NEYPES v. CAFACTS:Petitioners filed an action for annulment of judgment and titles of land and/or reconveyance and/or reversion with preliminary injunction before the RTC against the private respondents. Later, in an order, the trial court dismissed petitioners complaint on the ground that the action had already prescribed. Petitioners allegedly received a copy of the order of dismissal on March 3, 1998 and, on the 15th day thereafter or on March 18, 1998, filed a motion for reconsideration. On July 1, 1998, the trial court issued another order dismissing the motion for reconsideration which petitioners received on July 22, 1998. Five days later, on July 27, 1998, petitioners filed a notice of appeal and paid the appeal fees on August 3, 1998.On August 4, 1998, the court a quo denied the notice of appeal, holding that it was filed eight days late. This was received by petitioners on July 31, 1998. Petitioners filed a motion for reconsideration but this too was denied in an order dated September 3, 1998. Via a petition for certiorari and mandamus under Rule 65, petitioners assailed the dismissal of the notice of appeal before the CA. In the appellate court, petitioners claimed that they had seasonably filed their notice of appeal. They argued that the 15-day reglementary period to appeal started to run only on July 22, 1998 since this was the day they received the final order of the trial court denying their motion for reconsideration. When they filed their notice of appeal on July 27, 1998, only five days had elapsed and they were well within the reglementary period for appeal. On September 16, 1999, the CA dismissed the petition. It ruled that the 15-day period to appeal should have been reckoned from March 3, 1998 or the day they received the February 12, 1998 order dismissing their complaint. According to the appellate court, the order was the final order appealable under the Rules.ISSUES:(1) Whether or not receipt of a final order triggers the start of the 15-day reglmentary period to appeal, the February 12, 1998 order dismissing the complaint or the July 1, 1998 order dismissing the Motion for Reconsideration.(2) Whether or not petitioners file their notice of appeal on time.HELD:(1) The July 1, 1998 order dismissing the motion for reconsideration should be deemed as the final order. In the case of Quelnan v. VHF Philippines, Inc., the trial court declared petitioner non-suited and accordingly dismissed his complaint. Upon receipt of the order of dismissal, he filed an omnibus motion to set it aside. When the omnibus motion was filed, 12 days of the 15-day period to appeal the order had lapsed. He later on received another order, this time dismissing his omnibus motion. He then filed his notice of appeal. But this was likewise dismissed for having been filed out of time. The court a quo ruled that petitioner should have appealed within 15 days after the dismissal of his complaint since this was the final order that was appealable under the Rules. The SC reversed the trial court and declared that it was the denial of the motion for reconsideration of an order of dismissal of a complaint which constituted the final order as it was what ended the issues raised there. This pronouncement was reiterated in the more recent case of Apuyan v. Haldeman et al. where the SC again considered the order denying petitioners motion for reconsideration as the final order which finally disposed of the issues involved in the case. Based on the aforementioned cases, the SC sustained petitioners view that the order dated July 1, 1998 denying their motion for reconsideration was the final order contemplated in the Rules.(2) YES. To standardize the appeal periods provided in the Rules and to afford litigants fair opportunity to appeal their cases, the Court deems it practical to allow a fresh period of 15 days within which to file the notice of appeal in the RTC, counted from receipt of the order dismissing a motion for a new trial or motion for reconsideration. Henceforth, this fresh period rule shall also apply to Rule 40, Rule 42, Rule 43 and Rule 45. The new rule aims to regiment or make the appeal period uniform, to be counted from receipt of the order denying the motion for new trial, motion for reconsideration (whether full or partial) or any final order or resolution.The SC thus held that petitioners seasonably filed their notice of appeal within the fresh period of 15 days, counted from July 22, 1998 (the date of receipt of notice denying their motion for reconsideration). This pronouncement is not inconsistent with Rule 41, Section 3 of the Rules which states that the appeal shall be taken within 15 days from notice of judgment or final order appealed from. The use of the disjunctive word or signifies disassociation and independence of one thing from another. It should, as a rule, be construed in the sense in which it ordinarily implies. Hence, the use of or in the above provision supposes that the notice of appeal may be filed within 15 days from the notice of judgment or within 15 days from notice of the final order, which we already determined to refer to the July 1, 1998 order denying the motion for a new trial or reconsideration.Neither does this new rule run counter to the spirit of Section 39 of BP 129 which shortened the appeal period from 30 days to 15 days to hasten the disposition of cases. The original period of appeal (in this case March 3-18, 1998) remains and the requirement for strict compliance still applies. The fresh period of 15 days becomes significant only when a party opts to file a motion for new trial or motion for reconsideration. In this manner, the trial court which rendered the assailed decision is given another opportunity to review the case and, in the process, minimize and/or rectify any error of judgment. While we aim to resolve cases with dispatch and to have judgments of courts become final at some definite time, we likewise aspire to deliver justice fairly.To recapitulate, a party litigant may either file his notice of appeal within 15 days from receipt of the RTCs decision or file it within 15 days from receipt of the order (the final order) denying his motion for new trial or motion for reconsideration. Obviously, the new 15-day period may be availed of only if either motion is filed; otherwise, the decision becomes final and executory after the lapse of the original appeal period provided in Rule 41, Section 3. Petitioners here filed their notice of appeal on July 27, 1998 or five days from receipt of the order denying their motion for reconsideration on July 22, 1998. Hence, the notice of appeal was well within the fresh appeal period of 15 days, as already discussed.

IMPORTANT NOTES:The FRESH PERIOD RULE do not apply to Rule 64 (Review of Judgments and Final Orders or Resolutions of the Commission on Elections and the Commission on Audit) because Rule 64 is derived from the Constitution. It is likewise doubtful whether it will apply to criminal cases.

IMPORTANT NOTES:

The Neypes RuleSTATEMENT OF THE RULE The "Neypes Rule," otherwise known as the Fresh Period Rule, states that a party litigant may either file his notice of appeal within 15 days from receipt of the Regional Trial Courts decision or file it within 15 days from receipt of the order (the "final order") denying his motion for new trial or motion for reconsideration. (Domingo Neypes versus Court of Appeals, G.R. No. 141524 September 14, 2005)

PURPOSE OF THE RULE To standardize the appeal periods provided in the Rules and to afford litigants fair opportunity to appeal their cases, the Court deems it practical to allow a fresh period of 15 days within which to file the notice of appeal in the Regional Trial Court, counted from receipt of the order dismissing a motion for a new trial or motion for reconsideration. (supra)

The raison dtre for the "fresh period rule" is to standardize the appeal period provided in the Rules and do away with the confusion as to when the 15-day appeal period should be counted. Thus, the 15-day period to appeal is no longer interrupted by the filing of a motion for new trial or motion for reconsideration; litigants today need not concern themselves with counting the balance of the 15-day period to appeal since the 15-day period is now counted from receipt of the order dismissing a motion for new trial or motion for reconsideration or any final order or resolution. (Judith Yu versus Hon. Rosa Samson-Tatad, G.R. No. 170979, 09 Feb. 2011)

[G.R. No. L-40402. March 16, 1987.]

REPUBLIC OF THE PHILIPPINES, Petitioner, v. THE HON. COURT OF APPEALS, and EMILIO BERNABE, SR., EMILIO BERNABE, JR., LUZ BERNABE, AMPARO BERNABE, and ELISA BERNABE, Respondents.D E C I S I O NPARAS, J.:This is a petition for review on certiorari seeking a reversal of the decision of Respondent Court of Appeals 1 dated February 5, 1975 in CA-G.R. No. 50076-R, entitled "EMILIO BERNABE, SR., Et. Al. v. REPUBLIC OF THE PHILIPPINES," affirming the order of the Court of First Instance of Bataan dated August 14, 1971 in Cadastral Case No. 19, LRC Cadastral Record No. 1097, which dismissed petitioner Republics petition for review of the decrees of registration issued pursuant to the decision rendered on December 17, 1968 adjudicating in favor of the private Respondents herein, the lots applied for by them, and the Resolution of Respondent Court dated March 19, 1975 denying herein Petitioners motion for reconsideration.

The undisputed facts are as follows:chanrob1es virtual 1aw libraryLot No. 622 of the Mariveles Cadastre was declared public land in a decision rendered before the last war in Cadastral Case No. 19, LRC Cadastral Record No. 1097. On July 6, 1965, Lot 622 was segregated from the forest zone and released and certified by the Bureau of Forestry as an agricultural land for disposition under the Public Land Act (Record on Appeal, p. 7).

On April 26, 1967, Respondents filed in the Court of First Instance of Bataan a petition to reopen Cadastral Case No. 19, LRC Cadastral Record No. 1097, under Republic Act 931, as amended by Republic Act 2061, concerning a portion of Lot No. 622 Lot Nos. 792, 793, 794, 795, 796, 797, 798 and a portion of Lot No. 324 Lot Nos. 791 and 799 more particularly identified and delineated in the segregation plans of Sgs-3343, Sgs-3440, Sgs-3340, Sgs-3341, Sgs-3342 and Sgs-3339, approved by the Director of Lands, to perfect their rights and register their titles to said lots, having allegedly acquired ownership and possession of said parcels of land by purchase from the original owners thereof, whose possession of the same including that of the herein Respondents, has always been continuous, open, active, exclusive, public, adverse, and in the concept of owners thereof for more than 30 years (Record on Appeal, pp. 3-5 and 11).

On May 17, 1967, the lower court issued an Order setting the petition for hearing and directing that the Republic of the Philippines be notified thereof by furnishing the Solicitor-General, the Director of Lands and the Director of Forestry, a copy of said Order together with Respondents petition by registered mail (Record on Appeal, p. 6).

