SPOUSES FLORENTINO L. FERNANDEZ AND VIVENCIA B. FERNANDEZ, PETITIONERS, VS. HON. COURT OF APPEALS AND ZENAIDA ANGELES FERNANDEZ, RESPONDENTS.

This is a petition for
review of the decision of the Court of Appeals
in CA-G.R. CV No. 05191 which modified the decision of the Regional Trial
Court, Branch 95, Quezon City in Civil Case No. Q-32843 ordering
private respondent Zenaida Angeles-Fernandez
to execute a deed of conveyance over 1/3 portion or 110 square meters of the lot subject of the action.

The facts of the case are
as follows:

On November 28, 1966, petitioners-spouses Florentino
and Vivencia Fernandez and private respondent Zenaida
Angeles-Fernandez and the latter’s husband Justiniano
Fernandez purchased in common a parcel
of land with an area of 310 square meters identified as Lot 13, Block 19, Pag-Asa
Subdivision, Quezon City.  The parcel of land was purchased for P15,500.00.  Spouses Florentino and Vivencia Fernandez
advanced the downpayment of P5,500.00
to the vendors-spouses Santos and Matilde de Torres.  A Deed of Conditional Sale (Exhibit “B”) was executed by the spouses de Torres in
favor of the two Fernandez couples.

On February 24, 1967, the vendors Torres executed a Deed of
Absolute Sale in favor of spouses Zenaida and Justiniano
Fernandez only.  When petitioners learned
that the Absolute Deed of Sale did not include their names as vendees they
confronted Zenaida and Justiniano
Fernandez.  Thus, on April 24, 1967, Zenaida
and Justiniano Fernandez executed an affidavit
(Exhibit “D”) in which they acknowledged the sale to petitioners Florentino
and Vivencia Fernandez of a portion of the subject parcel of land consisting of 110
square meters and the receipt of the consideration therefor
in the amount of P5,500.00.

When private respondent Zenaida
Angeles-Fernandez planned to build a house on the lot, she was informed by the City Engineer of Quezon
City that the area in Pag-asa is classified under the
zoning ordinance as R­-2 or residential 2, wherein the minimum requirement for
a family house is 240 square meters and therefore,
no two (2) separate and
independent family houses can be built on the 310 square meter lot.  She also found out that the Register of Deeds will not issue a separate title
for only 110 square meters (p. 4, C.A. Decision; p. 36, Rollo).

Thus, a duplex
building was constructed on the subject
land, one unit known as No. 216-A Road I,
Pag-asa, Quezon City which was occupied by petitioners Florentino and Vivencia and the other unit known as No. 216, Pag-asa, Quezon City which was occupied by the spouses Zenaida and Justiniano.

On January 26, 1970,
Zenaida and Justiniano
caused the issuance of a certificate of title (TCT No. 149347) only in their names (p. 47, Rollo).

On February 26, 1976,
private respondent Zenaida Fernandez and her husband Justiniano Fernandez filed a petition for voluntary
dissolution of their conjugal partnership before the Juvenile and Domestic
Relations Court, Quezon City.  In
the petition, the couple prayed for judicial approval of their compromise
agreement wherein Justiniano waived all his rights to
the conjugal properties including the subject parcel of land.  Pursuant to the compromise agreement, the
Juvenile and Domestic Relations Court awarded the parcel of land subject of the
instant case to private respondent Zenaida
Angeles-Fernandez on December 13, 1976.  In a
letter dated October 22, 1977, private respondent demanded that
petitioners vacate the premises of the lot awarded to her.  On June 9, 1981, petitioners-spouses Florentino
and Vivencia filed an action to quiet title
and damages against Zenaida Fernandez only, who was
then already estranged from her husband Justiniano.  In another letter dated June 21,
1981, Zenaida reiterated her demand that petitioners vacate the
premises of the lot awarded to her, which lot was also the subject matter of
the complaint for quieting of title filed by petitioners.

