JULIAN, JR., SERGIO, PEDRO, LUIS AND MONICA, ALL SUR­NAMED RODRIGUEZ, PETITIONERS, VS. SABINA TORENO, TIMOTEO TORENO, GLICERIA BOCASE, ALEJANDRO BOCASE, BENJAMIN CAMPOREDONDO, S…

This is a review of the
decision of the Court of Appeals in CA-G.R. No. 30053-R, dated August 22, 1968,
affirming the decision of the Court of First Instance of Davao
City in Civil Case No. 2718, which (1) adjudicated portions of a parcel of land
in favor of Sabina Toreno, Timoteo
Toreno, Gliceria Bocase, the minors Luciana, Alejandro and Lourdes, all
surnamed Bocase, who are represented by their legal
guardians Benjamin Camporedondo, Simplicia,
Pedro, Bernardo Bienvenido and Gregoria,
all surnamed Bocase, and hereinafter referred to as
respondents; and (2) awarded damages against Julian Rodriguez, Sr., hereinafter
referred to as the petitioner, now deceased, and substituted in the instant
petition by his children Julian, Jr., Sergio, Pedro, Luis and Monica.

It appears that during
her lifetime, one Valentina Quiñones
owned a parcel of land in Davao City with an area of 39,043 square meters which
is designated as Lot No. 2017, formerly Lot No. 1226-G of the cadastral survey
of Davao.  On her death, Valentina was survived by her children, namely, Maximina, Martiliano, Felix,
Petra, Eugenia, Restituta and Ana, all surnamed Bocase and all of whom are now deceased.

Maximina died in 1940 and was survived
by her children Sabina Toreno and Timoteo
Toreno, two of the herein respondents.  Martiliano was
surnamed by his children Eugenio, Simplicia,
Pedro, Bernardo and Gregoria, of whom the latter four
are some of the herein respondents. 
Felix was survived by his children Gliceria,
and the three minors Luciana, Alejandro and Lourdes
who are likewise respondent’s herein.  Petra
died a widow and without any issue. 
Eugenia does not appear to have left any children.  Restituta was
survived by her 12 children who, like Ana’s four children, are not parties to
the case at bar.

The land left by the late Valentina Quiñones was brought for registration before a cadastral
court in 1922 and the Original Certificate of Title No. 0-15 was issued on August 7, 1950 in the name of 26
persons, to wit:  the three living
children of Valentina, namely, Petra,
Eugenia and Felix Bocase, and their 23 nephews and
nieces.  The certificate of title, after
its issuance, was delivered to the petitioner by the respondents’ counsel in
the cadas­tral case, one Atty. Suazo.  The petitioner still had the said certificate
of title in his possession at the time
the case was commenced in the trial court.

On July 9, 1958, the respondents filed with the Court of First
Instance of Davao, a complaint for ejectment and damages against the petitioner, alleging
basically that, together with their cousins, the children of Restituta and Ana, they are pro­indiviso
registered owners of the land covered by O.C.T. No. 0-15; that in or about June 1953, the petitioner
illegally, maliciously, and by means of force and intimidation, entered the
land in question and occupied approximately 27,500 square meters thereof, which
portion, prior thereto, was in their possession as their share pursuant to a
partition agreed upon by the co-owners
thereof; and that since June 1953, the petitioner had been collecting rentals
from the owners of houses built thereon in the total sum of P300.00 a month.

In his answer, the
petitioner claimed that the heirs of Valentina Quiñones, with the exception of Restituta
and Ana Bocase, had already sold their rights over
the land covered by O.C.T. No. 0-13 to him as early as 1941 and 1950 either through themselves or their
successors in interest, thus making him the rightful and legal owner of
approximately 27,899 square meters thereof; that he had been in the peaceful, continuous and public
possession of the same; that there was no lien, encumbrance or adverse claim
annotated on O.C.T. No. 0-15 so that the series of sales made in his favor,
although not registered and annotated thereon, are valid and binding between
the parties, the said land not having passed to a third person; and that he had
spent no less than P5,000.00 in improving the land in question.

On October 31, 1960,
after hearing on the merits, the trial court rendered its decision ordering the
petitioner to vacate the land in question and to pay the respondents the sum of
P750.00, the value of the coconut trees the petitioner had ordered cut down;
P125.00 a month from July 10, 1958, representing the rentals collected by him
from tenants with their houses built on the questioned estate; P1,000.00 as
attorney’s fees; and costs.  The trial
court’s decision was anchored on the following rationale:  (a) to entertain petitioner’s claim that he
had bought the questioned portion of the land covered by O.C.T. No. 0-15 as
shown in evidence^[1] before the decree of registration was issued
would virtually re-open the cadastral proceeding in contravention of the indefeasiblity of Torrens titles; (b) the peti­tioner,
being the respondents’ counsel in the land registration case, had all the
opportunity to have the questioned deeds of sale annotated on the certi­ficate
of title in connection with the cadastral case but did not do so; (c)
petitioner’s failure, despite his having been respondents’ counsel, to have his
adverse claim brought to the attention of the cadastral court and to have the
supposed deeds of sale annotated later are proof enough that the alleged deeds
of sale were really contracts of loan.