On August 24, 1967, the Director of Forestry filed an opposition to the petition praying for the denial of the petition once the area involved is found to be within the timberland and therefore inalienable under the Constitution (Record on Appeal, p. 7). Upon verification, however, the Director of Forestry found the area to be the portion of the timberland already released by the government from the mass of public forests and promptly withdrew his Opposition (Record on Appeal, p. 8).

On September 1, 1967, the Acting Provincial Fiscal of Bataan, for and in behalf of the Director of Lands, filed his opposition to the petition alleging that the land is still, in truth and in fact, public land and as such cannot be the subject of a land registration proceeding under Act 496.

The lower court found that the petitioners have complied with all the terms and conditions which would entitle them to a grant. Thus, the dispositive portion of its decision dated December 17, 1968 (Record on Appeal, p. 19), reads:jgc:chanrobles.com.ph

"WHEREFORE, the segregation plans, Sgs-3340, Sgs-3339, Sgs-3341, Sgs-3342, Sgs-3343 and Sgs-3340 and their technical descriptions are hereby APPROVED, and pursuant to Sec. 11 of Act 2259, the court hereby adjudicates in favor of petitioners Emilio Bernabe, Sr., married; Emilio Bernabe, Jr., married; Luz Bernabe, single; Amparo Bernabe, single and Elisa Bernabe, single, all Filipinos and residents of Balanga, Bataan, the lots herein applied for as follows:chanrob1es virtual 1aw libraryand upon this decision having become final, the Commissioner of Land Registration is hereby directed to issue the corresponding decrees of registration therefor."cralaw virtua1aPursuant to the aforecited decision, the Commissioner of Land Registration issued Decrees Nos. N-124813-124818, all dated May 7, 1969 (Record on Appeal, pp. 20-25).

On May 7, 1979, petitioner Republic of the Philippines, acting in its behalf and in behalf of the Director of Lands and the Director of Forestry, through the Solicitor-General, filed a petition for review of the decrees of registration under Section 38, of Act No. 496, as amended, and the corresponding decision of the lower court, on the grounds that the entire proceeding was vitiated by lack of notice to the Solicitor General of the subsequent hearings of the petition for re-opening of the cadastral proceedings; that the parcels of land subject matter of the petition to re-open cadastral proceedings are portions of the public domain, admittedly within the unclassified public forest of Mariveles, Bataan, opened for disposition only on or about July 6, 1965; that subsequently, respondents do not have a registerable title to the land subject matter of the proceedings; and the lower court, without jurisdiction to decree the confirmation of registerable title to respondents over portions of the public domain, as respondents do not qualify under the provisions of Section 48(b) of CA 141, as amended, and that under the circumstances, respondents employed actual fraud in procuring title over the parcels of land (Record on Appeal, p. 25).

On May 29, 1979, respondents moved to dismiss the Petition for Review on the grounds that: (1) The trial court has no jurisdiction over the nature of the action or suit as there is no fraud to justify the setting aside on review of a decree of registration. If the Solicitor General was not notified of the subsequent hearings, it was because he delegated his appearance to the Provincial Fiscal of Bataan. Besides the setting aside or review was filed out of time. (2) The petition states no cause of action, the parcels of land involved in the actions having been already transferred to innocent purchasers for value long before the Solicitor-General even filed the petition for review (Record on Appeal, pp. 27-40).

Their motion to dismiss having been held in abeyance until the hearing of the merits of the case which was set for August 16, 1970, respondents filed their answer to the Petition for Review on August 4, 1970. In their answer, respondents reiterated their grounds in their motion to dismiss (Record on Appeal, pp. 40-44). On November 12, 1970, Petitioner filed an amended Petition for Review, with the additional allegation that after having fraudulently secured title over the parcels of land involved, the petitioners executed simulated deeds of sale purporting to convey various lots composing portions of the parcels involved to third parties for fictitious considerations in an obvious attempt to remove the parcels of land involved from the coverage of Section 38 of Act 496, but in truth, the aforementioned third parties are not innocent purchasers for value, being mere dummies of the petitioners, holding the parcels of land involved only in trust for the petitioners. On November 23, 1970, respondents filed their answer to the Amended Petition for Review (Record on Appeal, p. 56).

On August 14, 1971, the lower court issued its Order denying petitioners Amended Petition for Review (Record on Appeal, p. 56).On appeal to the Court of Appeals on September 20, 1971, the questioned Order of the Court of First Instance of Bataan, Branch I was affirmed (Rollo, p. 33).On February 25, 1975, Petitioner filed a Motion for Reconsideration which was denied by the Court of Appeals for lack of merit, in the Resolution of a special Division of Five, promulgated on March 19, 1975.

Hence this petition. Without giving due course to the Petition, the Court, through its First Division, resolved on May 5, 1975 to require the respondents to comment thereon. On May 30, 1975, respondents filed their comment, alleging that the decision of respondent Court and the questioned resolution were not rendered without or in excess of its jurisdiction. Neither was the discretion exercised by respondent Court arbitrary or despotic.

In its Resolution dated June 4, 1975, the Court resolved to give due course to the Petition and denied the urgent motion of respondents for leave to file a supplemental and/or amended comment. Petitioners filed its Brief on November 29, 1975; respondents, on March 2, 1976. Petitioner filed its Reply Brief on March 25, 1976 and on May 5, 1976, the case was deemed submitted for decision.

Petitioner assigns the following errors:chanrob1es virtual 1aw libraryI. THE RESPONDENT COURT OF APPEALS COMMITTED A REVERSIBLE ERROR IN TOTALLY DISREGARDING THE UNDISPUTED FACT THAT THE LOTS CLAIMED BY HEREIN PRIVATE RESPONDENTS BECAME AGRICULTURAL ONLY ON JULY 6, 1965 WHEN THE SAME WERE RELEASED FROM THE FOREST ZONE AND THAT CONSEQUENTLY THEY LACK THE REQUISITE THIRTY (30) YEARS POSSESSION TO ENTITLE THEM TO A GRANT.

II. THE RESPONDENT COURT OF APPEALS COMMITTED A REVERSIBLE ERROR IN NOT HOLDING THAT THE ENTIRE PROCEEDING FOR REOPENING OF THE CADASTRAL CASE OVER THE LOTS IN QUESTION WAS VITIATED BY LACK OF NOTICE TO THE SOLICITOR-GENERAL.

III. THE RESPONDENT COURT ERRED IN NOT HOLDING THAT THE ALLEGED TRANSFER OF THE LOTS IN QUESTION BY PRIVATE RESPONDENTS TO THIRD PARTIES WHEN THEIR TITLES WERE STILL SUBJECT TO THE ONE-YEAR PERIOD OF REVIEW CONSTITUTES FRAUD SCHEMED BY THE TRANSFERORS AS A MEANS OF FRUSTRATING ANY ACTION AIMED AT NULLIFYING THEIR TITLES THERETO.

The governments cause is meritorious.I It is evident from the facts of the case at bar that private respondents did file a claim for Lot No. 622 of the Mariveles Cadastre and in fact a decision was rendered before the last war in Cadastral Case No. 19 LRC Cadastral Record No. 1097, declaring the lot in question as public land. It must be stressed that said lot was declared public land by virtue of a court decision which has become final and as held by the Supreme Court aforesaid decision is res judicata. (Republic v. Estenzo, 120 SCRA 222 [1983]). It is therefore beyond question that the trial court has no jurisdiction to reopen the cadastral proceeding under R.A. 931 as amended by R.A. 2061 and the decision therein rendered is null and void ab initio.

Furthermore, it is undisputed that aforesaid Lot No. 622 was released as an agricultural land for disposition under Public Land Act only on July 6, 1965. The lower court ordered the issuance of the corresponding decrees of registration for the lots, pursuant to Sec. 48(b), C.A. 141, otherwise known as the Public Land Act, as amended by Republic Act No. 1942, providing for the confirmation of imperfect or incomplete titles, which reads:jgc:chanrobles.com.ph

"(b) Those who by themselves or through their predecessors in interest have been in open, continuous, exclusive, and notorious possession and occupation of agricultural lands of the public domain, under a bona fide claim of acquisition of ownership, for at least thirty years immediately preceding the filing of the application for confirmation of title except when prevented by war or force majeure. These shall be conclusively presumed to have performed all the conditions essential to a Government grant and shall be entitled to a certificate of title under the provisions of this chapter."cralaw virtua1aw library

As pointed out by petitioner, the question is whether or not the lots claimed by respondents could legally be the subject of a judicial confirmation of title under the aforequoted provisions of the Public Land Act, as amended.

The answer is in the negative. Section 48(b) of C.A. No. 141, as amended, applies exclusively to public agricultural land. Forest lands or areas covered with forests are excluded. They are incapable of registration and their inclusion in a title, whether such title be one issued during the Spanish sovereignty or under the present Torrens system of registration, nullifies the title (Li Seng Giap v. Director of Lands, 55 Phil. 693 [1931]; Director of Lands v. Reyes, 68 SCRA 177 [1975]). Thus, possession of forest lands, however long, cannot ripen into private ownership (Vano v. Government, 41 Phil. 161 [1920]; Adorable v. Director of Forestry, 107 Phil. 401 [1960]; Director of Forestry v. Muoz, 23 SCRA 1183 [1968]; Director of Lands v. Abanzado, 65 SCRA 5 [1975]). A parcel of forest land is within the exclusive jurisdiction of the Bureau of Forestry and beyond the power and jurisdiction of the cadastral court to register under the Torrens System (Republic v. Court of Appeals, 89 SCRA 648 [1979]; Republic v. Vera (120 SCRA 210 [1983]; Director of Lands v. Court of Appeals, 129 SCRA 689 [1984].