After trial, a decision (pp. 43-45, Rollo) was rendered on July 23,
1984 wherein the
trial court made the following findings and conclusions:

“1.  The genuiness and/or due execution of the Deed of Conditional
Sale dated November 28, 1966
(Exhibit ‘B’ & Exhibit ‘2’) and Affidavit dated April 24, 1967 (Exhibit ‘D’ & Exhibit ‘4‘),
were admitted by defendant Zenaida Angeles-Fernandez. 
Likewise, the voluntariness of the execution
thereof, including their contents, were not seriously controverted by defendant Zenaida
Angeles-Fernandez.  Said documents, therefore,
should be taken against her for as ruled by the higher court; ‘a man’s acts,
conduct, and declarations whereever made, if
voluntary, are admissible against him, for the reason that it is fair to
presume that they correspond with the truth, and it is his fault if they do
not.’ (U.S. vs.
Ching Po, 23 Phil. 578, 583);

“2.  The
claim of defendant Zenaida Angeles?Fernandez to
the effect that the P5,500.00 used as down payment for the purchase price in
the total amount of P15,500.00 mentioned in the Deed of Conditional Sale dated
November 28, 1966 (Exhibit ‘B’ & Exhibit ‘2’), was merely a loan, and that she and her husband Justiniano E. Fernandez have already paid the same almost
three-fold to plaintiffs, cannot be considered there being no concrete proof on
record to substantiate the same.  The
Court noted, however, that no further amount, aside from the P5,500.00 were paid by the plaintiffs for the purchase of Lot
13, Block N-19 of Pagasa Subdivision.  By mathematical computations, said amount was
short for the amount they should pay for the 1/2 portion of the purchased lot,
and they should be required to reimburse defendant Zenaida
Angeles?Fernandez;

“3.   Likewise, the verbal claim of the defendant Zenaida Angeles-Fernandez that she and her husband Justiniano B. Fernandez executed the Affidavit dated April
24, 1967 (Exhibit ‘D’ &
Exhibit ‘4’) as security or assurance to
plaintiffs’ non-eviction from the premises they are co-occupying and/or
payment of the alleged loan, appears gratuitious and
illogical, and cannot be given weight more than their admission (Exhibit ‘B’
& Exhibit ‘4’), while admission is against interest.

“4. 
The fact that the names of plaintiffs no longer appear as
co-vendees in the Deed of Absolute Sale dated February 24, 1967 (Exhibit ‘C’ &
Exhibit ‘3’), and to the title to Lot. 13, Block N-19 of the Pagasa Subdivision, Quezon City
Exhibit ‘A’ & Exhibit ‘1’), as of not moment (sic) and inconsequential to
their right or ownership over the 1/2 portion of the lot, the same having been
sufficiently established by the Deed of Conditional Sale dated November 28,
1966 (Exhibit ‘B’ and Exhibit
‘2’); the Affidavit dated April 24, 1967 (Exhibit ‘D’ & Exhibit ‘4′); and the proof on record showing that
defendant Zenaida Angeles-Fernandez collected taxes
due on the subject lot for the year 1974, 1975, 1976 and 1977 (Exhibit
‘H’).” (pp. 50-51, Rollo)

Anent the ownership of the duplex house, the trial court
concluded that although the petitioners advanced the sum of P1,258.00 (Exhibit “K” and “K-1″) for the unit
occupied by them, said amount is not sufficient to construct one unit of the duplex building.

The trial court disposed of the case as follows:

“All told, this Court finds plaintiffs spouses Florentino L. Fernandez and Vivencia
B. Fernandez, owner of 1/2 portion or the area of 113 square meters of the Lot
13, Block N-19 of Pag-asa Subdivision, Quezon City,
subject to reimbursement of the sum of P2,250.00, representing the difference
of the total amount they ought to pay for the purchase price thereof, to
defendant Zenaida Angeles-Fernandez, plus legal
interest thereon from February 24, 1967 until fully paid; and defendant Zenaida Angeles-Fernandez owner of the other one-half or
113 square meters of the aforesaid lot, together with both units of the duplex
house existing thereon, subject to the provision of Article 448 of the Civil Code.

