FELICIANO vs.

ZALDIVAR
G.R. No. 162593
September 26, 2006
FACTS: Feliciano filed against the spouses Aurelio and Luz Zaldivar a complaint for
declaration of nullity of Transfer Certificate of Title and reconveyance of the subject
property in Cagayan de Oro City. The said title is registered in the name of Aurelio
Zaldivar.
In her complaint,Feliciano alleged that she was the registered owner of a parcel of land
covered by a TCT. Sometime in 1974, Aurelio, allegedly through fraud, was able to
obtain a TCT covering the portion of Felicianos lot as described in her TCT.
According to Feliciano, the subject lot was originally leased from her by Pio Dalman,
Aurelios father-in-law. She further alleged that she was going to mortgage the subject
lot to Ignacio Gil which however, did not push through because Gil took back the money
without returning the receipt she had signed as evidence of the supposed mortgage
contract. Thereafter, in 1974, Aurelio filed with the then CFI of Misamis Oriental a
petition for partial cancellation of theTCT in Felicianos name. It was allegedly made to
appear therein that Aurelio and his spouse Luz acquired the subject lot from Dalman
who, in turn, purchased it from Gil. The petition was granted and a TCT was issued in
Aurelios name.
Remegia denied that she sold the subject lot either to Gil or Dalman. She likewise
impugned as falsified the joint affidavit of confirmation of sale that she and her uncle,
Narciso Labuntog, purportedly executed before a notary public, where Remegia
appears to have confirmed the sale of the subject property to Gil. She alleged that she
never parted with the certificate of title and that it was never lost. As proof that the sale
of the subject lot never transpired, Remegia pointed out that the transaction was not
annotated on her TCT.
In their answer, the spouses Zaldivar denied the material allegations in the complaint
and raised the affirmative defense that Aurelio is the absolute owner and possessor of
the subject lot as evidenced by his TCT and Tax Declaration covering the same. Aurelio
claimed that he acquired the subject lot by purchase from Dalman who, in turn, bought
the same from Gil on April 4, 1951. Gil allegedly purchased the subject lot from
Remegia and this sale was allegedly conformed and ratified by the latter and her uncle,
Narciso Labuntog, before a notary public on December 3, 1965.
After Aurelio obtained a loan from the GSIS, the spouses Zaldivar constructed their
house on the subject lot. They alleged that they and their predecessors-in-interest had
been occupying the said property openly, publicly, adversely and continuously for over
41 years already. Aurelio filed a petition for the issuance of a new owners duplicate
copy of because when he asked Remegia about it, the latter claimed that it had been
lost.
The RTC rendered judgment in favor of Remegia. On appeal, the CA reversed the
decision of the RTC and ruled in favor of the spouses Zaldivar. When their MR was
denied by the CA, the heirs of Feliciano (the petitioners) sought recourse to the Court in
their petition for review.
ISSUE: WON the CA erred:
1. in ruling that the court who ordered the issuance of new certificate of title despite
existence of owners duplicate copy that was never lost has jurisdiction over the case.

2. in concluding that the respondents (defendants-appellants) are the absolute owners

of the subject lot based on the TCT issued to them.
3. in concluding that petitioners claim of ownership over the subject lot was barred by
estoppel or laches.