Thus, even if the reopening of the cadastral proceedings was at all possible, private respondents have not qualified for a grant under Sec. 48(b) of Commonwealth Act 141, the facts being that private respondents could only be credited with 1 year, 9 months and 20 days possession and occupation of the lots involved, counted from July 6, 1965, the date when the land area in sitio San Jose, barrio Cabcaban, Mariveles, Bataan, known as Bataan PMD No. 267, which includes the lots claimed by respondents, had been segregated from the forest zone and released by the Bureau of Forestry as an agricultural land for disposition under the Public Land Act. (Record on Appeal, p. 19). Consequently, under the above mentioned jurisprudence, neither private respondents nor their predecessors-in-interest could have possessed the lots for the requisite period of thirty (30) years as disposable agricultural land.

II Petitioner argues that the government, being a necessary party in the cadastral case, as reopened, its counsel, the Solicitor-General, should have been furnished copies of all court orders, notices and decisions, as in ordinary cases, in order to bind the government. Failure to give such notice deprives the State of its day in Court, and renders the decision void. (Brief for Petitioner, pp. 16-17).

The records show that the Solicitor-General was duly notified of the initial hearing on the petition to reopen Cadastral Case No. 19 but thereafter, notice of subsequent hearings as well as a copy of the decision itself promulgated by the lower court on December 19, 1968 was sent instead to the Provincial Fiscal of Bataan, admittedly the duly authorized representative of the Solicitor-General in the cadastral proceeding as shown in a telegram dated January 19, 1968. (Record on Appeal, p. 47).

In the case of Republic v. Director of Lands (71 SCRA 426 [1976], the Supreme Court, applying the time-honored principle of agency ruled that the service of the questioned decision on the Provincial Fiscal must necessarily be service on the Solicitor-General, and added that technical transgressions relative to the filing and service may be brushed aside when the adverse party (this time the Director of Lands and Forestry and their counsel, the Solicitor-General) is aware of the matter which his adversary would want the court to act upon. Once it appears that the party is already informed by one means or another of what he is to be notified, the required service becomes an empty gesture and strict observance thereof is considered waived. (Citing Estrada v. Sto. Domingo, 28 SCRA 890 [1969]).

In the case at bar, it does not appear that the Solicitor General was so apprised of the decision of the lower court in question as there is no proof that the Provincial Fiscal of Bataan ever sent the Solicitor-General a copy thereof. Furthermore, after the 3rd Assistant Provincial Fiscal filed a notice of appeal from the decision of the trial court, the Provincial Fiscal on March 21, 1969 manifested that he was withdrawing the appeal upon the intervention of the District Forester. (Respondents Brief, p. 44).

It will be observed however that later decisions of the Supreme Court tend to be more strict in the matter of giving notice to the Solicitor General. In a more recent case, Republic v. Court of Appeals, 135 SCRA 161 [1985], it was established that the Solicitor-General is the only legal counsel of the government in land registration cases and as such, he alone may withdraw the Governments appeal with binding effect on the latter. He is entitled to be furnished copies of all court orders, notices and decisions and as held the reglementary thirty-day period for appeal should be reckoned from the time the Solicitor-Generals Office is apprised of the 1970 order of denial and not from the time the special counsel or the fiscal was served with that order. Thus, representatives of the Solicitor General in the case at bar, had no power to decide whether or not an appeal should be made. They should have referred the matter to the Solicitor-General and without copies of court orders, notices and decisions, having been provided by either the trial court or the Provincial Fiscal of Bataan to the Solicitor-General, the assailed decision has no binding effect on the government.

III The petition for review of Decrees Nos. N-124813 to N-124818 under Sec. 38 of Act No. 496 as amended was filed by the Solicitor General on May 7, 1970 in representation of the Republic of the Philippines, in the same Cadastral Case No. 19, LRC Cadastral Record No. 1097, exactly a year after the issuance of aforesaid decrees of registration, on the ground of actual fraud. (Record on Appeal, pp. 43-44).

The basic elements for the allowance of the reopening or review of a decree, are: (1) that the petitioner has real or dominical right; (2) that he has been deprived thereof through fraud; (3) that the petition is filed within one year from the issuance of the decree and (4) that the property has not as yet been transferred to an innocent purchaser. (Libudan v. Gil, 45 SCRA 27 [1972]; Rubico, Et. Al. v. Orellana, 30 SCRA 513 [1969]). It has been held however that the action to annul a judgment, upon the ground of fraud would be unavailing unless the fraud be extrinsic or collateral and the facts upon which it is based have not been controverted or resolved in the case where the judgment sought to be annulled was rendered. (Libudan v. Gil, supra). Review of the decree demands a showing of actual (not constructive) fraud, i.e. actual malice. (Rublico v. Orellana, supra).

In the case at bar, it cannot be said that private respondents employed actual fraud in procuring titles over parcels of land of the public domain as it is a matter of record that the land in question was opened for disposition and alienation only on July 6, 1965. The matter was threshed out in the lower court and the decision of the latter was affirmed by the Court of Appeals. Actual malice is therefore absent.

However, it has been held that, if a decree issued in pursuance of a valid decision, obtained by fraud, may be annulled within one (1) year from entry of said decree, there is more reason to hold that the same is true if entered in compliance with a decision suffering from a fatal infirmity, such as want of due process, (Vda. de Cuaycong v. Vda. de Sangbengoo, 110 Phil. 118 [1960] or lack of jurisdiction of the court that decided the cadastral case. (Republic v. De Kalintas, 25 SCRA 720 [1969]). Thus, on both counts, the case at bar can properly be the subject of review, it having been shown that the Solicitor-General was not properly furnished the requisite notices and copy of the assailed decision but more importantly, the lower court as previously stated had no jurisdiction to re-open the cadastral proceeding under Republic Act 931 as amended by R.A. No. 2061.

IV As to whether or not the transferees of the lot in question are innocent purchasers for value, it is a well settled rule that a purchaser cannot close his eyes to facts which should put a reasonable man upon his guard, and then claim that he acted in good faith under the belief that there was no defect in the title of the vendor. (Leung Yee v. F.L. Strong Machiner Co., Et Al., 37 Phil. 651[1918]. Without the needed verification, he cannot claim to be an innocent purchaser for value in contemplation of law.

Moreover, it is well-settled that a certificate of title is void, when it covers property of public domain classified as forest or timber and mineral lands. Any title issued on non-disposable lots even in the hands of an alleged innocent purchaser for value, shall be cancelled. (Lepanto Consolidated Mining Company v. Dumyung, 89 SCRA 540 [1979] underscoring supplied). In the case at bar, it will be noted that in granting titles to the land in dispute, the lower court counted the period of possession of private respondents before the same were released as forest lands for disposition, which release is tantamount to qualifying the latter to a grant on said lands while they were still non-disposable. Thus, under the foregoing rulings, even assuming that the transferees are innocent purchasers for value, their titles to said lands derived from the titles of private respondents which were not validly issued as they cover lands still a part of the public domain, may be cancelled.

PREMISES CONSIDERED, the assailed decision of the Court of Appeals and the decision of the Court of First Instance are hereby SET ASIDE and REVERSED, because the lots in question still form part of the public domain. The certificates of title issued over them are hereby ordered CANCELLED.

SO ORDERED.

Fernan, Padilla, Bidin and Cortes, JJ., concur.

Alampay, J., is on leave.

Gutierrez, Jr., J., no part as one of the parties was my former colleague.

CAL JR v. Zosa

SANDOVAL-GUTIERREZ, J.: For our resolution is the instant Petition for Review on Certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, assailing the February 11, 2002 Decision[1] of the Court of Appeals in CA-G.R. CV No. 65860, entitled Spouses Prisco, Jr. and Alice Cal, petitioners, versus Mariano A. Zosa, respondent.

Vidal Jimeno, a resident of Barili, Cebu died intestate. He was survived by his widow, Salud Montemayor Jimeno, and their four children namely: Jaime, Jesus, Oscar and Annie, all surnamed Jimeno. They all inherited his estate, including a parcel of land, located in Bulongan, Toledo City, covered by Tax Declaration No. 03320. On September 17, 1949, Salud filed with the then Court of First Instance (CFI) of Cebu a Petition for Letters of Administration over the estate of her husband, docketed as Special Proceedings No. 570-R. Thereafter, Salud died intestate and was survived by her four children. On May 28, 1952, they filed with the then CFI of Cebu a Petition for Letters of Administration over the estate of their parents, docketed as Special Proceedings No. 932-R. Later, the two cases were consolidated in one branch of the court. Thereafter, Atty. Mariano A. Zosa, the herein original respondent, was hired by the four children as their counsel. On August 28, 1957, they executed a Deed of Assignment conveying to him all their rights and interests in the parcel of land in Bulangan, Toledo City as payment for his legal services. On December 18, 1964, the trial court issued an Order in Special Proceedings No. 932-R approving the Deed of Assignment. On various dates, the four siblings again sold their pro-indiviso shares in the same lot to spouses Felix and Pacita Barba. In the meantime, the Bureau of Lands effected a cadastral survey of the lots located in Toledo City. The parcel of land covered by Tax Declaration No. 03320, sold by the Jimeno siblings to both Atty. Zosa and spouses Barba, was identified as Lot 3616 in LRC Cadastral Records No. N-585.[2] The Director of the Bureau of Lands then filed with the City Court of Toledo City a Petition for the Registration of Lot 3616 in the name of any claimant found to be entitled thereto, docketed as Cadastral Case No. N-3-T. Later, the records of the case were elevated to the Regional Trial Court (RTC), Branch 10, Cebu City, which has jurisdiction over the case considering the value of the lot involved. It was docketed as Cadastral Case No. N-2-T.