“WHEREFORE, decision is hereby rendered:

“1.  ORDERING defendant Zenaida Angeles-Fernandez to execute a deed of conveyance
over 1/2 portion or 113 square meters of Lot 13, Block N-19 of Pag-asa Subdivision, covered by Transfer Certificate of
Title No. 149347 of the Register of Deeds of Quezon
City, in favor of plaintiffs,
spouses Florentino L. Fernandez and Vivencia B. Fernandez, upon the latter’s payment of
P2,225.00 plus legal interest thereon counted from February 24, 1967, until
fully paid.

“2. The portion
of the duplex building resting on the portion of the lot to be reconveyed to the plaintiffs, spouses Florentino
L. Fernandez and Vivencia B. Fernandez, shall remain
under the ownership of defendant Zenaida
Angeles-Fernandez, subject to the provision of Article 448 of the Civil Code.

“x x x“

(pp. 53-54, Rollo).

Petitioners filed a motion to reconsider the decision insofar as the area awarded them was concerned and the amount spent by them for the
construction of the duplex house.  On November
15, 1984, an order
(pp. 55-56, Rollo) was issued by the trial court amending the July 23, 1984 decision, thus:

“WHEREFORE, 1) The dispositive
portion of the decision dated July 23, 1984, is hereby amended as follows:  ‘1. ORDERING defendant Zenaida
Angeles-Fernandez to execute a deed of conveyance over 1/3 portion or 110
square meters of Lot 13, Block N-19 of the Pag-asa
Subdivision, covered by Transfer Certificate of Title No. 149347 of the
Register of Deeds of Quezon City, in favor of
plaintiffs, spouses Florentino L. Fernandez and Vivencia B. Fernandez, upon the latters
payment of P2,225 plus legal interest thereon counted from February 24, 1967,
until fully paid.’ 2) Denying all other matters raised
in the motion for reconsideration and opposition thereto.

“SO ORDERED.” (pp. 55-56, Rollo)

While the order amended
the area of the land to be awarded to the petitioners from 1/2 to 1/3, it failed to delete the portion ordering petitioners
to pay private respondent the amount of P2,225, as originally ordered in the July 23, 1984 decision.

Not satisfied with the trial court’s decision and the order
amending said decision, both the petitioners and the private respondent
appealed to respondent Court of Appeals. 
In a decision (pp. 33-40, Rollo) promulgated on January 26, 1988, respondent appellate court made
a different conclusion and modified the decision of the trial court:

“The main basis of the trial court in concluding that the plaintiffs
are entitled to 1/2 and later to 1/3 portion of the lot and house in Pag-asa are the deed of conditional sale (Exh. B and 2) and
the affidavit executed by Justiniano Fernandez (Exh. D).

“It appears, however, that the effect of
said documents have been modified by later events.  The first is the absolute deed of sale of the
house and lot in question and the subsequent issuance of the title thereof only
in the name of Justiniano Fernandez and his wife (Exh. C and 3 and Exh.
A and 1). 
Thereafter, Transfer Certificate of Title No. 149347 in the name of the
spouses Justiniano E. Fernandez and Zenaida A. Fernandez was issued by the Register of Deeds of Quezon City
on January 26, 1970 (Exh. A). 
If, indeed, the herein plaintiffs were entitled to 1/2 of the
said property, they should have taken steps to include their names in the said
title or at least had it annotated on said title.  A Certificate of Title issued a party
accumulates all the ultimate facts with respect to a particular piece of
registered land in one single document, making out a precise and correct
statement to the exact status of the fee simple title which the owner has in
fact.  Once issued, the certificate is
the evidence of the title which the owner has (Legarda
vs. Saleeby, 31 Phil. 590).  A torrens title concludes all
controversy over ownership of land covered by final decree of registration, and
title by adverse possession cannot be acquired against the registered owner
(Sec. 46, Act 496; J.M. Tuason and Co. vs. Vibat, L-28884, May 29, 1963, 8 SCRA 54; Espiritu vs. Sison, CA 51612-R,
Feb. 14, 1979).

