MELITON GALLARDO AND TERESA VILLANUEVA, PETITIONERS, VS. HONORABLE INTERMEDIATE APPELLATE COURT, MARTA VILLANUEVA VDA. DE AGANA, VISITACION AGANA KIPPING, PEDRO V. AGANA, MARCEL…

Gallardo versus Villanueva

The Case

This is a petition for review on certiorari brought by Meliton Gallardo and Teresa Villanueva against Marta Villanueva vda. de Agana and her co-respondents. The petitioners sought to set aside the decision of the Intermediate Appellate Court, which had affirmed the trial court's dismissal of their complaint for quieting of title. The case matters because it gathers in one decision the rules on the form required for conveying registered land, the imprescriptibility of registered title, and the doctrine of laches as between near relatives. It is a compact review of the Torrens system's protective armor.

Procedural History

The petitioners filed a complaint for quieting of title and damages before the Court of First Instance of Laguna, which rendered judgment on January 20, 1982 in favor of the defendants. The trial court declared the private deed of sale of August 10, 1937 void, declared the petitioners' reconstituted Transfer Certificate of Title No. RT-6293 (No. 23350) void, ordered the Register of Deeds to issue a new reconstituted title or to reinstate Original Certificate of Title No. 2262 in the name of Pedro Villanueva, declared the heirs of Pedro Villanueva as owners, ordered the petitioners to vacate and surrender possession, declared the improvements forfeited in favor of the defendants, and awarded moral and exemplary damages, attorney's fees, litigation expenses, and costs.

The petitioners filed a notice of appeal on February 10, 1982 and appealed to the Intermediate Appellate Court, which on May 22, 1984 affirmed the trial court's decision in all its parts. Hence, this petition for review on certiorari. The Supreme Court required the respondents to comment, later treated the comment as an answer, gave due course to the petition, and required the parties to submit their respective memoranda. The case was submitted for deliberation on July 1, 1985.

Facts

The land, situated in Cavinti, Laguna and consisting of 83,300 square meters more or less, was originally covered by Original Certificate of Title No. 2262, issued on April 2, 1924 in the name of the late Pedro Villanueva, a former justice of the peace. The petitioners were his nephew and niece, and the private respondent Marta Villanueva vda. de Agana was his daughter.

On August 10, 1937, the petitioners claim that Pedro Villanueva sold the land to them by a private, unnotarized deed of sale written in Tagalog for 500 pesos. On the strength of that private document, the original certificate of title was cancelled and Transfer Certificate of Title No. RT-6293 (No. 23350) was issued in the petitioners' names on January 4, 1944. During the Second World War, the records and the Office of the Register of Deeds of Laguna were completely burned. By virtue of an Affidavit of Reconstitution dated December 2, 1958, and upon presentation of the owner's duplicate certificate, the title was administratively reconstituted in the petitioners' names.

In November 1976, Marta Villanueva and two others filed an Affidavit of Adverse Claim, although the two later withdrew theirs. Attempts at amicable settlement failed. On December 9, 1976, Marta executed a Deed of Conveyance and Release of Claim, but she refused to sign an affidavit of quitclaim. The petitioners then sued. At trial, Teresa Villanueva testified that she knew nothing of the reconstitution, that their children took charge of it, and that she never appeared before a notary public. The trial court found that the private document was signed by somebody else, not by Pedro Villanueva.

Issues

• Whether or not the unnotarized deed of sale of August 10, 1937 is a valid instrument for conveying land registered under the Torrens system.
• Whether or not there was a valid reconstitution of Transfer Certificate of Title No. RT-6293 (No. 23350).
• Whether or not the petitioners acquired ownership of the registered land by prescription or adverse possession.
• Whether or not the private respondents are barred by laches from asserting their rights.

