VIRGINIA CALALANG, PETITIONER, VS. REGISTER OF DEEDS OF QUEZON CITY, ADMINISTRATOR OF NATIONAL LAND TITLES AND DEEDS REGISTRATION, LUCIA DE LA CRUZ, CONSTANCIO SIMANGAN, AND IGL…

SEPARATE OPINION

DAVIDE, JR., J.:

Although I originally voted with the majority in the challenged
Decision of 22 April 1992, in the light of the clearer presentation of the
procedural and factual antecedents by the parties in the motion for reconsideration
and the opposition thereto and the pleadings they thereafter filed, as well as
in their expositions during the oral arguments on the said motion and
opposition, I am convinced that cogent reasons exist for the reconsideration of
the challenged decision and the rendition of another dismissing, nevertheless,
these petitions on other grounds.

Lot No. 671 of the Piedad Estate, with an area of 184,268 sq.
meters, was originally registered in the name of the Philippine Government
which was issued Original Certificate of Title No. 614. Although Lot No. 671 was in the possession
of Policarpio de la Cruz who was given priority or preference in its
acquisition, it appears that he sold it to Eugenia de la Paz and Dorotea de la
Cruz as evidenced by Entry No. 3241; accordingly, a new title, Transfer
Certificate of Title (TCT) No.
40355, was issued to the said vendees.

On 29 November 1941, Dorotea and Eugenia sold Lot No. 671 to
Lucia de la Cruz. Although Lucia appears to have filed
with the Office of the Register of Deeds on 17 July 1943 the deed of sale in
her favor, which was entered as Entry No. 258 on 17 July 1943 as shown on page 7, volume 7, Primary
Entry Book of the Registry of Deeds of Manila, there is no showing at all that
she also presented to the Register of Deeds the owner’s duplicate copy of TCT
No. 40355. On the contrary, the said
owner’s copy of the title remained in the possession of the vendors, Eugenia
and Dorotea, because their deed of sale in
favor of Amando Clemente for P178,556.40 of a portion of Lot No. 671,
described as Lot No. 671-A with an area of 81,160 sq. meters, is the last
inscription in the series of
transactions annotated at the back of TCT No. 40355.

As a consequence of the registration of the deed of sale in favor
of Clemente, and considering that Eugenia
and Dorotea had earlier subdivided Lot No. 671 into Lot No. 671-A and Lot No. 671-B with the latter having an
area of 103,108 sq. meters, TCT No. 40355 was cancelled and TCT No. 16212 and
TCT No. 16213 were issued for Lot No. 671-A and Lot No. 671-B,
respectively. Lot No. 671-B was later sold by Eugenia and Dorotea
to Narcisa de Leon, as a
consequence of which TCT No. 16213 was cancelled and a new TCT No. 2009 was issued to the
vendee. On 6 May 1964, Narcisa de Leon sold Lot No. 671-B to
Nieves Paz Ereña to whom was issued TCT No. 79971. The latter’s action to quiet title against Lucia de la Cruz ended
in a compromise settlement under which Lucia paid Nieves the sum of P25,000.00.

Amando Clemente further subdivided Lot No. 671-A and sold the
subdivided lots in 1952 to various vendees, among whom are the petitioners.

In 1971, Lucia de la Cruz obtained a reconstituted title, RT-58,
over Lot No. 671. She then sub-divided
the lot into Lot No. 671-A with an area of 30,000 sq. meters, Lot No. 671-B
with an area of 4,268 sq. meters, and Lot No. 671-C with an area of 150,000 sq.
meters, as a consequence of which TCT Nos. 168320, 168321, and 168322 were
issued for the subdivided lots, respectively. On 17 July 1975, Lucia de la Cruz sold to the Iglesia Ni Kristo (INK) a
portion of Lot No. 671-C with an area of 103,108 sq. meters. Another deed of sale was executed by Lucia
in favor of the INK for the remaining 84,356 sq. meters and the transaction was
annotated in TCT No. 168322.

From the foregoing it would thus appear that there was a double sale of Lot No. 671 by Eugenia and Dorotea, first to
Lucia de la Cruz and then to Amando Clemente (Lot No. 671-A) and Narcisa de
Leon (Lot No. 671-B). The rights then
of the two sets of vendees would be determined pursuant to Article 1544 of the
Civil Code which reads:

“ART. 1544. If the same thing should have been
sold to different vendees, the ownership shall be transferred to the person who
may have first taken possession thereof in good faith, if it should be movable
property.

Should it be immovable property, the ownership shall belong to the
person acquiring it who in good faith first recorded it in the Registry of
Property.

Should there be no inscription, the ownership shall pertain to the
person who in good faith was first in the possession; and in the absence
thereof, to the person who presents the oldest title, provided there is good
faith.”

It may be presumed that
both sets of vendees were in good faith in the purchase of the
immovable in question. As to who of them first registered the sale
in the Registry of Deeds is the more crucial issue. Although there is evidence that the sale in favor of Lucia de la
Cruz was entered in the primary entry book of the Registry of Deeds of Manila on
17 July 1943, the owner’s copy of TCT No. 40355 was not presented to the said
office. For that reason, the sale was
not annotated on TCT No. 40355 and, thus, no new TCT was issued to Lucia.