“What militates more against the claim of ownership of a
portion of the property in question by the plaintiffs is the fact that as a
result of marriage settlement between Justiniano
Fernandez and his wife Zenaida, the whole property
was adjudicated to Zenaida.  The settlement was approved by the Juvenile
and Domestic Relations Court.  The herein
plaintiffs were supposed to know about said marriage settlement of property.  Here is a situation where Zenaida
was in fact abandoned by her husband Justiniano, who
is a nephew of plaintiff Florentino Fernandez.  The plaintiffs should have intervened in said
case by filing their claims on the property that was to be granted to Zenaida alone in the marriage settlement.  Indeed, it would be less than fair for the
herein plaintiffs to demand their alleged share against Zenaida
alone after their nephew agreed to grant said property to his wife whom he
abandoned.

“Lastly, the cause of action of the plaintiffs had already
prescribed.  As already stated, the
Transfer Certificate of Title was issued in the name of the spouses Justiniano and Zenaida Fernandez
in 1970.  From said date, Justiniano and his wife
exercised acts of absolute ownership by mortgaging the property.  The instant action to claim ownership of the
portion of the land was filed on July
9, 1981.

“With these findings, We find no
merit in the contention of plaintiffs-appellants that they are entitled to
damages and attorney’s fees.

“WHEREFORE, the decision appealed from is hereby MODIFIED by
declaring the defendant Zenaida Fernandez as the sole
owner of the property in question covered by Transfer Certificate of Title No. 14934, Registry of Deeds of Quezon City.

“In fairness to the
plaintiffs, however, defendant Zenaida Fernandez is
ordered to return to the plaintiffs the amount of P5,500.00
plus interest at the legal rate
from November 28, 1966
until full payment thereof.

“SO ORDERED.” (pp. 39-40, Rollo)

Petitioners’ motion for reconsideration of the decision of the
Court of Appeals was denied on April 22, 1988 (p. 42, Rollo).

On June 15, 1988,
petitioners filed the instant petition for review.  They contend that respondent appellate court
erred in not declaring them part owners of the lot in question despite the fact
that it is not disputed that petitioners and defendant Zenaida
Fernandez with her husband Justiniano Fernandez
entered into an agreement with the vendors-spouses Santos
and Matilde de Torres that the subject land would be
purchased by them in common.

While, as a rule, this Court is bound by the findings of the
Court of Appeals in matters of fact, that rule is subject to well-settled
exceptions, amongst them:  (1) when the same are grounded entirely on speculation, surmise, and conjecture; (2)
the inference made is manifestly mistaken; (3) x x x; (4) its judgment is based on a misapprehension of facts;
(5) it went beyond the issues of the case and its findings contravene
admissions of the parties; (6) its findings of fact
are contrary to those of the trial
court; (7) the same are conclusions without citation of specific
evidence; (8) x x x; and
(9) when the findings of fact of the Court of Appeals are not supported by the evidence or
contradicted in fact by the evidence on record (Teodoro
v. Court of Appeals, L-31471, November
12, 1987).

In the instant case, there is a disparity in the factual findings
and conclusions of the respondent appellate court and the trial court.  On the basis of the evidence presented and in
view of the accepted rule that
“the judge who tries a case in the court below, has vastly superior
advantage for the ascertainment of truth and the detection of falsehood over an
appellate court of review (Roque v. Buan, L-22459, October 31, 1967, 21 SCRA 642), the findings
of the trial court must be upheld.

We agree with petitioners’ contention that respondent court erred
in not declaring them as part owners
of the subject property.  There is
sufficient evidence on record to
prove that petitioners and spouses Justiniano and Zenaida Fernandez purchased in common the lot subject of this case
and that it was the parties’ intention to become owners of specific portions
thereof.