HELD: WHEREFORE, the petition is GRANTED. The Decision of the CA are

REVERSED and SET ASIDE. The Decision RTC of Cagayan de Oro City is
REINSTATED with the MODIFICATION that petitioners are likewise ordered to exercise
the option under Article 448 of the Civil Code.
1. YES. As the trial court correctly held, the CFI which granted respondent Aurelios
petition for the issuance of a new owners duplicate copy did not acquire jurisdiction to
issue such order. It has been consistently ruled that when the owners duplicate
certificate of title has not been lost, but is in fact in the possession of another person,
then the reconstituted certificate is void, because the court that rendered the decision
had no jurisdiction. Reconstitution can validly be made only in case of loss of the
original certificate. In such a case, the decision authorizing the issuance of a new
owners duplicate certificate of title may be attacked any time
2. YES. The court a quo correctly nullified the TCT in Aurelios name, emanating as it
did from the new owners duplicate, which Aurelio procured through fraud.
The appellate courts reliance on the joint affidavit of confirmation of sale purportedly
executed by Remegia and her uncle, Narciso Labuntog, is not proper. In the first place,
respondent Aurelio cannot rely on the joint affidavit of confirmation of sale to prove
that they had validly acquired the subject lot because, by itself, an affidavit is not a
mode of acquiring ownership. Moreover, the affidavit is written entirely in English,
the hearing revealing that Feliciano does not understand English.
On this point, Article 1332 of the Civil Code is relevant:
ART.1332. When one of the parties is unable to read, or if the contract is in a language
not understood by him, and mistake or fraud is alleged, the person enforcing the
contract must show that the terms thereof have been fully explained to the former.
If the person enforcing the contract fails to discharge this burden, the presumption of
mistake, if not, fraud, stands unrebutted and controlling. The bare statement of Atty.
Velez (testified for the Zaldivar spouses) that he read and interpreted the document to
the affiants and that he asked them as to the correctness of its contents does not
necessarily establish that Remegia actually comprehended or understood the import of
the joint affidavit of confirmation of sale
In a long line of cases, the Court has consistently ruled that lands covered by a title
cannot be acquired by prescription or adverse possession. A claim of acquisitive
prescription is baseless when the land involved is a registered land.
Moreover, respondent Aurelio cannot raise the defense of indefeasibility of [his] title
because the principle of indefeasibility of a Torrens title does not apply where fraud
attended the issuance of the title. The Torrens title does not furnish a shield for fraud.
As such, a title issued based on void documents may be annulled.
3. As registered owners of the lots in question, the private respondents have a right to
eject any person illegally occupying their property. This right is imprescriptible. Even if it
be supposed that they were aware of the petitioners occupation of the property, and
regardless of the length of that possession, the lawful owners have a right to demand

the return of their property at any time as long as the possession was unauthorized or
merely tolerated, if at all. This right is never barred by laches
Nonetheless, the Court is not unmindful of the fact that respondents had built their
house on the subject lot and, despite knowledge thereof, Remegia did not lift a finger to
prevent it. Article 453 of the Civil Code is applicable to their case:
ART. 453. If there was bad faith, not only on the part of the person who built, planted or
sowed on the land of another, but also on the part of the owner of such land, the rights
of one and the other shall be the same as though both had acted in good faith.
It is understood that there is bad faith on the part of the landowner whenever the act
was done with his knowledge and without opposition on his part.
Under the circumstances, respondents and Remegia are in mutual bad faith and, as
such, would entitle the former to the application of Article 448 of the Civil Code
governing builders in good faith:
ART. 448. The owner of the land on which anything has been built, sown or planted in
good faith, shall have the right to appropriate as his own the works, sowing or planting,
after payment of the indemnity provided for in Articles 546 29 and 548,30 or to oblige the
one who built or planted to pay the price of the land, and the one who sowed, the proper
rent. However, the builder or planter cannot be obliged to buy the land if its value is
considerably more than that of the building or trees. In such a case, he shall pay
reasonable rent, if the owner of the land does not choose to appropriate the building or
trees after the proper indemnity. The parties shall agree upon the terms of the lease and
in case of disagreement, the court shall fix the terms thereof.
Following the above provision, the owner of the land on which anything has been built,
sown or planted in good faith shall have the right to appropriate as his own the building,
planting or sowing, after payment to the builder, planter or sower of the necessary and
useful expenses, and in the proper case, expenses for pure luxury or mere pleasure.
Consequently, the petitioners are obliged to exercise either of the following options:
(1) to appropriate the improvements, including the house, built by the respondents on
the subject lot by paying the indemnity required by law, or
(2) sell the subject lot to the respondents.
Petitioners cannot refuse to exercise either option and compel respondents to remove
their house from the land. In case petitioners choose to exercise the second option,
respondents are not obliged to purchase the subject lot if its value is considerably more
than the improvements thereon and in which case, respondents must pay rent to
petitioners. If they are unable to agree on the terms of the lease, the court shall fix the
terms thereof.