The rule in this jurisdiction under the Land Registration Act (Act
No. 496) is that in voluntary dealings with registered lands, the mere entry of the document
(e.g., deed of sale) does not operate to convey and affect the land sold
unless the owner’s duplicate copy of the certificate of title is surrendered
and the fees paid. Expounding thereon, in Villasor
vs. Camon (89 Phil. 404, 407–412
[1951]), this Court, through Mr. Justice Felicisimo Feria, made the following enlightening
disquisition on this rule and its non-applicability to involuntary dealings
with registered lands:

“(a) The question raised in the third assignment of error which we
have to decide, is whether the mere registration by the Register of Deeds in
the entry or diary book of the exhibit “A”
in which the defendant Camon sold or assigned all his rights and
interests in the lot in question, without the presentation of the duplicate
certificate of the owner for the annotation of such assignment thereon and on
the original certificate, had the effect of a conveyance of the said lot to the
plaintiff and a notice thereof to all other persons from the time of such registering, filing, or entering, under
Sections 50 and 51 of Act No. 496. These two sections provide only for the effect of registration of deeds,
mortgage, lease or other voluntary conveyance, as well as of lien, attachment,
notice of lis pendens and
other involuntary instruments on registered land. But they do not provide for the requisites or conditions for such
registration in order to have that effect, which is provided for in the
subsequent sections of the same Act, which we shall quote later on in their
proper places depending upon whether the instrument to be registered is
voluntary or involuntary one.

A cursory examination of the provisions of Sections 52, 57, 61, and
64 of Act No. 496 and the decisions of this Court in the cases of Fidelity and
Surety Co. vs. Pastora Conegero, 41 Phil.,
396; Director of Lands vs. Addison, 49 Phil., 19; and Philippine National Bank vs. Fernandez, 61 Phil.,
448, clearly show that the answers to said questions must be in the
negative. That is, that
for the registration of voluntary instruments,
such as the one under consideration, it
is necessary, not only to register the
deed, instrument of assignment, mortgage, or
lease in the entry book of the
Register of Deeds, but a memorandum thereof
shall also be made by the Register
of Deeds on the owner’s duplicate certificate
and its original.

‘Section 52 provides that “all interests in registered land less
than an estate in fee simple shall be registered by filing with the register of
deeds the instrument creating or transferring or claiming such interest and by
a brief memorandum thereof made by the register of deeds upon the certificate
of title, signed by him. A similar
memorandum shall also be made on the owner’s duplicate. The cancellation or extinguishment of such
interests shall be registered in the same manner.”

Section 57 prescribes that “An owner desiring to convey in fee
his registered land or any portion thereof shall execute a deed of conveyance,
which the grantor or grantee may present to the register of deeds in the
province where the land lies. The
grantor’s duplicate certificate shall be produced and presented at the same
time. * * * The register of deeds shall
note upon the original and duplicate certificates the date of transfer, the
volume and page of the registration book where the new certificate is
registered, and a reference by number to the last prior certificate.”

Section 61 provides that
“Registration of a mortgage shall be made in the manner following, to
wit: The owner’s duplicate certificate
shall be presented to the register of deeds with the mortgage deed, and he
shall enter upon the original certificate of title and also upon the owner’s
duplicate certificate a memorandum of the purport of the mortgage deed, the
time of filing and the file number of the deed, and shall sign the
memorandum.”

Section 64 prescribes that “Lease of registered land shall be
registered in the manner provided in section fifty-two of this Act, in Lieu of
recording.”

This Supreme Court in the case of Fidelity and Surety Co., vs.
Pastora Conegero, 41 Phil., 401, held that ‘The steps by which registration is
accomplished are fully set out in section 57 of the same Act; and by reference
thereto, it will be seen that registration of the transfer of registered land
depends upon several vital conditions, among which is the requirement that the
grantor’s duplicate certificate, upon which the title is founded, shall be
produced before the register of deeds for cancellation; and that he shall also
have before him the original certificate, likewise to be cancelled. This prerequisite condition was not complied
with when the deed to Thomas was presented for registration. On the other hand, the conveyance of the
land covered by certificate No. 194, by way of mortgage to the Fidelity and
Surety Company, was effected in compliance with all legal requirements. As a consequence it must be held that the
title acquired by the Fidelity and Surety Company is superior to that acquired
by Samuel Thomas.’

In the case of the Director of Lands vs. Addison, 49 Phil., 19, 26,
it was held that ‘In fact the register of deeds has no authority to register a
conveyance in fee without the presentation of the conveyor’s duplicate
certificate unless he is ordered to do so by a court of competent jurisdiction (see Land Registration Act, section
55).’

And in the case of Philippine National Bank vs. Fernandez, 61
Phil., 448, this Supreme Court ruled that, ‘As to the share of Leonor Villaranda, appellant’s deed
from her could not prejudice third persons, because it was not registered on
transfer certificate of title No. 2207 in the office of the register of deeds,
and the reason therefor was the failure of the appellant to present the owner’s
duplicate of said certificate to the register of deeds, as required by section
55 of Act No. 496. The appellant did
not therefore acquire any right to the issuance of a new transfer certificate
of title in his favor with respect to the interest of Leonor Villaranda
(Fidelity and Surety Co. vs. Conegero Vda. de Lizarraga, 41 Phil., 396;
Director of Lands vs. Addison, 49 Phil., 19).’

Niblack, in his well known book ‘An Analysis of the Torrens System
of Conveying Land’, has the following to say on the necessity of producing the
certificate of title:

‘Production of Certificate of Title with Instrument Affecting
Title. — Under the scheme of the
Torrens system, and as a protection to the registered owner, the certificate of
title must be produced with any voluntary instrument purporting to affect the
title. In some acts it is expressly
provided that no new certificate of title shall be entered, and no memorandum
shall be made upon the register by the registrar, in pursuance of any voluntary
instrument, unless the owner’s duplicate certificate is presented with such
instrument, except in cases specifically provided for in the act, or upon the
order of a court for cause shown. The
other acts in this country provide that on the filing of such instrument and
the production of the owner’s duplicate certificate, the transfer or memorial
may be registered. It is evident that
under these acts the registrar has no authority to make registration without
the production of the certificate of title with the voluntary instrument. Where there is no specific provision in an
act that the production of the owner’s duplicate certificate is to be a
condition precedent to the right of the registrar to make a registration or a
memorial, such provision may be inferred from the other requirements or
statements of the act. A requirement
that the owner’s certificate shall be cancelled when a new registration is
made, or that a memorial, when registered, shall be noted on the duplicate
certificate, is an implication that the owner’s duplicate must be presented
before a new registration may be made.’ (Italics ours.)