The purchase of the property by the two Fernandez couples was
evidenced by a Deed of Conditional Sale (Exhibit “B” and Exhibit
“2”) executed by the previous owners Spouses Santos and Matilde de Torres in favor of the petitioners and the
Spouses Zenaida and Justiniano
Fernandez.  Respondent appellate court
concluded that the effect of the Deed of Conditional Sale was modified by later
events specifically, the execution of a deed
of Absolute Sale in favor of Justiniano
Fernandez and private respondent Zenaida Fernandez only. 
However, respondent appellate court lost sight of the fact that upon
petitioners’ knowledge that the Deed of Absolute Sale was executed in
favor of Justiniano and Zenaida
Fernandez only, the petitioners confronted the latter spouses which led to the
execution by the latter on April 24, 1967 of an affidavit (Exhibit ‘D’) acknowledging petitioners’ purchase of 110
square meters of the subject lot and the receipt of the consideration therefor for P5,500.00.  The due execution and authenticity of both
the Deed of Conditional Sale and Affidavit were never denied by private
respondent.  Having recognized the sale
and the receipt of the consideration in the affidavit, private respondent is
now estopped from going against such declaration.

It is noted that subsequent to the execution of the affidavit, a duplex
house was constructed on the lot where one unit was occupied by private
respondent Zenaida and her husband Justiniano and the other unit by the petitioners.  The expenses for the construction of the
duplex were advanced by the spouses Zenaida and Justiniano, but they demanded reimbursement of the expenses
they advanced for the portion belonging to petitioners.  Exhibit “I” and Exhibit
“J” reveal that on November
10, 1969, Justiniano demanded from the petitioners
payment of their share of the
materials used in the construction of their portion of the duplex house
amounting to P2,607.70 (p. 44, Rollo) and the taxes due from them for the house and lot.  On March 8, 1977, petitioners paid for their share of the
realty taxes for the year 1974, 1975, 1976 and 1977 in the total amount of
P894.36 to private respondent Zenaida (Exhibit
“H”).  For the expenses in the construction of the portion of the duplex
possessed by petitioners, they gave P1,258.10 to Justiniano who issued a receipt therefor
(Exhibit “K” and “K-1”). 
Petitioners promised to liquidate the balance in installment at the rate of P300.00 a month.  The trial court concluded that the amount of
P1,258.10 advanced by petitioners was not sufficient
to construct their portion of the duplex house and that no evidence was
presented to prove that petitioners paid for the balance.  From this findings,
it erroneously concluded that the entire duplex house belongs to private
respondent Zenaida Angeles-Fernandez.

It should be noted that Justiniano
Fernandez admitted in Exhibits “I” and “J” petitioner’s
ownership of the portion of the duplex house now occupied by them.  It may be that the amount of P1,258.10 paid by petitioner Florentino
Fernandez to Justiniano Fernandez was not sufficient
to construct their portion of the duplex house but such insufficiency cannot be
made the basis for divesting them of their ownership.

Respondent court’s conclusion that petitioners were not part
owners of subject land relied much on the existence of Transfer Certificate of
Title No. 149347 issued in the name of Spouses Justiniano
and Zenaida Fernandez only.  It further concluded that if, indeed,
petitioners were entitled to 1/2 of the property, they
should have taken steps to include their names in the title.

Section 50 of Act No. 496 (now Sec. 51 of P.D. 1529), provides
that the registration of the deed is the operative act to bind or affect the
land insofar as third persons are concerned. 
But where the party has knowledge of a prior existing interest which is
unregistered at the time he acquired a
right to the same land, his knowledge of that prior unregistered interest has
the effect of registration as to him. 
The torrens system cannot be used as a shield for the commission of fraud (Gustillo
v. Maravilla, 48 Phil. 442).  As far as private respondent Zenaida Angeles and her husband Justiniano
are concerned, the non-registration of the affidavit admitting their sale of a
portion of 110 square meters of the subject land to petitioners cannot be
invoked as a defense because (K)nowledge
of an unregistered sale is equivalent to registration (Winkleman
v. Veluz, 43 Phil. 604).

