the provision that defeats the sale, because the deed was executed before the patent was issued and registered.

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

This second paragraph fixes the period within which a conveyance of patented land requires approval, underscoring that the land grant is burdened by restrictions that run with the title.

Ruling

On the first issue, the Court held that the plaintiffs failed to establish a valid title. A notarized document carries the presumption of regularity, but that presumption is not absolute and may be rebutted by clear and convincing evidence, and the fact that a deed is notarized is not a guarantee of the validity of its contents. Here the presumption was overthrown by highly questionable circumstances. At the time of the deed, Inocenta had only an inchoate right over the property, which remained part of the public domain and was not susceptible to alienation. The Court quoted the rule that lands acquired under free patent shall not be subject to encumbrance or alienation from the date of approval of the application, and held that Inocenta had no right to transfer the portions in 1968. The Court also found that the parties did not intend a true conveyance: Inocenta had the lots titled in her own name, continued to pay the taxes, and cultivated the land, while Restituta never protested, never registered the deed, never paid taxes, and even asked permission to build her house. The apathy and indifference of Restituta and her heirs conflicted with the nature of an owner.

On the second issue, the Court held that the identity of the property was not established. The tax declarations relied upon both referred to Lot No. 1098, and the geodetic engineer admitted that the deed had no technical description and that he based the location on the actual position of cultivation and fencing. On the third issue, the Court found the appeal without merit, and the trial court's dismissal stood.

Doctrine

First, the presumption of regularity of a notarized document is not absolute; it may be rebutted by clear and convincing evidence, and notarization is not a guarantee of the validity of the deed's contents. Second, a free patent applicant has only an inchoate right before compliance with the law; the land remains part of the public domain and cannot be alienated or encumbered, and any sale made before the patent is issued and registered is void. Third, ownership is judged by the acts of the owner: failure to register the deed, failure to pay taxes, failure to protest the titling in another's name, and asking permission from the registered owner all belie a claim of dominion.

Disposition

The Supreme Court denied the appeal and affirmed the dismissal of the complaint, with the defendants prevailing.

Remember This

Memorize this line: a sale of land covered by a free patent application, made before the patent is issued and registered, conveys nothing, because the seller had only an inchoate right over land still in the public domain. Examiners use this case to test the limits of the presumption of regularity of notarized deeds and the prohibition on alienation under Section 118 of the Public Land Act.