The appellant cannot invoke in support of her contention the ruling
laid down in the case of Government of the Philippine Islands vs. Aballe, 60
Phil. 986, which was followed in Director of Lands vs. Abad, 61 Phil., 479, to
the effect that an attachment entered upon the entry book is duly registered
although the duplicate certificate is not presented at the time of registration
to the register of deeds. Appellant
cannot invoke said ruling, not because it has been abandoned by the Supreme
Court during the Japanese occupation in the case of Bass vs. De la Rama, et
al., (1, Off. Gaz., [12] p. 889), in which it was said that ‘we are constrained
to abandon the ruling in said two cases,’ — it was not abandoned for the
decision was concurred by only two justices or less than a majority, and said
statement was not necessary or an obiter dictum and
against the law, as correctly stated by the two associate justices who
dissented and only concurred in the result, but because said ruling, subsisting
and in force, does not support appellant’s contention, for it is only
applicable to registration of involuntary instruments, such as attachment, or
other liens and adverse claims of any description. This ruling is correct or in conformity with the provisions of
section 72 of Act No. 496, which do not require the production by the
registrant of the duplicate certificate of the land to be affected, and was
also followed in the case of National Bank vs. Fernandez quoted supra,
in which this Supreme Court in passing upon the second ground of appellant’s
contention, held the following:’

x        x          x

The reason for the difference between the conditions required for
the registration of a voluntary and that of an involuntary instrument, is
obvious. The law requires the
production of the owner’s duplicate certificate by the registrant by a
voluntary instrument together with the deed or instrument to be registered,
because as a voluntary instrument is a willful act of the registered owner of
the land to be affected by the registration, it is to be presumed that he is
interested in registering the instrument, and would willingly surrender,
present or produce his duplicate certificate of title to the register of deeds
in order to accomplish such registration. And this is the reason why the second paragraph of Section 55 provides
that ‘The production of the owner’s duplicate certificate whenever any
voluntary instrument is presented for registration shall be conclusive
authority from the registered owner to the register of deeds to enter a new
certificate or to make a memorandum of registration in accordance with such
instrument.’

But in case of involuntary instrument such as an attachment, or
other lien or adverse claim of any description, as the registration thereof is
contrary to the interests of the registered owner or will affect him adversely,
it is but natural that he will not willingly present or produce his duplicate
certificate or at least delay his production as long as possible. For that reason, the law does not require
its presentation together with the involuntary instrument, as in the case of
voluntary instrument, and considers the annotation of such instrument upon the
entry book as sufficient to affect the real estate to which it relates; x x x.” (underscoring supplied)

In Levin vs. Bass (91 Phil. 419 [1952]), this Court, per Mr. Justice Sabino Padilla, elucidated again on
the requirements of effective registration in voluntary dealings of registered
land:

“We now take up the question between Eugenio Mintu and Rebecca
Levin. Under the Torrens system the act
of registration is the operative act to convey and affect the land. [Sec. 50,
Act. 496]. Do the entry in the day book of a deed of sale which was
presented and filed together with the owner’s duplicate certificate of title
with the office of the Registrar of Deeds and full payment of registration fees
constitute a complete act of registration which operates to convey and affect
the land? In voluntary registration,
such as a sale, mortgage, lease and
the like, if the owner’s duplicate certificate
be not surrendered and presented or if
no payment of registration fees be made
within 15 days, entry in the day
book of the deed of sale does not
operate to convey and affect
the land sold. [Sections 55 and 56,
Act 496]. In involuntary registration, such as an
attachment, levy upon execution, lis pendens and the like, entry thereof in the day book is a sufficient notice to
all persons of such adverse claim. [Villasor vs. Camon, et al., 89 Phil.,
404]. x x x” (underscoring
supplied)

Villasor was reiterated in Barreto vs. Arevalo (99 Phil. 771, 777-778 [1956]) where this Court, per Mr. Justice
Alejo Labrador, stated:

“The fourth assignment of error has reference to the holding
of the trial court that the registration of plaintiff’s deed of sale is
incomplete and cannot prevail over the rights of defendants who had secured
registration of the deed of sale in their favor and the issuance of a
certificate of title in their name. The
above conclusion is also correct. In
the first place, the act of registration is the operative act to convey and
affect the land, an unregistered deed only operating as a contract between the
parties and as evidence of authority to the register of deeds to make
registration (Sec. 50, Land Registration Act.) The registration of defendants
Padillas’ deed affected the land
conveying title thereto to them, as in fact a new certificate of title was
issued in their favor. As to
plaintiff’s deed of sale, as to which
registration is voluntary, not involuntary, its
presentation and entry in the day book
without surrender of the title, did not
operate to convey and affect the land
sold or conveyed (Villasor vs. Cammon, et al., CA. G.R. No. 8551, prom. June 29, 1951).”
(underscoring supplied)

To recapitulate,
since Lucia de la Cruz was not able to present
to the Register of Deeds the owner’s duplicate copy of TCT No. 40355 which had
all the time remained in the possession of her vendors until it
was cancelled upon the registration of the deed of sale in favor of Amando
Clemente, she cannot claim any better right to the property against
the second vendees simply because she was the first to present her deed of sale
to the Register of Deeds. On the other
hand, Clemente registered the deed of sale in his favor in August of 1951 or twenty
(20) years before Lucia de la Cruz secured a reconstituted title over
Lot No. 671. The compromise agreement
between Ereña and Lucia de la Cruz under which the latter had to pay the
former P250,000.00 for Lot No. 671-B with an area of 103,108 sq. meters, which
is the very same area Lucia sold to INK on 17 July 1975, is further proof that
Lucia had a weak claim over the property. If it were otherwise, she would not have parted with P250,000.00 to reacquire it. That was not at all a picayune sum.