The respondent appellate court also erred in ruling that the
cause of action of petitioners had already prescribed in view of the issuance in 1970 of a certificate of title in
the name of the Spouses Justiniano and Zenaida Fernandez. 
As already stated, the issuance
of a certificate of title in the name appearing therein does not preclude
petitioners from asserting their right of ownership over the land in question.  Time and again it has been ruled that the torrens system should not be used
as a shield to protect fraud.  Moreover,
prescription cannot be considered against petitioners who had been in
possession of subject premises from the time it was purchased from the de
Torres spouses in 1967 and continue to possess the same under claim of
ownership.  There is no sufficient basis
for the respondent court to conclude that spouses Zenaida
and Justiniano were possessing
the entire property adversely against petitioners.  At most, the first time that respondent Zenaida Fernandez claimed adverse possession of the entire
premises was when she demanded from petitioners the possession of the unit
possessed by them in a letter dated October 22, 1977 (Exhibit “F”), emboldened by a decision of the Juvenile
and Domestic Relations Court awarding the premises to her.  The decision of private respondent to claim total ownership of the premises was in fact, pursued only
half-heartedly by her because the second time that she demanded possession of
the premises was four (4) years after or on June 21, 1981, after an action to
quiet title was filed by petitioners on June 9, 1981.  In Almanza v.
Arguelles, L-49250 December 21, 1987, We held that, “prescription cannot be invoked in an action
for reconveyance, which is, in effect an action to
quiet title against the plaintiff therein who is in possession of the land in
question.  As lawful possessor and
owner of the disputed portion, her cause of action for reconveyance
which, in effect, seeks to quiet title to property in one’s possession is imprescriptible (also cited in Caragnay-Layno v. Court of Appeals, 133 SCRA 718, citing Sapto, et al. v. Fabiana, 103
Phil. 683 and Faja v. C.A., 75 SCRA 441).  The reason, We
explained in Bucton v. Gabar,
L-36359, January 31, 1974, 55 SCRA 499 is:

“x x
x that while the owner in fee continues liable
to an action, proceeding, or suit upon the adverse claim, he has a continuing
right to the aid of a court of equity to ascertain and determine the nature of
such claim and its effect on his title, or to assert any superior equity in his
favor.  He may wait until his possession
is disturbed or his title is attacked before taking steps to vindicate his right.  But the rule that the statute of limitations
is not available as a defense of an action to remove a cloud from title can only be
invoked by a complainant when he is in
possession.  x x x.” (44 Am. Jur., p.
47)

The judgment in the petition for dissolution of the conjugal partnership filed with
the Juvenile and Domestic Relations Court by private respondent Zenaida Angeles-Fernandez and her husband Justiniano where the property
in question was awarded to Zenaida cannot bind the
petitioners who were not parties thereto. 
The failure of petitioners to intervene in the said proceedings for
dissolution of conjugal partnership is not fatal.  Petitioners may file their claim of ownership
over the one-third portion of the property in question separately
which they did when they brought the complaint for quieting of title before the
trial court.

As already stated, the affidavit executed by Justiniano
Fernandez and private respondent Zenaida Angeles
Fernandez acknowledged the sale of one-third (1/3) portion of the subject land
to petitioners?spouses Florentino and Vivencia Fernandez
and the receipt by the former of the amount of P5,500.00 as consideration
thereof.  However, the trial court in
awarding the said one-third portion to petitioners also ordered the payment by
them of P2,225.00 to private respondent Zenaida Angeles-Fernandez, oblivious of the fact that only
1/3 and not one-half (1/2) pertain to petitioners and that the P5,500.00
advanced by petitioners at the time the subject property was purchased from the
de Torres spouses was sufficient payment for the 1/3 portion awarded to
them.

ACCORDINGLY, the petition is GRANTED.  The decision of respondent appellate court is
REVERSED.  Judgment is hereby rendered
declaring petitioners owners of:  1)
one-third (1/3) or 110 square meters of Lot
13, Block N-19 of Pag-asa Subdivision,
presently occupied by them, covered by TCT NO. 149347 of the
Register of Deeds of Quezon City; and 2) the portion
of the duplex house occupied by them after payment of the balance of P1,349.70
advanced by the husband of private respondent Zenaida
Fernandez for the construction thereof, with interest at the legal rate from
November 1969 until fully paid.

SO ORDERED.

Narvasa, (Chairman), Cruz, Gancayco, and Griño-Aquino, JJ., concur.