Respondent Atty. Zosa filed an answer[3] claiming ownership of Lot 3616. He attached Tax Declaration No. 03320 and the December 18, 1964 Order of the court in Special Proceedings No. 932-R approving the sale of the lot to him by the Jimenos.Felix Barba, also filed his answer,[4] opposing respondents claim. He alleged that he is the owner of the lot by virtue of the various Deeds of Absolute Sale executed in his favor by the Jimeno children. Despite his adverse claim, Felix Barba still sold the same lot to spouses Crispin Tango-an and Conchita Dacalus, who in turn, sold it to spouses Prisco Cal, Jr. and Alice Canoy, herein petitioners. Meanwhile, on February 18, 1988, the RTC, Branch 10, Cebu City, sitting as a cadastral court, issued an Order adjudicating Lot No. 3616 in favor of Atty. Zosa. The trial court held: The Court finds merit in Zosas application.

First and foremost to be considered is that when the deeds of sale were executed by the Heirs of Vidal Jimeno in favor of Barba the administration proceedings for the settlement of the estate of Vidal Jimeno and Salud Montemayor has not yet been terminated. In fact, the deeds of sale required approval of the court in order that it could be registered. The administration proceedings not having been terminated yet, there was no summation of the estate of Vidal Jimeno minus the obligations both from private persons and from the government. In other words, there was no total settlement yet of the obligations left by the estate of the deceased and residue been fully determined which the heirs may inherit. Moreover, the sale to Barba by the heirs of Vidal Jimeno failed to comply with the requirements laid down by Rule 74 of the Rules of Court. Claimant Zosa, being the lawyer of the administration case should be considered as one of the creditors of the estate of Vidal Jimeno. The order which approved the cession and assignment executed by the heirs of Jimeno in favor of Zosa in consideration of his services is already final and executory. Necessarily, therefore, claimant Zosa has a better right over and above the claim of Barba. Felix Barba interposed an appeal to the Court of Appeals, docketed as CA G.R. CV No. 22941, entitled Director of Lands v. Felix Barba. On January 29, 1992, the Court of Appeals rendered its Decision[5] affirming the Order of the cadastral court. On February 22, 1992, the Decision became final and executory. The records were thus remanded to the cadastral court. On July 3, 1992, the cadastral court issued an Order directing the Director of the Bureau of Lands to issue the corresponding Decree in favor of Atty. Zosa. On November 18, 1992, the Land Registration Commission issued Decree No. N-199584 over Lot 3616 in the name of Atty. Mariano Zosa. Accordingly, on December 9, 1992, Original Certificate of Title (OCT) No. O-203 was issued in his name. As a new owner, he had the property declared in his name for taxation purposes under Tax Declaration No. 50568. On November 30, 1993, petitioners filed with the RTC, Branch 29, Toledo City, a Petition for Review or Reopening of the Decree in LRC Case No. N-3-T[6] entitled Spouses Prisco Cal v. Mariano Zosa, docketed as LRC Case No. 92. Petitioners alleged that respondent Atty. Zosa acquired the Decree through extrinsic fraud; and he failed to adduce evidence to prove his claim. After hearing, or on September 28, 1999, the trial court rendered a Decision[7] dismissing petitioners complaint and declaring that Atty. Zosa is the true and lawful owner of Lot 3616 and OCT No. O-203 was lawfully issued and registered in his name. Petitioners interposed an appeal to the Court of Appeals, docketed as CA G.R. CV No. 65860. On February 11, 2002, the appellate court rendered the assailed Decision[8] holding that:

We do not agree with the appellants. Central to the issue is Section 38 of Act 496, as amended, quoted, infra:

SEC. 38. x x x Such decree shall not be opened by reason of the absence, infancy or other disability of any person affected thereby, nor by any proceeding in any court for reversing judgments or decree, subject, however, to the right of any person deprived of land or of any state or interest therein by decree of registration obtained by fraud to file in the competent Court of First Instance a petition for review within one year after entry of the decree provided no innocent purchaser for value has acquired an interest. x x x (idem, supra)

A re-opening or review of a Decree, issued by the trial court, on the ground of fraud is allowed, provided that the following elements are present, namely:

x x x (1) that the petitioner has real or dominical right; (2) that he has been deprived thereof; (3) through fraud; (4) that the petition is filed within one year from the issuance of the decree; and (5) that the property has not as yet been transferred to an innocent purchaser. (Pascual Libudan v. Heirs of Jose Palma Gil, 45 SCRA 17, at page 27, supra)

Our Supreme Court emphasized in the above case that fraud envisaged in the law is extrinsic or collateral fraud, as distinguished from intrinsic fraud, x x x

The fraud is that which affects and goes into jurisdiction of the court. And the reason detre of the principle is that equity will enjoin a party from enforcing a judgment which he has obtained by means of fraud. Fraud will vitiate a judgment and a court of equity may declare it a nullity. Equity has so great an abhorrence of fraud that it will set aside its own decrees if founded thereupon.Intrinsic fraud, in contrast, does not go into or affect the jurisdiction of the trial court. Where the fraud, alleged or invoked by a losing party, is based on facts which were controverted and litigated by the parties and resolved by the court after due trial, such fraud does not affect the jurisdiction of the court. Whether the resolution of the court on the issue of fraud is correct or not and, in the meantime, the Decision of the court has become final and executory and a Decree had already been issued, the same cannot be impugned in a separate or collateral proceeding. x x x

In the present recourse, the issue of whether or not Felix Barba and his successor-in-interest or the appellee was in actual or constructive possession of the property and the lawful owner of the property was posed to the court a quo for resolution and litigated by the parties. Felix Barba filed his Answer/Claim and adduced evidence. Hence, he was not deprived of an opportunity to oppose the claim of the appellee and adduce evidence in support of his claim. After calibration of the evidence of the parties, the court a quo decreed the property to and under the name of the appellee. The Order of the court a quo was appealed to the Court of Appeals and the latter affirmed the Order of the court a quo x x x

Hence, the present petition raising the following issues:

I. WHETHER OR NOT DECREE NO. N-199584 ISSUED OUT OF CADASTRAL CASE NO. N-2-T, LRC RECORD NO. 585, CADASTRAL CASE 3, TOLEDO CADASTRE, INVOLVING LOT 3616 SITUATED AT BULONGAN, TOLEDO CITY, THAT LED TO THE ISSUANCE OF OCT NO. O-203 IN HEREIN RESPONDENTS NAME, WAS ATTENDED WITH ACTUAL FRAUD WITHIN THE LEGAL CONTEMPLATION OF SECTION 32, PRESIDENTIAL DECREE (P.D.) NO. 1529 (FORMERLY SECTION 38 OF ACT 496) OTHERWISE KNOWN AS THE PROPERTY REGISTRATION DECREE.

II. WHETHER OR NOT PETITIONERS ARE BOUND BY THE JUDGMENT RENDERED IN CA-G.R. CV No. 22941, THUS MAKING THE PROCEEDINGS AT BAR ALREADY BARRED LEGALLY.

In their Comment, the lawful heirs of Atty. Zosa, now herein respondents, maintain that their father did not commit any extrinsic fraud; that petitioners were not deprived of their day in court; that their predecessor, Felix Barba, ably opposed Atty. Zosas claim in the cadastral proceedings; and that their conflicting claims were fully ventilated as they were allowed by the cadastral court to present their respective evidence.

The petition must fail. The right of a person deprived of land or of any estate or interest therein by adjudication or confirmation of title obtained by actual or extrinsic fraud is recognized by law under Section 32 of P.D. No. 1529,[9] thus:

Review of decree of registration; Innocent purchaser for value. The decree of registration shall not be reopened or revised by reason of absence, minority, or other disability of any person adversely affected thereby, nor by any proceeding in any court for reversing judgments, subject, however, to the right of any person, including the government and the branches thereof, deprived of land or of any estate or interest therein by such adjudication or confirmation of title obtained by actual fraud, to file in the proper Court of First Instance (now the Regional Trial Court) a petition for reopening and review of the decree of registration not later than one year from and after the date of the entry of such decree of registration, but in no case shall such petition be entertained by the court where an innocent purchaser for value has acquired the land or an interest therein, whose rights may be prejudiced. x x x (emphasis supplied)

Fraud is of two kinds: actual or constructive. Actual or positive fraud proceeds from an intentional deception practiced by means of the misrepresentation or concealment of a material fact. Constructive fraud is construed as a fraud because of its detrimental effect upon public interests and public or private confidence, even though the act is not done with an actual design to commit positive fraud or injury upon other persons.[10]

Fraud may also be either extrinsic or intrinsic. Fraud is regarded as intrinsic where the fraudulent acts pertain to an issue involved in the original action, or where the acts constituting the fraud were or could have been litigated therein. Fraud is regarded as extrinsic where it prevents a party from having a trial or from presenting his entire case to the court, or where it operates upon matters pertaining not to the judgment itself but to the manner in which it is procured, so that there is not a fair submission of the controversy.[11] Extrinsic fraud is also actual fraud, but collateral to the transaction sued upon.[12] The "fraud" contemplated by Section 32, P.D. No. 1529 is extrinsic. For fraud to justify a review of a decree, it must be extrinsic or collateral, and the facts upon which it is based have not been controverted or resolved in the case where the judgment sought to be annulled was rendered.[13]Thus, relief is granted to a party deprived of his interest in land wherethe fraud consists in a deliberate misrepresentation that the lots are not contested when in fact, they are; or in willfully misrepresenting that there are no other claims; or in deliberately failing to notify the party entitled to notice; or in inducing him not to oppose an application; or in misrepresenting about the identity of the lot to the true owner by the applicant causing the former to withdraw his application. In all these examples, the overriding consideration is that the fraudulent scheme of the prevailing litigant prevented a party from having his day in court or from presenting his case. The fraud, therefore, is one that affects and goes into the jurisdiction of the court.[14]On the other hand, we have repeatedly held that relief on the ground of fraud will not be granted where the alleged fraud goes into the merits of the case, is intrinsic and not collateral, and has been controverted and decided, [15] like what is very much obtaining in the present case. Here, petitioners failed to prove that then respondent Atty. Zosa committed acts constituting extrinsic fraud in obtaining OCT N0. O-203. Indeed, there is no showing how Felix Barba, petitioners predecessors-in-interest, was prevented by the said respondent from presenting his case. WHEREFORE, the petition is DENIED. Costs against petitioners. SO ORDERED.