Consequently, the second paragraph of Article 1544 of the Civil
Code does not help the cause of Lucia de la Cruz.

Even granting that the claim of Lucia de la Cruz should prevail
over that of Clemente by reason of the prior registration in good faith of the
deed of sale in her favor, the fact remains that at the time she sold the
103,108 sq. meters and then later the remaining 84,356 sq. meters to the INK,
the portion acquired earlier by Clemente had already been sold to different
vendees to whom separate TCTs were regularly issued. These facts were readily available to the INK from the Office of
the Register of Deeds of Quezon City which kept the original copies of the TCTs
issued to the vendees of
Clemente. It is interesting to note
that the sale in favor of the INK over the remaining 84,346 sq. meters was
annotated only in TCT No. 168322 for Lot No. 671-C. Such a sale could logically cover the lot purchased by Clemente
because the earlier sale to INK of 103,108
sq. meters was taken from Lot No. 671-C which has an area of 150,000 sq. meters. It is then equally clear that the registration of the deeds of
sale in favor of the INK were also posterior to that of the vendees of
Clemente. As to who acted in good faith
— whether the INK or the said vendees — is a question which should be threshed
out in an appropriate action or proceeding.

Additionally, the petitioners claim that they are in possession
of the property. The INK does not
vehemently deny this claim. In any
case, the issue of possession is thus raised, a crucial one in double sale.

It has also been shown that the petitioners were not parties in De la Cruz vs. de la Cruz (130 SCRA 666 [1984). I fully agree with Madame Justice
Flerida Ruth P. Romero that the
said case cannot operate as res judicata against
them.

All the foregoing factual issues related to double sale must have
to be resolved in an appropriate proceeding before a proper court.

ACCORDINGLY,
I vote to grant the Motion for
Reconsideration and set aside the challenged Decision of 22 April 1992, but to dismiss these cases
without prejudice on the part of the petitioner in G.R. No. 76265 to institute the
appropriate
action to protect her rights and on the part of the petitioners in G.R.
No. 83280 to prove their priority of rights in Civil Case No. Q-­49900.

CONCURRING AND DISSENTING OPINION

QUIASON, J.:

I concur with the Resolution insofar as it dismisses the petition
in G.R. No. 76265 and denies the petition in G.R. No. 83280. My reason is that the basic issue — which
of the conflicting duplicate transfer certificates of title shall prevail —
could not be raised, entertained and resolved in the proceedings (LRC 1978 and
Civil Case No. 45767 of RTC, Branch 101, Quezon City) subject of the petitions.

The conflicting transfer certificates of title are TCT No. 16212
issued to Armando Clemente on August 9, 1951 and TCT No. RT-59 (purported to be
a replacement of TCT No. 40355) issued to Lucia de la Cruz in 1971 after a reconstitution proceeding. Both duplicate transfer certificates of
title trace their progeny from TCT No. 40355, which was issued in the names of
Eugenia de la Paz and Dorotea de la Cruz in 1940.

G.R. No. 76265 is a petition for certiorari and
prohibition under Rule 65 of the Revised Rules of Court to reverse and set
aside the decision of the Administrator of the National Land Titles and Deeds
Registration Administration (NLTDRA) in Consulta Case LRC 1978. As held by the NLTDRA Administrator himself,
he could not accede to petitioner’s request for an investigation of the
supposed anomaly in connection with the reconstitution of TCT No. RT-­59
because the issue raised by petitioner was litigious in nature and cannot be
decided in the consulta case. The Court agreed with the NLTDRA Administrator when he stated:

“Undeniably, the arguments and issues raised by petitioner
require adjudication of facts which, under the circumstances of this case, we
are not prepared to do so as this Court is not a trier of facts. Moreover, the present petition is not the
proper remedy in challenging the validity of certificates of titles since the
judicial action is a direct and not a collateral attack” (208 SCRA 229,
244).

G.R. No. 83280 is a petition for review on certiorari
under Rule 45 of the Revised Rules of Court to reverse and set aside the
decision of the Court of Appeals (CA-G.R. SP No. 08146), affirming the
dismissal of petitioners’ complaint to enjoin private respondent Iglesia Ni
Kristo from fencing the lots bought by petitioners from Armando Clemente. The Court quoted with approval the holding
in Natalia Realty Corporation v. Vallez, 173
SCRA 534 (1989), that a certificate of title cannot be questioned collaterally
since Section 48 of the Property Registration Decree provides that such title
can be altered, modified or cancelled only in a direct proceeding in accordance
with law (208 SCRA 229, 244).

I dissent insofar as the Resolution holds that the issue of the
ownership of the title to the lots in question had been conclusively adjudged
in favor of Lucia de la Cruz in De la Cruz v. De
la Cruz, 130 SCRA 666 (1984) and could no longer be relitigated
under the principle of res judicata.

Res judicata does not apply because there are no
identity of parties and no identity of causes of action, both being
indispensable requisites before said principle becomes operative (Abes v.
Rodil, 17 SCRA 822 [1966]).

In 61969, the petitioners, who were the plaintiffs in Civil Case
No. 20942 of the Court of First Instance of Rizal, were Augustina de la Cruz
and the other heirs of Policarpio de la Cruz and Luciana Rafael; while the
respondents, who were the defendants in said civil case, were Lucia de la Cruz
and the Iglesia Ni Kristo.

In G.R. No. 76265, the party who sought to nullify the titles of
respondents Lucia de la Cruz and the Iglesia Ni Kristo was petitioner Virginia
Calalang. The latter is not a privy of
Augustina de la Cruz nor is she an heir of Policarpio de la Cruz and Luciana
Rafael. Neither are petitioners Augusto
M. de Leon, et al., in G.R. No. 83280 privies of Augustina de la Cruz nor heirs
of Policarpio de la Cruz and Luciana Rafael.