In due course, the
petitioner appealed to the Court of Appeals claiming that the trial court erred
in its appreciation of the facts and the legal aspects of the case.  On August 22, 1968, the Court of Appeals
rendered its decision finding the petitioner’s claim “to the property in controversy untenable” and affirming, except for reducing to P550.00 the
value of the coconut trees the petitioner had to reimburse the respondents (it
was found that only 110 trees were felled at P5.00 per tree), the appealed judg­ment
of the trial court.  But, unlike the
trial court, the Court of Appeals did not resolve the question of whether the
alleged deeds of sale, supra, of the questioned land were bona fide
purchase agreements or mere
contracts of loan.  It simply noted that
“the alleged sales took place in 1940 or some years prior to the issuance
of the Original Certificate of Title No. 0-15 x x x but none of the alleged deeds of sale appears to have
been annotated on said certificate of title” and from that observation,
concluded that “Under the Torrens System of regis­tration, claims and
liens of whatever character, except those mentioned by law, existing against
the land prior to the issuance of the certificate of title, are cut off by such
certificate if not noted thereon, and the certificate so issued binds the whole
world, including the government.”

The petitioner in the
instant petition raises two issues, namely, (1) whether the existence of a
decree of registration is a bar to an action filed after one year from the
issuance of the decree to compel reconveyance of the
property in question, and (2) whether the alleged unrecorded deeds of sale
between the parties are binding upon them and their respective heirs.

1. Contrary to the opinion entertained by the courts below,
the prevailing rule in this juris­diction does not bar a landowner whose
property was wrongfully or erroneously registered under the Torrens
system from bringing an action, after one year from the issuance of the decree,
for the reconveyance of the property in question.^[2]
Such an action does not aim or purport to re-open the registration proceeding
and set aside the decree of registration, but only to show that the person who
secured the registration of the questioned property is not the real owner
thereof.

2. Even if the contracts executed by the respondents and
their predecessors over the land in question in favor of the petitioner were
genuine and bona fide purchase covenants, the same, however, lost
their efficacy upon the rendition of judgment and issuance of the decree of
registration in favor of the respondents. 
A cadastral case is a judicial proceeding in rem
which, as such, binds the whole world.^[3]
The final judgment rendered therein is deemed to have settled the status of the
land subject thereof and, therefore, all rights or claims prior thereto, if not
noted thereon, like those of the petitioner, are deemed barred under the
principle of res judicata.

In the case at bar, the record sufficiently shows that the
petitioner was well aware of the existence of the cadastral case over the land
in question as he was engaged by the respondents to handle the case for them
although it was another lawyer, Atty. Suazo, who
appears to have actually assisted the respondents in court.  Indeed, it incontrovertibly appears that
Atty. Suazo delivered the certificate of title to the
petitioner after the same was issued, and the petitioner remained in possession
thereof until the complaint was filed and the case was tried in the court a
quo.  Petitioner’s actuation,
himself a lawyer, under the circumstances, in not having the alleged deeds of
sale annotated in the certificate of title, if they were really sale covenants,
is certainly inexplicable.

Upon the foregoing, the conclusion of the trial court that the
deeds of sale in question were mere contracts of loan, or properly speaking, a
security arrangement, is not far-fetched. 
This Court takes cognizance of the common practice of individual money
lenders of taking physical possession of the certificate of title or other
documents evidencing ownership of real estate by the debtor to ensure his
faithful compliance with the obligation to pay the loan.

ACCORDINGLY, the decision of the Court of Appeals in
CA-G.R. No. 30053-R is hereby affirmed.

No costs.

Makasiar, Muñoz
Palma, Martin, Fernandez, and Guerrero,
JJ., concur.

Teehankee, J., brief concurring opinion.

^[1]
This consists of several notarial deeds of sale, to
wit, (a) Exh. “5” dated Aug. 5, 1940 signed
by Eugenio, Pedro, Bernardo, Gregoria
and Simplicia Bocase with
the conformity of their spouses, covering 5,577 square meters; (b) Exh. “6” dated Aug. 15, 1940 signed by Felix Bocase with the consent of his wife, covering 5,578 square
meters; (c) Exh. “7” dated Aug. 9, 1940
signed by Pedro Omega and his wife Gregoria Bocase and Eugenio Bocase and his wife, covering 5,576 square meters wherein
the vendors alleged that they bought the same from Maximina Bocase; (d) Exh.
“8” dated July 27, 1940
signed by Sabina Toreno, together with her then
living sister Florencia Toreno,
and their spouses, certifying that on June
29, 1939 their mother Maximina executed a
deed of sale (Exh. “8-a”) of her interest
over the land in question, as heir of Valentina Quiñones, in favor of Pedro Omega and Eugenio
Bocase; (e) Exh.
“10” dated Feb. 18, 1941
signed by Petra Bocase, covering 5,580 square meters;
and (f) Exh. “11” containing no date and
not notarized, signed by Eugenia Bocase and her
husband, covering 5,576 square meters.

^[2]
Quiñiano vs. CA, L-23024, May 31, 1971, 39 SCRA 221 and cases cited therein.

^[3]
Nieto vs. Quines, L-14643, Sept. 29, 1962, 6 SCRA 74.  See Cano vs. De Camacho, L-28172, Feb. 29, 1972, 43 SCRA 390, wherein
the claim of acquisitive prescription previous to the issuance of the decree of
registration was not sustained.

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