[G.R. No. L-22312. May 31, 1971.]

ILDEFONSO AGREDA, ET AL., Plaintiffs-Appellants, v. SANTIAGO AGREDA, Defendant-Appellee. Cornelio L. Lauron, for Plaintiffs-Appellants. Nicanor D. Sorongon, for Defendant-Appellee.

SYLLABUS1. LAND REGISTRATION; SECTION 38 OF ACT 496; PETITION FOR REVIEW OF DECREE OF REGISTRATION FILED WITHIN ONE YEAR AFTER ENTRY THEREOF; REMEDY NOT EXCLUSIVE. While We agree with the theory that even after the issuance of the decree of registration the same together with the decision rendered in the case may still be reviewed and set aside upon an application for that purpose filed within one year from the issuance of said decree, pursuant to the provisions of Section 38 of Act 496. We are of the opinion that such remedy is not exclusive of, and does not bar any other to which the aggrieved party, may be entitled. Moreover, if even after the rendition of a decision for the registration of a parcel of land in favor of one party, and the issuance of the decree of registration both may still be reviewed, We can perceive no valid reason to bar an action for reconveyance, such as the one filed below. before the actual issuance of the decree. Whether recourse to an action for reconveyance will amount to a waiver of the remedy provided for in Section 38 of Act 196 is a question that We do not need to decide here.

BARREDO, J. Concurring:chanrob1es virtual 1aw library

1. LAND REGISTRATION; DECREE OF REGISTRATION; RESERVATION TO FILE PROPER ACTION CONSTITUTES PERMISSION TO HAVE CONFLICT BETWEEN PARTIES SETTLED IN SEPARATE ACTION. I concur in the judgment in this case because to my mind, the two points of doubt I have just mentioned have been made academic by the resolution of this Court in G.R. No. L-20690 which, although it denied the petition of appellants to review the decision of the Court of Appeals upholding appellees claim of title and allowed the registration thereof, it made said denial subject to the express reservation of being "without prejudice to a separate action, if proper, against Santiago Agreda" With that reservation which whether properly or improperly made, is now final and irrevocable, any discussion of res adjudicata or lis pendens, is out of the question. So also the timeliness of an action of reconveyance filed before the period of reopening has expired has become insignificant in this case. I take it that such reservation constitutes nothing less than a permission to have the conflict of title between appellants and appellee settled in a separate action independently of what might have been held in respect thereto in the cadastral proceedings, and since it does not appear that appellee took any steps to have such reservation removed, it is now too late for him to complain.

DIZON, J.:On April 1, 1963, appellants filed an action with the Court of First Instance of Iloilo (Civil Case No. 6267) to compel appellee Santiago Agreda to reconvey to them their alleged respective share in Lot 3400 of the cadastral survey of Janiuay, Iloilo. Appellant Ildefonso Agreda claimed ownership of 4/12 thereof, while his co-appellants Socorro, Francisco, Rosario, Armando, Felipe, Antonio, David and Ernesto, all surnamed Habana, claimed ownership of 7/12 of said lot, the remaining 1/12 portion being the only one admitted to belong to appellee.

Within the time for pleading appellee, instead of an answer to the complaint, filed a motion to dismiss it upon the ground that the cause of action stated therein was barred by a prior judgment. After a hearing thereon, the trial court issued the appealed order dismissing the complaint, with costs. Hence, the present appeal based upon the claim that the trial court committed the following errors:jgc:chanrobles.com.ph

"I. THE COURT A QUO ERRED IN HOLDING THAT THE DEFENDANTS MOTION TO DISMISS SHOULD BE CONSIDERED AS BASED ON THE GROUND THAT THERE IS ANOTHER ACTION PENDING BETWEEN THE SAME PARTIES FOR THE SAME CAUSE, OTHERWISE KNOWN AS LIS PENDENS.II. THE COURT A QUO ERRED IN HOLDING THAT THE PRESENT ACTION IS NOT A PROPER ACTION AGAINST SANTIAGO AGREDA.III. THE COURT A QUO ERRED IN HOLDING THAT WHATEVER REMEDIES THE PLAINTIFFS MAY HAVE AGAINST SANTIAGO AGREDA MUST BE EXHAUSTED AND PROSECUTED UNDER SECTION 38 OF ACT 496.IV. THE COURT A QUO ERRED IN DISMISSING THE COMPLAINT."cralaw virtua1aw library

The plea of res judicata relied upon the appellees motion to dismiss was based on the decision of the Court of Appeals in CA-G.R. No. 14477-R promulgated on October 31, 1962. The background facts in relation thereto are the following:chanrob1es virtual 1aw library

In cadastral case No. 85, GLRO Record No. 1563, appellee Santiago Agreda filed an answer claiming ownership of Lot 3400, one of the lots involved in said expediente, while appellants Ildefonso Agreda and Socorro Habana, the latter for herself and on behalf of several co-heirs, filed separate answers making the same claim. After due hearing the cadastral court held that the claimants had failed to prove any registrable title in their favor over Lot 3400 and, as a result, declared it to be public land. On appeal from said decision, the Court of Appeals (CA-G.R. No. 14477-R) rendered judgment reversing the decision of the Court of First Instance and declaring cadastral lot 3400 as the property of Santiago Agreda. The State, Ildefonso Agreda and other parties appealed from said decision by filing with this Court the corresponding petition for review, but their petition was dismissed (G.R. No. L-20690) "without prejudice to a separate action, if proper, against Santiago Agreda." This reservation was obviously in relation to any right that Ildefonso Agreda and others might have to institute an action against Santiago Agreda to recover from him what they claimed to be their share in Lot 3400.

Our resolution of dismissal became executory on March 23, 1963. So did the decision of the Court of Appeals. Upon the return of the record to the court of origin, the latter, on June 7, 1963 issued an order directing the Commissioner of the Land Registration Commission to issue the corresponding decree of registration for Lot 3400 in the name of Santiago Agreda.

Inasmuch as the action for reconveyance (Civil Case No. 6267) was filed with the Court of First Instance of Iloilo on April 1, 1963 more than two months before the order directing the issuance of the decree of registration said court held that, at that time, the one year period provided for in Section 38 of Act 496, as amended, within which a petition for review of the decree of registration could be filed had not yet expired; that as the adjudication of land in an ordinary registration or cadastral proceeding does not become final and incontrovertible until the expiration of the aforesaid one year period, appellants herein, instead of filing the action for reconveyance, should have exhausted their remedies in the cadastral proceeding by filing the corresponding petition to set aside the decision therein rendered in favor of Santiago Agreda, and of the decree of registration, if any had been issued, and pray for the adjudication of the land to them, pursuant to the ruling in Afable v. Rosario, 60 Phil. 622; Capio v. Capio, 50 O.G., p. 137, January 1954. The trial court further held that the decision rendered in the cadastral proceeding mentioned heretofore, while not having the authority of res judicata because, as between the case where it was rendered, on the one hand, and the reconveyance case, on the other, there was no complete identity of parties, subject matter and causes of action, still such decision could be invoked as basis for the plea of lis pendens that there was another action pending between the same parties upon the same subject matter and cause of action. Upon these grounds, the trial court, as already stated, sustained appellees motions and dismissed the case.

We are unable to accept the trial courts view. While We agree with the theory that even after the issuance of the decree of registration the same together with the decision rendered in the case may still be reviewed and set aside upon an application for that purpose filed within one year from the issuance of said decree, pursuant to the provisions of Section 38 of Act 496, We are of the opinion that such remedy is not exclusive of, and does not bar any other to which the aggrieved party may be entitled. Moreover, if even after the rendition of a decision for the registration of a parcel of land in favor of one party, and the issuance of the decree of registration, both may still be reviewed, We can perceive no valid reason to bar an action for reconveyance, such as the one filed below, before the actual issuance of the decree. Whether recourse to an action for reconveyance will amount to a waiver of the remedy provided for in Section 38 of Act 496 is a question that We do not need to decide here.

The action for reconveyance filed by appellants in the instant case is based upon the facts alleged in their complaint. They purport to show that appellee Santiago Agreda is a mere trustee of his co-heirs in respect to their share in Lot 3400. As alleged, it would seem that they are sufficient to constitute a cause of action against appellee. Of course, whether appellants will be able to establish them with competent evidence during the trial is, a different matter. Our view, however, is that appellants action should be allowed to continue and take its course until final judgment instead of it being dismissed on the ground that (a) there is another action pending between the same parties upon the same cause of action, and that (b) appellants should first attempt to enforce their right in the cadastral proceeding through a petition for review of the decree of registration pursuant to Section 38 of Act 496.