The plaintiffs in Civil Case No. 20942 of the Court of First
Instance of Rizal and petitioners in L-61969 brought the action as heirs of Policarpio de la Cruz and
Luciana Rafael to demand their rightful share in the inheritance allegedly
usurped by Lucia de la Cruz.

The petitioners in G.R. Nos. 76265 and 83280 claim to have
derived their titles from Armando Clemente, who in turn derived his title from
Eugenia de la Cruz and Dorotea de la Cruz. The principle action was to enjoin the Iglesia Ni Kristo from fencing
the lots occupied by the plaintiffs, the declaration of who of the parties had
a superior title being incidental.

I wonder no end how the Court arrived at its conclusion that
“the petitioners can not raise anew the question of ownership of Lucia de
la Cruz over lot 671 which had been determined by the Court of Appeals and
affirmed by the Supreme Court in the de la Cruz Case,” after it
acknowledged that a judicial determination of a right or fact (citing Church
Assistance Program, Inc. v. Sibulo, 171 SCRA 408 [1989]) is conclusive only
“upon the parties and those in privity with them in law or estate”
(208 SCRA 224, 225).

I can not accept the assertion of the Court that the De la
Cruz decision should be applied to the
present cases “since the facts on which such decision was predicated
continue to be the facts of the case before us now,” after it admitted
that it could not pass upon the controversial facts raised by petitioners (supra, pp. 225 and 229).

It is markworthy that there was
no mention in the De la Cruz decision of the cancellation
of TCT No. 40355 and the issuance of a new transfer certificate of title in
favor of Armando Clemente on August 9, 1951. Such vital facts were never brought to the attention of the Court in the
De la Cruz case;
otherwise, the Court could have made a determination of which certificate of
title shall prevail – the title issued in 1951 to Armando Clemente or the one
issued in 1971 to Lucia de la Cruz.

Indeed, there are so many other factual questions that have just
been glossed over due to the facile application of the principle of res judicata
in the Decision sought to be reconsidered and in the Resolution denying the
motion for reconsideration.

We shall mention only the most intriguing ones:

(1) If the parcel of land in question was in the possession of
Policarpio de la Cruz and Luciana Rafael, why was it registered under the
Torrens system on April 25, 1940 in the names of Eugenia de la Paz and Dorotea
de la Cruz?

(2) Who were Eugenia de la Paz and Dorotea de la Cruz?

(3) Why did Augustina de la Cruz claim title from Policarpio de la
Cruz and Luciana Rafael and not from Eugenia de la Paz and Dorotea de la Cruz?

(4) If Lucia de la Cruz bought the parcel of land covered by TCT
No. 40355 from Eugenia de la Cruz and Dorotea de la Cruz in 1941, did the
vendors deliver to her the corresponding transfer certificate of title?

(5) If the transfer certificate of title was delivered to Lucia de
la Cruz, did she surrender the title to the Register of Deeds when she
registered the deed of sale in her favor on July 15, 1943?

(6) If she surrendered the transfer certificate of title, did the
Register of Deeds cancel the original transfer certificate of title and issue a
new transfer certificate of title to her?

(7) Why was the proceeding instituted by Lucia de la Cruz in 1971
for the reconstitution of TCT No. 40355, if the parcel of land covered by such
title had already been transferred to her in 1941?

(8) Why was the transfer certificate of title issued to Armando
Clemente in 1951 derived from TCT No. 40355 if the said title had been
cancelled in 1943?

(9) Were the lot buyers from Armando Clemente notified of the
reconstitution proceedings instituted by Lucia de la Cruz in 1971?

All of these factual issues, and many more, have to be threshed
out in the appropriate case before we can decide which of the conflicting
transfer certificate of title shall prevail.

DISSENTING OPINION

ROMERO, J.:

In this motion for reconsideration filed by petitioners, we are
again called upon to take a second look at our decision in Calalang v.
Register of Deeds of Quezon City
dated April 22, 1992,1 which
dismissed petitioners’ action for lack of merit. In said decision, we re-applied the facts as settled in the
earlier De la Cruz v. De la Cruz
case dated July 25, 19842 since the
facts of the latter case continue to be the facts before us now.

On May 13, 1992, petitioners filed the instant motion for
reconsideration with the prayer that they be heard en banc. After requiring respondents to comment, we
granted petitioner’s prayer for oral argument before the Third Division and set
the hearing on October 12, 1992. After
hearing the arguments of all the parties, the Third Division resolved to
require petitioners and respondent to file their respective memoranda.3 Subsequently, on February 10, 1993, the instant
case was referred by the Third Division to the Court en banc;4 having been accepted by the Court en banc,
the case became an en banc one.

Before we proceed to a re-examination of our decision, I wish to
reiterate that the instant case was accepted by the Court en banc
because it is high time that the Court, sitting en banc,
definitively resolve the uncertain status of more than 100 Transfer
Certificates of Title and their derivatives5 which
were all traceable to TCT no. 16212 issued in favor of Amando Clemente.

It is my position that the doctrine of res judicata
should not have been applied to the instant Calalang case vis-a-vis the
earlier De la Cruz case as to bring about the dismissal of
petitioner’s action for lack of merit.

It is the contention of petitioners that the De la Cruz
case is not applicable inasmuch as, being an action in personam,
it is binding only upon the parties involved
therein, namely, Agustina de la Cruz et al., Lucia de la Cruz and Iglesia Ni
Kristo (INK).

To recall, the De la Cruz case was an action
to recover possession and ownership filed by Agustina against Lucia de la Cruz
as predecessor-in-interest of INK. With
respect to the object against which the said action was directed, such action
is classified as an action in personam because its objective was
to establish a claim or liability against Lucia de la Cruz for conveying to
INK, a parcel of land which Agustina and her co-plaintiffs claimed was a part
of their inheritance in the estate of their grandfather, Policarpio de la Cruz.