Applicable Provisions

Section 127 of the Land Registration Act, Act 496, provides:

Section 127. Deeds of Conveyance, effecting lands, whether registered under this act or unregistered shall be sufficient in law when made substantially in accordance with the following forms, and shall be as effective to convey, encumber, or bind the lands as though made in accordance with the more prolix forms heretofore in use: Provided, That every such instrument shall be signed by the person or persons executing the same, in the presence of two witnesses, who shall sign the instrument as witnesses to the execution thereof, and shall be acknowledged to be his or their free act and deed by the person or persons executing the same, before the judge of a court of record, or clerk of a court of record, or a notary public, or a justice of the peace, who shall certify to such acknowledgment substantially in the form next hereinafter stated.

This provision requires acknowledgment before a public officer, and the unnotarized deed of sale failed to comply with it.

Article 1356 of the Civil Code provides:

Contracts shall be obligatory, in whatever form they may have been entered into, provided all the essential requisites for their validity are present. However, when the law requires that a contract be in some form in order that it may be valid or enforceable, or that a contract be proved in a certain way, that requirement is absolute and indispensable.

The Court held that the second sentence supplies the exception, and the law requiring a public form for the conveyance of registered land is Section 127 of Act 496.

Ruling

On the first issue, the Court held that the private deed of sale is not a valid instrument for conveying registered land. A private conveyance is valid as between the parties, but the vendee's only right is to compel the vendor, through court processes, to execute a deed of conveyance sufficient in law for purposes of registration. The Court quoted the appellate court's reasoning that the general rule in Article 1356 yields to the exception, and that the law requiring a public form is Section 127 of Act 496. The Register of Deeds acted without authority in registering the private deed, and that act lent no validity to the defective document. The Court also cited Pornellosa versus Land Tenure Administration, holding that acts and contracts creating, transmitting, modifying, or extinguishing real rights over immovable property must appear in a public document.

On the second issue, the Court held that there was no valid reconstitution. The reconstitution rested either on the affidavit of Teresa Villanueva, who testified that she never participated in it and never appeared before a notary public, or on the void private deed of sale. The transfer certificate of title was therefore void from the beginning.

On the third issue, the Court held that prescription and adverse possession do not run against registered land. No title to registered land in derogation of that of the registered owner may be acquired by prescription or adverse possession. The right to recover possession of registered land is imprescriptible because possession is a mere consequence of ownership, and the efficacy and integrity of the Torrens system must be protected.

On the fourth issue, the Court held that laches did not bar the private respondents. The doctrine of laches is not strictly applied between near relatives, and the ties of blood and marriage tend to excuse an otherwise unreasonable delay. Delay is counted from the time the complainant knew of the occupancy. The reconstitution was administrative, essentially ex parte and without notice, so Marta Agana could not be said to have slept on her rights; she filed her adverse claim upon discovering the reconstitution in 1976.

Doctrine

A private deed of sale over registered land does not convey title. Under Section 127 of Act 496, now Section 112 of Presidential Decree No. 1529, the instrument must be signed in the presence of two witnesses and acknowledged before a judge, clerk of court, notary public, or justice of the peace. Until then, the vendee's remedy is to compel the execution of a registerable deed. Registration of a private deed by the Register of Deeds is unauthorized and adds nothing to its validity.

No title to registered land in derogation of that of the registered owner may be acquired by prescription or adverse possession, and this rule binds the registered owner's hereditary successors as well. Laches is not strictly applied between near relatives, and delay is counted from the time the complainant had knowledge of the adverse conduct, not from the date of the sale.

Disposition

The petition was denied and the assailed decision of the Intermediate Appellate Court was affirmed, with costs against the petitioners.

Remember This

Memorize the line: a private deed of sale over registered land is valid between the parties but conveys no title, for the law demands a public instrument acknowledged before a notary or other officer named in Section 127 of the Land Registration Act. Examiners use this case to test the form of conveyances of registered land, the imprescriptibility of Torrens title, and the relaxed application of laches among relatives.