PREMISES CONSIDERED, the order of dismissal appealed from is set aside, and the present case is remanded to the court of origin for further proceedings. With costs.

Concepcion, C.J., Reyes, J.B.L., Makalintal, Zaldivar, Villamor and Makasiar, JJ., concur.

Castro and Teehankee, JJ., took no part.

Separate OpinionsBARREDO, J., concurring:chanrob1es virtual 1aw library

Upon the facts stated in the main opinion, I am not ready to subscribe to the view that the plea of litis pendentia of appellee is without legal basis. Should it be absolutely necessary to pass on this point, I would be more inclined to sustain that the principle of litis pendentia should apply in respect to cadastral and ordinary land registration cases up to the expiration of the one year period for reopening, specially when the second action or proceeding is predicated on a ground which can be a ground for reopening. Neither am I prepared to hold, as the main opinion does, that an action for reconveyance may be filed even before the said period for reopening has expired, particularly, also when the prayer for reconveyance is based on a ground which can be a ground for reopening. It seems to me incongruous that a party should sue for reconveyance of a title which, after all, he may still secure for himself in a more appropriate proceeding within the land registration case itself. Accordingly, I would rather reserve my opinion on these two questions. Nevertheless, I concur in the judgment in this case because to my mind, the two points of doubt I have just mentioned have been made academic by the resolution of this Court in G.R. No. L-20690 which, although it denied the petition of appellants to review the decision of the Court of Appeals upholding appellees claim of title and allowed the registration thereof, it made said denial subject to the express reservation of being "without prejudice to a separate action, if proper, against Santiago Agreda." With that reservation which, whether properly or improperly made, is now final and irrevocable, any discussion of res adjudicata or lis pendens, is out of the question. So also the timeliness of an action of reconveyance filed before the period of reopening has expired has become insignificant in this case. I take it that such reservation constitutes nothing less than a permission to have the conflict of title between appellants and appellee settled in a separate action independently of what might have been held in respect thereto in the cadastral proceedings, and since it does not appear that appellee took any steps to have such reservation removed, it is now too late for him to complain.

Fernando, J., concurs.

VDA. DE RETUERTO vs. BARZ, G.R. No. 148180 December 19, 2001FACTS:Petitioners are the heirs of Panfilo Retuerto, while respondents are the heirs of Pedro Barz whois the sole heir of Juana Perez Barz. Juana Perez Barz was the original owner of Lot No. 896having an area of 13,160 square meters. Before her death on April 16, 1929, Juana Perezexecuted a Deed of Absolute Sale in favor of Panfilo Retuerto over a parcel of land, identified asLot No. 896-A, a subdivision of Lot No. 896, with an approximate area of 2,505 square meters.On July 22, 1940, the Court issued an Order directing the Land Registration Commission for theissuance of the appropriate Decree in favor of Panfilo Retuerto over the said parcel of land.However, no such Decree was issued as directed by the Court because, by December 8, 1941,the Second World War ensued in the Pacific. However, Panfilo failed to secure the appropriatedecree after the war.Sometime in 1966, Pedro Barz, as the sole heir of Juana Perez, filed and application, with thethen CFI of Cebu for the confirmation of his title over Lot 896 which included the Lot sold toPanfilo Retuerto. The Court ruled in his favor declaring him the lawful owner of the saidproperty, and thus Original Certificate of Title No. 521 was issued. Lot No. 896-A however wascontinuously occupied by the petitioners. Thus, a confrontation arose and as a resultrespondents filed an action on September 5, 1989 for Quieting of Title, Damages and Attorneys Fees. In their answer, petitioners claimed that they were the owners of a portion of the lot which was registered under the name of Pedro Barz and therefore the issuance of theOriginal Certificate of Title in Pedro Barzs name did not vest ownership but rather it merelyconstituted him as a trustee under a constructive trust. They further contend that Pedro Barzmisrepresented with the land registration court that he inherited the whole lot therebyconstituting fraud on his part.ISSUE:The creation of constructive trust and whether Pedro Barz committed fraud bymisrepresenting in the land registration court that he inherited the whole lot.DECISION:Constructive trusts are created in equity to prevent unjust enrichment, arisingagainst one who, by fraud, duress or abuse of confidence, obtains or holds the legal right toproperty which he ought not, in equity and good conscience, to hold. Petitioners failed tosubstantiate their allegation that their predecessor-in-interest had acquired any legal right to theproperty subject of the present controversy. Nor had they adduced evidence to show that thecertificate of title of Pedro Barz was obtained through fraud.Even assuming arguendo that Pedro Barz acquired title to the property through mistake or fraud, petitioners are nonetheless barred from filing their claim of ownership. An action for reconveyance based on an implied or constructive trust prescribes within ten years from thetime of its creation or upon the alleged fraudulent registration of the property. Since registrationof real property is considered a constructive notice to all persons, then the ten-year prescriptiveperiod is reckoned from the time of such registering, filing or entering. Thus, petitioners shouldhave filed an action for reconveyance within ten years from the issuance of OCT No. 521 inNovember 16, 1968. This, they failed to do so

Pino vs. CA

G.R. No. 94114

June 19, 1991

FACTS: The decision of the CA affirming in toto the decision of the RTC of Echague, Isabela is now being assailed in the instant petition for certiorari.

Lot 6 was acquired by the spouses Juan Gaffud and Rafaela Donato. Juan Gaffud died in 1936. On Jan. 11, 1938, Lot 6 was originally registered (OTC No. 4340) in the Registration Book of the Office of the RD in the names of Rafaela, Raymundo and Cicero Gaffud (sons of spouses) as co-owners, . The said lot was sold to Rafaela Donato through a Deed of Transfer which cancelled OTC NO. 4340 and in lieu thereof a TCT was issued in the name of Rafaela alone.

On Feb. 1967, Rafaela sold a portion of Lot 6 in favor in Fortunato Pascua. The aforesaid sale caused the subdivision of the said lot into Lot-6-A and Lot-6-B. Upon registration of said sale in favor of Pascua, TCT No. T-32683 was issued in the name of Rafaela Donato on March 2, 1967 covering the land designated as Lot 6-B.

On Jun. 10, 1970, Rafaela Donato sold to petitioner Felicisima Pino said Lot-6-B as evidenced by the Deed of Absolute Sale which was duly notarized. Rafaela undertook to register said Deed with the RD of Isabela and on July 13, 1970, the sale was inscribed therein and a TCT was issued in the name of Felicisima Pino.

On Sept. 1980, Cicero Gaffud died survived by his wife Demetrian and sons Romulo and Adolfo, private respondents herein.

On March 9, 1982, private respondents filed a complaint for nullity of sale and reconveyance against petitioner Felicisima Pino. (During the pendency of the case before the trial court, Rafaela Donato, who was not a party to the case, died on November her 26, 1982.)

The RTC ruled and this was sustained by respondent CA that petitioner Pino is not a purchaser in good faith, so (a) the Deed of Absolute Sale made by Rafaela in favor of Pino null and void insofar as the shares of Cicero and Raymundo are concerned, (b) cancellation of TCT No. 49380 in the name of Pino and (c) reconvey one-half of Lot-6-B to plaintiffs withing 10 days.

ISSUE:

1. WON Felicisima Pino is a purchaser in good faith2. WON the filing of an action for reconveyance has already prescribedHELD:1. The rule applicable to this controversy is well-settled. Where the certificate of title is in the name of the vendor when the land is sold, the vendee for value has the right to rely on what appears on the certificate of title. In the absence of anything to excite or arouse suspicion, said vendee is under no obligation to look beyond the certificate and investigate the title of the vendor appearing on the face of said certificate.

In the case at bar, the evidence on record discloses that when petitioner purchased the subject property on June 10, 1970, the title was in the name of her vendor Rafaela Donato alone.

There was no allegation, and much less any evidence, that the transfer of the subject property from the original owners (Rafaela, Cicero and Raymundo) to Rafaela Donato was fraudulent.

3. TCT No. T-32683 was issued in the name of Rafaela Donato on March 2, 1967. The present action for reconveyance was filed only on March 9, 1982. Clearly then, the action has already prescribed because it was filed fifteen (15) years after the issuance of TCT No. T-32683

If an action for reconveyance based on constructive trust cannot reach an innocent purchaser for value, the remedy of the defrauded party is to bring an action for damages against those who caused the fraud or were instrumental in depriving him of the property. And it is now well-settled that such action prescribes in ten years from the issuance of the Torrens Title over the property. (Armerol v. Bagumbaran, 154 SCRA 396, 407; Caro v. Court of Appeals, 180 SCRA 401, 407; Walstron v. Mapa, Jr., 181 SCRA 431, 442).

[G.R. No. 143281. August 3, 2000]

SPOUSES FRANCISCO and AMPARO DE GUZMAN, JR., petitioners, vs. THE NATIONAL TREASURER OF THE REPUBLIC OF THE PHILIPPINES and THE REGISTER OF DEEDS OF MARIKINA CITY, respondents.R E S O L U T I O NKAPUNAN, J.:

Petitioners De Guzman spouses seek the reversal of the decision of the Court of Appeals holding that the Assurance Fund established under the Property Registration Decree is not liable for the losses allegedly sustained by petitioners.

The facts that led to the present proceedings are succinctly set forth by the Court of Appeals as follows:

On 01 July 1985, Urlan Milambiling and Asuncion Velarde purchased a parcel of land situated in Antipolo, Rizal from Sta. Lucia Realty and Development, Inc. Although they were already civilly married, Asuncion used her maiden name in the Deed of Sale because, being conservative, she did not want to use her married name until she was married in church.