Although an action to recover a parcel of land is a real action
since it concerns a right over real property, such action is an action in
personam in the sense that its judgment binds only particular parties,
the latter having been the only ones heard before the Court.6 To repeat, a real action may at the same time be an
action in personam and not necessarily an action in rem.7 An action to
recover possession of real
property is not an action in rem or an action against the whole
world, like a land registration proceeding or probate of a will; it is an
action in personam, such that a judgment therein is binding only
upon the parties properly impleaded and duly heard or given an opportunity to
be heard.8 Accordingly, since the petitioners herein were not
impleaded in the De la Cruz case, the same has no binding
effect upon petitioners in this
present controversy.

Our decision in Calalang v. Register of
Deeds which heavily relied on the doctrine of res judicata
in upholding INK’s claim over Lot 671-C cannot be applied because for res
judicata to apply, there must be, among other requisites, identity of
parties and cause of action.9

This we fail to see in the instant case vis-a-vis the De la
Cruz case. We cannot consider
petitioners herein as “successors-in-interest by title subsequent to the
commencement of action”10 because
petitioners’ transfer certificates of title were obtained prior to the
institution of the action to recover ownership and possession by Agustina de la
Cruz in 1975. Note that petitioners
obtained their respective titles after the 1952 sale by Dorotea de la Cruz to
Amando Clemente, predecessor-­in-interest of petitioners, who developed the lot
into a subdivision.

The lack of identity of parties is underscored by the fact that
not one of the petitioners in the instant case was joined as a party in the De
la Cruz case, although they were already real parties in interest
at the time, having constructed buildings on the disputed property after 1952
and before 1975. An action for recovery
of possession and ownership should be maintained against the actual or legal
possessors of the property, for such persons are real parties in interest bound
by the judgment which may be rendered in that action.11 In fact, had the 1984 suit of Agustina de la Cruz
against properties of Lucia de la Cruz prospered, petitioners herein as actual
possessors since 1952 would undeniably sustain damages. Clearly, petitioners, as real parties in
interest, have a real, actual, material and substantial interest,12 for they would have lost their lots and houses if the claim of Agustina had
been sustained.

Furthermore, res judicata is not applicable to the case at bar
because there is no identity of causes of action between the De la
Cruz case and the instant petition. In the De la Cruz case, the cause of action was for the recovery of possession
against Lucia which was anchored on the issue of whether or not a trust and/or
co-ownership existed between Lucia de la Cruz and the heirs of Maximo and
Filomeno de la Cruz. Thus, the Court
principally examined the evidence presented by Agustina de la Cruz and her
co-petitioners to prove their claim that they had been defrauded by Lucia de la
Cruz of their inheritance from their grandfather, Policarpio de la Cruz.

On the other hand, in the present case, the cause of action is
for the quieting of title, which arose from a consulta case
wherein the Register of Deeds entertained doubts regarding the registrability
of the Transfer Certificate of Title in the name of Constancio Simangan, the
land involved being covered by two sets of titles issued in the names of
different owners, one derived from
Amando Clemente and the other from Lucia de la Cruz (RT-58).13

Moreover, conspicuous is the absence of any lis pendens annotated in petitioners’
Certificates of Title. Any decision in
a case involving any right to land registered under the Land Registration Law
shall only bind parties thereto unless notice of lis pendens
is recorded in the Certificate of Title.14

A major point to be considered in this reversal is the anomalous
primary entry of the deed of sale relating to Lot 671 on July 17, 1943 which
had been caused to be made by Lucia de la Cruz in the Day Book of the Register
of Deeds of Manila (Entry No. 258, Page 7, Vol. 7).15 Such entry cannot be considered as the operative
act that conveyed the property to her as vendee because the Deed of Sale was
not registered in accordance with law. Section 50 of Act 496,16 then the
law in force, provides that, “registration of all voluntary transactions
affecting registered lands shall be made in the office of the Register of Deeds
for the province or city where the land lies.” It is but logical for
transactions affecting registered lands to be inscribed in the Register of
Deeds of the province or city where the same are located for accessibility and
convenience to the parties involved.

In the case at bar, this requirement has been glaringly
violated. Contrary to the above-cited
provision, the inscription of the Deed of Sale was made in the Register of
Deeds of the City of Manila instead of in the Province of Rizal. Thereby, Lucia de la Cruz disregarded the
existence of TCT No. 40355 Book T-201 which had been in the custody of the
Register of Deeds of Pasig, Rizal since April 25, 1940 until April 11, 1946
when it was transferred to the Register of Deeds of Quezon City.17

We cannot accept
respondent’s allegations that during the Japanese Occupation, registration of
transactions, regardless of where the titles were kept, was undertaken by the
Register of Deeds of Manila, for that would be tantamount to disregarding the
existence of Act 496, a non-political law which continues in force until
changed or abrogated by the rightful sovereign, i.e., the Commonwealth of the
Philippines and later the Republic of the Philippines.18 Administrators who are mandated by law to
discharge certain ministerial duties may not, with impunity, violate the same
law.

Moreover, the primary entry in the day book of the Register of
Deeds in favor of Lucia De la Cruz cannot prevail over TCT 40355 because entry
in the day book is only a preliminary step in registration while the issuance
of a new certificate of title is the final step which produces the effect of
registration. In practice, the first
and the last steps are not completed within the same day. It is however, of no consequence when actual
registration is finally accomplished, for when accomplished, its effect
retroacts as of the date of the entry in the day book. But if the issuance of a new certificate of
title could not be accomplished at all, the primary entry in the day book
automatically loses its force and effect.19

No evidence is adduced to show that a Transfer Certificate of
Title was ever issued to Lucia de la Cruz. The De la Cruz
decision merely speculated that one must have been issued to her, thus:

“In due course of official business and duty, a new
Transfer Certificate of Title must have been issued to
the new owner, Lucia de la Cruz. The entire records
do not disclose the number
of the new Transfer Certificate of Title (TCT) in the name of Lucia
de la Cruz. When
in 1971, Lucia de la Cruz petitioned for the reconstitution of her title in the
Court of First Instance of Manila, she alleged her
title as No. (N.A.). The Court granted the petition and the Register of Deeds of
Manila issued to her TCT No. RT-58, thereby cancelling TCT-40355, T201.”20 (Underscoring provided)

Thus since there was no certificate of title that was issued
after the alleged sale in favor of Lucia de la Cruz, then the alleged
inscription in the Primary Entry Book in the Registry of Deeds of Manila did
not “ripen” into actual registration. As such, it cannot prevail over TCT 40355 then in the custody of
the Register of Deeds of the Province of Rizal.

Article 1544 of the Civil Code relating to the provisions on
double sale21 cannot be made to apply in
favor of private respondent INK
just because a new transfer certificate of title must have been issued after
the sale on November 29, 1941 by Eugenia de la Cruz and Dorotea de la Cruz to
Lucia de la Cruz (INK’s predecessor-in-interest). This is because the preference supposed to be conferred by
Article 1544 upon the inscription of the Deed of Sale in Lucia’s favor in the
Register of Deeds of Manila failed to materialize for reasons already
discussed.

Hence, Amando Clemente’s procurement in good faith of TCT No.
16212 issued over Lot 671-A on August 9, 1951 must be considered as the first
inscription after TCT No. 40335.

It is settled that “when two certificates of title are
issued to different persons covering the same land in whole or in part, the
earlier in date must prevail, and, in case of successive registrations where
more than one certificate is issued over the land, the person holding a prior
certificate is entitled to the land as against a person who relies on a
subsequent certificate.”22 A closer
examination of TCT No. 40355 discloses that it was signed by Register of Deeds
Teodoro Gonzales on April 25, 1940.23 The last
inscription in the series of transactions at the back shows the sale of Lot 671-A to Amando Clemente on August 1, 1951
for the sum of P178,556.40. In lieu
thereof, TCT No. 16212 in Clemente’s name and TCT No. 16213 were issued,
Clemente obtaining his TCT No. 16212 on August 9, 1951. On the other hand, INK obtained its TCT No.
168322 on July 17, 1975. Consequently,
as between the title of Amando Clemente and Iglesia Ni Kristo, who are both
claimants to part of the same land, Clemente’s earlier certificate of title
must prevail.

Prior to Clemente’s inscription, there was no indication whatsoever
of any sale by Eugenia and Dorotea de la Cruz to Lucia de la Cruz in 1941 which
respondents claim to have effectively preempted any subsequent dealings on Lot 671, namely the sale in favor of
Amando Clemente in 1951. INK’s
predecessor?in-interest, Lucia de la Cruz, was never able to present a
TCT of the land she claimed to have bought in 1941 from Dorotea de la Cruz and
Eugenia de la Paz. Lucia merely caused
the cancellation of the original TCT 40355 of her two vendors through the
highly questionable entry in the Primary Entry Book (in 1943) of the Register
of Deeds of Manila and not in the Register of Deeds of Rizal where the subject
land is located, in violation of law. To remedy this anomaly, she got Reconstituted Title RT-58 some thirty
(30) years later.

Furthermore, to disregard the inscription in favor of Amando
Clemente would destroy the value and reliability of the Torrens System which
prescribes conclusiveness of all matters contained in a certificate of title
issued by the Register of Deeds. Amando
Clemente, as an innocent purchaser in good faith, rightly relied on the
correctness of the inscriptions at the back of TCT No. 40355. Under the Torrens System, every person
dealing with registered land may safely rely on the correctness of the
certificate of title issued therefor and the law will in no way oblige him to
go behind the certificate to determine the condition of the property.24 When there is nothing on the face of the title to
indicate any cloud or vice in the ownership of the property or any encumbrances
thereon, a purchaser is not required to explore further than what the Torrens
Title upon its face indicates, in quest for any hidden defect or inchoate right
that may subsequently defeat his right thereon.25

Since the inscription of the Deed of Sale in the Registry of
Manila was invalid, it follows that the reconstitution of the same document by
Lucia de la Cruz in 1971, 30 years after the sale by Dorotea de la Cruz is
perforce invalid, applying the legal maxim that a spring cannot rise higher
than its source.

Moreover, it could not be given effect because it was attended
with legal infirmities. Although the De
la Cruz case mentions that the “reconstitution
proceedings” in 1971 were “duly published,”26 the case does not state that notices were given to
adjoining owners as required by Republic Act No. 26.27 Petitioners insist that they had never received
any notice of the reconstitution proceedings. They further allege that it was only in 1986 when INK started putting up
“No Trespassing” signs on their property, that they became aware of
other claimants to their properties.

A reconstitution proceeding is an in rem
proceeding. But before it can be treated
as such, certain pre-requisites must first be complied with.28 Sec. 12 of R.A. No. 26 expressly requires service
of notice of the initial hearing to the adjoining owners and the actual
occupants of the land.29 Said
section provides that a petition for reconstitution shall state or contain,
among other things, “(e) the names and addresses of the occupants or
persons in possession of the property, of the owners of adjoining properties
and of all persons who may have interest in the property.” The next
section mandates the publication of said notice of the petition at the expense
of the petitioner and the sending of copies of the notice to parties mentioned
in Sec. 12.30 Notice by publication is
insufficient as regards actual possessors of the property. It cannot be overemphasized that notice is
jurisdictional and lack of it deprives the court of authority to make a valid
decree.31 In petitions for reconstitution of titles, actual
owners and possessors of the lands must be duly served with actual and
personal notice of the petition.32

Needless to say, since publication, in and of itself is
insufficient, the reconstitution of TCT RT No. 58 in favor of Lucia de la Cruz
was necessarily invalid. Hence, when
Lucia de la Cruz sold the disputed property on July 17, 1975, she was in no
position to transmit any dominical rights to her vendee Iglesia ni Kristo.