After their church wedding on 05 July 1985, Urlan and Asuncion Milambiling left for Europe on their honeymoon and from there, they proceeded to Saudi Arabia where they were working as accountant and nurse, respectively.

Before leaving for abroad, the spouses Milambiling entrusted the Deed of Sale of the parcel of land they bought from Sta. Lucia Realty and the corresponding Certificate of Title still in the name of Sta. Lucia Realty to a long-time friend and one of their principal wedding sponsors, Marilyn Belgica, who volunteered to register the sale and transfer the title in their names.

Later, the spouses Milambiling learned from Belgica through an overseas telephone call that a transfer certificate of title of the said parcel of land had already been issued in their names. Belgica committed to the Milambiling spouses that she will personally deliver the title to them in Saudi Arabia. Sometime in May 1986, Belgica arrived in Saudi Arabia but the title was not with her. Belgica said that she left it in their house in the Philippines and forgot to bring it with her.

Urlan Milambiling was angry and immediately called up his relatives in the Philippines and asked them to find out from the Office of the Register of Deeds of Rizal what happened to their title. He was informed that the Certificate of Title covering the said parcel of land had indeed been transferred in their names but was subsequently cancelled and title transferred in the names of x x x the spouses De Guzman.

Milambiling was also told about the circumstances that led to the cancellation of their title. It appears that while the spouses Milambiling were in Saudi Arabia, a couple identifying themselves as the spouses Urlan and Asuncion Milambiling went to the house of a certain Natividad Javiniar, a real estate broker, inquiring if the latter could find a buyer for their lot located in Vermont Subdivision, Antipolo, Rizal. Javiniar accompanied the said couple to the house of [the] spouses De Guzman. Having somehow obtained possession of the owners duplicate copy of the certificate of title in the name of the spouses Milambiling, the impostor-couple were able to convince the de Guzmans to buy the property. On 20 November 1985, the impostor-couple, posing as the spouses Milambiling, executed a Deed of Absolute Sale in favor of [the] spouses de Guzman who paid the stipulated purchase price of P99,200.00. On 30 April 1986, [the De Guzmans] registered the said sale with the Register of Deeds of Marikina who cancelled the certificate of title in the name of the Milambilings and issued TCT No. N-117249 in the names of [the] De Guzman[s].

Upon learning of the above, Urlan Milambiling quickly returned to the Philippines. On 24 July 1986, the spouses Milambiling filed an action against [the spouses De Guzman] before the Regional Trial Court of Antipolo, Rizal, Branch 73, for declaration of nullity of sale and title with damages.

x x x

[The] spouses De Guzman appealed the decision of the trial court to the Court of Appeals. On 18 July 1991, [the Court of Appeals] rendered its decision affirming the decision of the court a quo.

[The] spouses De Guzman then went to the Supreme Court on a petition for review on certiorari. On 01 July 1992, the High Tribunal issued a resolution denying the petition on the ground that no reversible error was committed by the Court of Appeals.

On 11 February 1993, [the] spouses De Guzman filed [an] action for damages against the Assurance Fund before the Regional Trial Court of Pasig, Branch 153[,] [impleading the National Treasurer of the Republic of the Philippines and the Register of Deeds of Marikina City.][1]

On January 20, 1995, the RTC rendered its decision finding in favor of the De Guzman spouses, thus:

IN VIEW OF THE FOREGOING, judgment is hereby rendered in favor of the plaintiffs and against the defendants adjudging the Assurance Fund liable to the amount actually paid by the plaintiffs which is in the amount of P99,200.00 and ordering the defendants Treasurer and/or Registrar to pay or cause the payment of the said amount to herein plaintiffs.

SO ORDERED.[2]

The National Treasurer and the Marikina Registrar of Deeds appealed from the above decision. The Court of Appeals found merit in the appeal and reversed the decision of the RTC.

We affirm the decision of the Court of Appeals.

Section 95 of Presidential Decree No. 1529, otherwise known as the Property Registration Decree, provides:

SEC. 95. Action for compensation from funds. A person who, without negligence on his part, sustains loss or damage, or is deprived of land or any estate or interest therein in consequence of the bringing of the land under the operation of the Torrens system or arising after original registration of land, through fraud or in consequence of any error, omission, mistake or misdescription in any certificate of title or in any entry or memorandum in the registration book, and who by the provisions of this Decree is barred or otherwise precluded under the provision of any law from bringing an action for the recovery of such land or the estate or interest therein, may bring an action in any court of competent jurisdiction for the recovery of damage to be paid out of the Assurance Fund.

The precursor of Section 95, Section 101 of the Land Registration Act (Act No. 496), similarly states:

SEC. 101. Any person who without negligence on his part sustains loss or damage through any omission, mistake or misfeasance of the clerk, or register of deeds, or of any examiner of titles, or of any deputy or clerk of the register of deeds in the performance of their respective duties under the provisions of this Act, and any person who is wrongfully deprived of any land or any interest therein, without negligence on his part, through the bringing of the same under the provisions of this Act or by the registration of any other persons as owner of such land, or by any mistake, omission, or misdescription in any certificate or owners duplicate, or in any entry or memorandum in the register or other official book, or by any cancellation, and who by the provisions of this Act is barred or in any way precluded from bringing an action for the recovery of such land or interest therein, or claim upon the same, may bring in any court of competent jurisdiction an action against the Treasurer of the Philippine Archipelago for the recovery of damages to be paid out of the Assurance Fund.

It may be discerned from the foregoing provisions that the persons who may recover from the Assurance Fund are:

1) Any person who sustains loss or damage under the following conditions:

a) that there was no negligence on his part; and

b) that the loss or damage sustained was through any omission, mistake or malfeasance of the court personnel, or the Registrar of Deeds, his deputy, or other employees of the Registry in the performance of their respective duties under the provisions of the Land Registration Act, now, the Property Registration Decree; or

2) Any person who has been deprived of any land or interest therein under the following conditions:

a) that there was no negligence on his part;

b) that he was deprived as a consequence of the bringing of his land or interest therein under the provisions of the Property Registration Decree; or by the registration by any other person as owner of such land; or by mistake, omission or misdescription in any certificate of owners duplicate, or in any entry or memorandum in the register or other official book or by any cancellation; and

c) that he is barred or in any way precluded from bringing an action for the recovery of such land or interest therein, or claim upon the same.[3]

The Court of Appeals correctly held that petitioners circumstances do not fall under the first case. Petitioners have not alleged that the loss or damage they sustained was through any omission, mistake or malfeasance of the court personnel, or the Registrar of Deeds, his deputy, or other employees of the Registry in the performance of their respective duties. Moreover, petitioners were negligent in not ascertaining whether the impostors who executed a deed of sale in their (petitioner's) favor were really the owners of the property.[4]

Nor does petitioners situation fall under the second case. They were not deprived of their land as a consequence of the bringing of [the] land or interest therein under the provisions of the Property Registration Decree. Neither was the deprivation due to the registration by any other person as owner of such land, or by mistake, omission or misdescription in any certificate or owners duplicate, or in any entry or memorandum in the register or other official book or by any cancellation.

Petitioners' claim is not supported by the purpose for which the Assurance Fund was established. The Assurance Fund is intended to relieve innocent persons from the harshness of the doctrine that a certificate is conclusive evidence of an indefeasible title to land.[5] Petitioners did not suffer any prejudice because of the operation of this doctrine. On the contrary, petitioners sought to avail of the benefits of the Torrens System by registering the property in their name. Unfortunately for petitioners, the original owners were able to judicially recover the property from them. That petitioners eventually lost the property to the original owners, however, does not entitle them to compensation under the Assurance Fund. While we commiserate with petitioners, who appear to be victims of unscrupulous scoundrels, we cannot sanction compensation that is not within the law's contemplation. As we said in Treasurer of the Philippines vs. Court of Appeals,[6] the Government is not an insurer of the unwary citizens property against the chicanery of scoundrels. Petitioners recourse is not against the Assurance Fund, as the Court of Appeals pointed out, but against the rogues who duped them.

ACCORDINGLY, the petition is DENIED.

Davide, Jr., C.J., (Chairman), Puno, Pardo, and Ynares-Santiago, JJ., concur.

G.R. No. 92557September 27, 1990

SPOUSES HADJI ALI MAMADSUAL and HADJI SALIKA MAMADSUAL, petitioners, vsHON. COROCOY D. MOSON, SPOUSES KAGUI ABDULA MACARAPAN and KAGUI RAKMA MACARAPAN and REGISTER OF DEEDS OF COTABATO respondents.

Lanang S. Ali for petitioners.

GANCAYCO, J.:

The applicability of the regular rules of procedure and case law in this jurisdiction to civil cases before the District Shari'a Courts is the issue in this petition.

On November 14, 1988, petitioner-spouses filed a complaint against private respondents for "Quieting of Title To Property, Annulment of Original Certificates of Title Nos. P-122 and P-138, and Damages, With Application for Writ of Preliminary Injunction" with the Shari'a District Court, 5th Shari'a District at Cotabato City. Public respondent Register of Deeds of the same city was impleaded as a nominal party.

Private respondents filed their answer dated December 1, 1988.

The issues having been joined, a pre-trial conference was held on March 14, 1989 whereby Presiding Judge Hon. Corocoy D. Moson issued a pre-trial order defining the issues and directing the parties to submit statements (shudhud) of at least two (2) competent witnesses on the issues defined at the pre-trial conference and other evidence (bayyina) setting forth the facts and the law relied upon within ten (10) days from notice.

Petitioners filed the required sworn statements on April 17, 1989 but private respondents failed to do so.

The case was set for trial on the merits on May 22, 1989 but it was postponed at the instance of private respondents. Other settings were postponed for one reason or another. However, on July 4, 1989, private respondents filed a pleading designated as "Amplification of Affirmative or Special Defenses with Prayer for Dismissal of Complaint On the Ground of Lack of Jurisdiction." On the basis thereof, the trial court issued an order on November 7, 1989 dismissing the complaint in this manner:

Before this Court, is a motion filed by defendants, through their counsel, for amplification of affirmative or special defenses with prayer for dismissal of the complaint on the following grounds: (1) That plaintiffs have no title to the property which is the subject of this suit, hence, their action to quiet title thereto is not proper; (2) that plaintiffs, are not the proper parties to ask for the annulment or cancellation of the certificates of title of the defendants and (3) that the action, being based on an implied trust, has already prescribed and could not therefore be maintained.

Plaintiffs, through their counsel, vigorously opposed the motion, and in a nutshell, their opposition may be stated as follows: (1) On the issue of no title to the property which is the subject-matter of the case, plaintiffs contended that the title referred to by them in the complaint means the legal title or ownership or dominion over the land in dispute acquired by them from their ancestors by operation of the law on succession; (2) On the question of proper parties to ask for annulment, plaintiffs contended that they are real party in interest because they will be benefited by the judgment or entitled to the avails of the suit in their own right, independent of any other interest, but with the authority of the law; and (3) on the question of prescription, plaintiffs contended that since they are in possession of the land, an action to quiet title does not prescribe.

Perusing the case from all angles, and without losing track of the brilliant arguments presented by both parties during the legal skirmishes the court finds that in order that an action for quieting of title shall prosper, it is necessary that the plaintiff must have legal or equitable title to the property which is the subject-matter of the action. On this score, the Civil Code of the Philippines provides:

"The plaintiff must have legal or equitable title to, or interest in the real property which is the subject-matter of the action. He need not be in possession of said property." (Art. 477, Civil Code of the Philippines).

In the case at bar, plaintiffs have no legal or equitable title to the land in question. Legal title means registered ownership and equitable title meant beneficial ownership. Since the plaintiffs have no legal or equitable title to the parcels of land in question, it is obvious that there is no cloud to be removed or to be prevented from being cast upon. The voice of judicial conscience calls for the dismissal of the instant action.

Dwelling on the second question, even assuming for a moment that the action is for annulment of the certificates of title, the court finds that the plaintiffs are not the proper parties to bring the action, but rather the Solicitor General. And even assuming further that the plaintiffs are the proper parties, the action has already prescribed because the action partakes of the nature of reconveyance which prescribes after ten years. The argument that the action has not prescribed because plaintiffs are in possession of the property does not merit the consideration of the court. That argument holds true only if plaintiffs have the legal or equitable title to the property.

WHEREFORE, in the light of the foregoing, the above-entitled case is hereby ordered DISMISSED for lack of jurisdiction and cause of action. 1

A motion for reconsideration filed by petitioners of said order was denied by the trial court in an order dated January 29, 1990 that reads as follows:

Submitted for resolution by this Court is the Motion by plaintiffs seeking reconsideration of the Order rendered on November 7, 1989, which order dismissed this case "for lack of jurisdiction and cause of action."

The motion asserts that the aforementioned order "has no legal basis on the following grounds:

a)That the Honorable Court has jurisdiction to hear and decide the (case) on the merits;

b)That the complaint has sufficient cause of action; and

c)That the dismissal of the complaint is illegal."

The first ground implies that this court is without alternative except to hear the case on the merits. This assertion has no legal leg to stand on, it being well-settled that the courts have the power to dismiss cases before them upon a finding that they have no jurisdiction over them or have lost the same, and that the act of dismissing the cases on that basis is a valid exercise of jurisdiction. Despite the lack or loss of jurisdiction the order of dismissal is nevertheless valid.

On the second ground, the best test of the sufficiency of the cause of action is the allegation in the complaint. The title over the land is registered in the names of the defendants, and the annulment or cancellation thereof is legally possible only through an action for reversion by the state. If the case would be treated as one for reconveyance of title, the period within which the same could be brought had already prescribed.

As regards the third ground, the defendants, in their opposition to the Motion, cited the case of Heirs of Olivas vs. Judge Flor, G.R. 78343, decided on May 21, 1988, in which the Supreme Court held that a motion to dismiss filed after the answer had already been submitted within the reglementary period is not the pleading prohibited by the Rules on Summary Procedure, and what the Rule proscribes is a motion to dismiss which would stop the running of the period to file an answer and cause undue delay. As observed by the defendants, Section 13 of the Ijra-at-al Mahakim Al Sharia's is lifted from the provisions of the Rules on Summary Procedure.

WHEREFORE, finding no cogent and compelling reason to reconsider the Order of November 7, 1989, this Court hereby affirms the same and further denies plaintiffs' Motion for Reconsideration.

SO ORDERED. 2

Hence, the herein petition for review on certiorari wherein petitioners allege the following assignment of errors committed by the trial court:

ASSIGNMENT OF ERRORS

I.THAT THE LOWER COURT ERRED IN ORDERING THE DISMISSAL OF THE COMPLAINT, SUCH ORDER HAVING DEPARTED FROM THE SPECIAL RULES OF PROCEDURE GOVERNING THE SHARI'A COURTS (IJRA-AT AL MAHAKIM AL SHARI'A);

II.THAT THE LOWER COURT ERRED IN RULING THAT IT HAS NO JURISDICTION TO HEAR THE COMPLAINT ON THE GROUNDS THAT THE PLAINTIFFS ARE NOT THE PROPER PARTIES TO BRING THE ACTION AND/OR THE ACTION HAS PRESCRIBED; AND

III.THAT THE LOWER COURT ERRED IN RULING THAT THE COMPLAINT HAS NO CAUSE OF ACTION ON THE GROUND THAT THE PLAINTIFFS HAVE NO LEGAL OR EQUITABLE TITLE TO THE LAND IN QUESTION. 3

Petitioners allege that the lower court should not have considered private respondents' pleading which was in effect, a motion to dismiss, as it is a pleading disallowed under Section 13 of the Ijra-At Al Mahakim Al Shari'a.

However, under Section 16 of the Ijra-At Al Mahakim Al Shari'a, it is specifically provided that the "Rules of Court shall apply in a suppletory manner" in civil cases. Section 5, Rule 16 of the Rules of Court provides as follows:

SEC. 5.Pleading grounds as affirmative defenses. Any of the grounds for dismissal provided for in this rule, except improper venue, may be pleaded as an affirmative defense, and a preliminary hearing may be had thereon as if a motion to dismiss had been filed.

From the foregoing, it is clear the trial court properly set the case for hearing on the affirmative defenses seeking dismissal of the complaint raised by the private respondents in their answer. What the Ijra-At Al Mahakim Al Shari'a proscribes is the filing of a motion to dismiss in lieu of an answer which would stop the running of the period to file an answer and cause undue delay. The prohibition is intended to put a stop to the filing of dilatory pleadings with the end in view of expediting proceedings before Shari'a courts.

The case of Heirs of Ricardo Olivas vs. Flor 4 involves the application of the Rules of Summary Procedure in special cases before the Metropolitan and Municipal Circuit Trial Courts. The said Rules disallow the filing of motions to dismiss, wherein this Court held:

In the guise of a position paper, private respondents filed a Motion to Dismiss. While this is, indeed, a prohibited pleading (Section 15(1), Rule on Summary Proceeding) it should be noted that the motion was filed after an Answer had already been submitted within the reglementary period. In essence, therefore, it is not the pleading prohibited by the Rules on Summary Procedure. What the rule proscribes is a Motion to Dismiss, which would stop the running of the period to file an Answer and cause undue delay.

Nevertheless, the Court finds the petition to be impressed with merit.

The lower court dismissed the complaint on the ground that the action had prescribed. The said court also observed that inasmuch as it is one for reversion to the state of the property, the same should be brought by the Solicitor General and not by the petitioners.

The Court disagrees. A reading of the complaint shows that it is an action for quieting title. Therein, it is alleged that petitioners are in "actual, continuous, and adverse possession" of the land in question "since time immemorial" in the concept of owners. 5

An action to quiet title is imprescriptible if the plaintiffs are in possession of the property. 6 In Sapto, et al. vs. Fabiana, 7 this Court held:

. . . it is an established rule of American jurisprudence (made applicable in this jurisdiction by Art. 480 of the New Civil Code) that actions to quiet title to property in the possession of the plaintiff are imprescriptible (44 Am. Jur. p. 47; Cooper vs. Rhea, 39 L.R.A. 930; Inland Empire Land Co. vs. Grant County, 138 Wash. 439, 245 Pac. 14).

The prevailing rule is that the right of a plaintiff to have his title to land quieted, as against one who is asserting some adverse claim or lien thereon, is not barred while the plaintiff or his grantors remain in actual possession of the land, claiming to be owners thereof, the reason for this rule being 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 in his favor 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 to an action to remove a cloud from title can only be invoked by a complainant when he is in possession. One who claims property which is in the possession of another must, it seems, invoke his remedy within the statutory period. (44 Am. Jur. p. 47)

In the same complaint, petitioners allege that recently private respondents have disturbed their possession of the property by surreptitiously constructing dikes. 8 The rule is that the petitioners may wait until their possession is disturbed or their title is attacked before they may take steps to vindicate their right. The statute of limitation is not available as a defense to an action to remove a cloud from title over property in possession of the petitioners.

The trial court held that in an action to quiet title the plaintiff "must" have legal or equitable title to, or interest in the real property which is the subject matter of the action. 9 It interpreted legal title to mean registered ownership and equitable title to mean beneficial ownership.

It is not necessary that th