ACCORDINGLY, I vote
to GRANT the petitioners’ motion
for reconsideration, without prejudice to litigating anew in another
appropriate proceeding the issues of overlapping of titles among various
claimants and of good faith on the part of the Iglesia ni Kristo.

1 G.R. Nos. 76265 & 83280, 208
SCRA 215.

2 G.R. No. 61969, 130 SCRA 666.

3 Rollo, p. 732.

4 Rollo, p. 785.

5 See Rollo, pp. 120-136.

6 p. 123, Vol. 1, Moran, Rules of
Court and p. 341, Vol. 1 Francisco,
Rules of Court.

7 Hernandez v. Rural Bank
of Lucena, Inc., L-29791, January 10, 1978, 81 SCRA 84.

8 Ang Lam v. Rosillosa and
Santiago, 86 Phil. 447.

9 Mendoza v. Court of
Appeals, G.R. No. 81909, September 5, ­1991, 201 SCRA 343; Filipinas Investment
and Finance Corp. v. IAC, G.R. Nos. 66059-60, December 4, 1989, 179 SCRA
728; Magdangal v. City of Olongapo, G.R. No. 83828, November 16, 1989,
179 SCRA 506; Asuncion v. Pineda, G.R. No. 47924, July 31, 1989, 175
SCRA 719.

10 Sec. 49 (b), Rule 39 of
the Rules of Court.

11 p. 156, Vol. 1, Moran,
Rules of Court.

12 p. 212, Vol. 1,
Francisco, Rules of Court.

13 Footnote 1, pp. 218-219.

14 Felix Gochan & Sons
Realty Corp. v. Cañada, 99686, August 31, 1988, 165 SCRA 207.

15 de la Cruz v. de
la Cruz, supra, pp. 697-698.

16 Amended by Sec. 51 of
P.D. 1529.

17 Footnote 1, p. 226; Rollo
of G.R. No. 76265, p. 629.

18 Co Kim Chan v.
Valdez Tan Kek and Dizon, 75 Phil. 113.

19 Peña, Registration of
Land Titles and Deeds, 1988 Edition, pp. 209-210.

20 De la Cruz v. De
la Cruz, G.R. No. 61969, July 25, 1984, 130 SCRA 666, 698.

21 Article 1544, second
paragraph states:

“x x x              x x x               x x x

Should it be immovable property, the
ownership shall belong to the person acquiring it who in good faith first
recorded it in the Registry of Property.

x x x               x x x               x x x.”

22 Director of Lands v. Court
of Appeals No. L-45168, January 27, 1981, 102 SCRA 370, citing Pajomayo v.
Manipon, No. L-33676 June 30, 1971, 39 SCRA 676; De Villa v. Trinidad
No. L-24918, March 20, 1968, 22 SCRA 1167; Alzate v. PNB, No. L-20068,
June 26, 1967, 20 SCRA 422; Legarda v. Saleeby, 31 Phil 590

23 Annex
“A,” Rollo of G.R. No. 76265, p. 745.

24 Santos v. Court of
Appeals, G.R. No. 90380, September 13, 1990, 189 SCRA 550; Davao Grains, Inc. v.
IAC, G.R. No. 78209, March 31, 1989, 171 SCRA 612; Director of Lands v.
Abache, et al., 73 Phil. 606 (1942).

25 Philippine National Bank v.
Intermediate Appellate Court, G.R. No. 71753, August 25, 1989, 176 SCRA 736;
National Grains Authority v. IAC, G.R. No. 68791, January 28, 1988, 157
SCRA 380.

26 p. 698, De la
Cruz case.

27 Entitled, “An Act
Providing A Special Procedure for the Reconstitution of Torrens Certificates of
Title Lost or Destroyed.”

28 Pena, supra
at footnote no. 16, p. 408.

29 Republic v.
Marasigan, G.R. No. 85515, June 6, 1991, 198 SCRA 219; Tahanan Development
Corp. v. Court of Appeals, G.R. No. 55771, November 15, 1982, 118 SCRA
273.

30 Sec. 13. The court shall cause a notice of the
petition, filed under the preceding section, to be published, at the expense of
the petitioner, twice in successive issues of the Official Gazette, and to be
posted on the main entrance of the municipality or city in which the land is
situated, at the provincial building and of the municipal building at least
thirty days prior to the date of hearing. The court shall likewise cause a copy of the notice to be sent, by
registered mail or otherwise, at the expense of the petitioner, to every person
named therein whose address is known, at least thirty days prior to the date of
hearing. Said notice shall state, among
other things, the number of the lost or destroyed certificate of title, if
known, the name of the registered owner, the names of the occupants or persons
in possession of the property, the owners of the adjoining properties and all
other interested parties, the location, area and boundaries of the property,
and the date on which all persons having any interest therein must appear and
file their claim or objections to the petition. The petitioner shall, at the hearing, submit proof of the
publication, posting and service of the notice as directed by the court.

31 Adjap Allama v.
Republic, G.R. No. 88226, February 26, 1992, 206 SCRA 600; Republic v.
Marasigan, G.R. No. 85515, June 6, 1991, 198 SCRA 219; Serra Serra v.
Court of Appeals, G.R. No. 34080, March 22, 1991, 195 SCRA 493; Republic v.
IAC, G.R. No. 68303, January 15, 1988, 157 SCRA 62.

32 Alabang Development v.
Valenzuela, No. 54904, August 30, 1982, 116 SCRA 277; Underscoring ours.

180

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