584 Phil. 414
PUNO, CJ.:
IN VIEW OF THE FOREGOING, decision is hereby rendered:On appeal, the CA affirmed.
(a) ordering the annulment of Original Certificate of Title No. 338 in the name of Lydia Gaya and its subsequent titles, TCT 13200 in the name of Fidel Cu and TCT 15201 in the name of Ceferino Adviento, in so far as it covers the land adjacent to plaintiff's land covered by TCT 69 on the Southeast along the Naga River consisting of more or less 228 square meters, and further declaring plaintiff's ownership thereon [and] who [is] entitled to possession thereof;
(b) ordering defendant Lydia Gaya to indemnify plaintiffs (sic) the amount of P5,000 as attorney's fees and the cost of the suit.
SO ORDERED.[7]
We find the petition without merit.I.
THE COURT OF APPEALS ERRED IN FAILING TO HOLD THAT WHENEVER THERE IS A ROAD BOARDERING [sic] A STREAM OR RIVER THERE IS CEASED [SIC] A RIPARIAN OWNERSHIP ON AN ALLEGED ACCRETION AND WHATEVER ACCRETION THERE MIGHT HAVE BEEN DOES NOT BELONG TO THE OWNER.II.
THE COURT OF APPEALS ERRED IN FAILING TO HOLD THAT THE JUDICIAL ADMISSION OF RESPONDENT MIGUEL ALVAREZ DURING THE PRE-TRIAL AS TO THE FACT THAT PETITIONER HAD A TITLE OVER THE LAND IN QUESTION CONTROLS THE SUBSEQUENT PROCEEDING OF THE CASE.III.
THE COURT OF APPEALS ERRED IN FAILING TO HOLD THAT INASMUCH AS THERE WAS REGULARITY, VALIDITY AND CONCLUSIVENESS OF THE DECISION IN THE LAND REGISTRATION CASE (LRC) RESULTING IN A DECREE OF REGISTRATION IN FAVOR OF APPELLANT GAYA, THE SAID LRC DECISION PUTS TO REST WHATEVER ISSUES THERE MAY BE.IV.
THE COURT OF APPEALS ERRED IN FAILING TO HOLD THAT BY THE COMPLETENESS AND DETERMINATION OF TITLE IN FAVOR OF LYDIA GAYA AND SUBSEQUENTLY TO PETITIONER, THE CIVIL CASE SHOULD HAVE BEEN DISMISSED AND THAT THE DECISION OF THE REGIONAL TRIAL COURT AS WELL AS THE COURT OF APPEALS IN FAVOR OF RESPONDENT HEIRS OF MIGUEL ALVAREZ SHOULD HAVE BEEN LIKEWISE DISMISSED.V.
THE COURT OF APPEALS ERRED IN FAILING TO HOLD THAT THERE WAS NO FRAUD; PLAINTIFF AND HIS SUBSTITUTE HEIRS ARE NOT ENTITLED TO AN AWARD FOR ATTORNEY'S FEES.[8]
For an applicant to have this imperfect or incomplete title or claim to a land to be originally registered under Act 496, the several requisites should all be satisfied; (1) Survey of land by the Bureau of Lands or a duly licensed private surveyor; (2) Filing an application for registration by the applicant; (3) Setting of the date for the initial hearing of the application by the Court; (4) Transmittal of the application and the date of the initial hearing together with all the documents or other evidences attached thereto by the Clerk of Court to the Land Registration Commission; (5) Publication of a notice of the filing of the application and the date and place of the hearing in the Official Gazette; (6) Service of notice upon contiguous owners, occupants and those known to have interests in the property by the sheriff; (7) Filing of answer to the application by any person whether named in the notice or not; (8) Hearing of the case by the Court; (9) Promulgation of judgment by the Court; (10) Issuance of the decree by the Court declaring the decision final and instructing the Land Registration Commission to issue a decree of confirmation and registration; (11) Entry of the decree of registration in the Land Registration Commission; (12) Sending of copy of the decree of registration to the corresponding Register of Deeds; and (13) Transcription of the decree of registration in the registration book and the issuance of the owner's duplicate original certificate of title to the applicant by the Register of Deeds, upon payment of the prescribed fees.[16]In the case at bar, petitioner admitted the lack of the notice to respondents. Lack of notice is a denial of due process to respondents. It is elementary that no person can be denied his property without due process of law.[17]
SEC. 38. If the court after hearing finds that the applicant or adverse claimant has title as stated in his application or adverse claim and proper for registration, a decree of confirmation and registration shall be entered. Every decree of registration shall bind the land, and quiet title thereto, subject only to the exceptions stated in the following section. It shall be conclusive upon and against all persons, including the Insular Government and all the branches thereof, whether mentioned by name in the application, notice, or citation, or included in the general description 'To all whom it may concern.' 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 decrees; subject, however, to the right of any person deprived of land or of any estate 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. Upon the expiration of said term of one year, every decree or certificate of title issued in accordance with this section shall be incontrovertible. If there is any such purchaser, the decree of registration shall not be opened, but shall remain in full force and effect forever, subject only to the right of appeal hereinbefore provided: Provided, however, That no decree or certificate of title issued to persons not parties to the appeal shall be cancelled or annulled. But any person aggrieved by such decree in any case may pursue his remedy by action for damages against the applicant or any other person for fraud in procuring the decree. Whenever the phrase 'innocent purchaser for value' or an equivalent phrase occurs in this Act, it shall be deemed to include an innocent lessee, mortgagee, or other encumbrancer for value.[18]In Salomon v. Bocauto,[19] Justice Laurel had the occasion to discuss the nature of this provision:
Under section 38 of Act No. 496, the petitioner must show affirmatively that (1) he has an interest or estate in the land, and (2) he has been deprived of that interest through fraud in the procurement of the decree of registration. The essential facts are to be clearly alleged in the petition; otherwise, the registration court is justified in dismissing the same. (Guzman vs. Ortiz, 12 Phil., 701; Cusar Insular Government, 13 Phil., 319; Apurado vs. Apurado, 26 Phil., 586; and Escudero & Marasigan vs. Esguerra, 48 Phil., 511.) In the present case, the appellants Bocauto and Redon pretend to derive their claim from llariano Redon, the original owner. The lower court, however, in its decision dated January 26, 1939, appears to have rejected this claim and found that Mariano Redon had sold the said land to Bonifacio Redon, who, in turn, conveyed it to Policarpio Tamoro. Moreover, both petitioners had notice of the original registration proceedings, but failed to put up any claim and to show title in themselves.In the case at bar, respondents pleaded their interest in the land and the fraud used which defeated such interest. No notice was given to the respondents. The lack of notice was obviously intended by the petitioner's predecessor-in-interest to prevent contest on the application. Petitioner's predecessor-in-interest falsely attested to the absence of any adverse claim, including the absence of any possession of the land. By our rulings, this constitutes extrinsic fraud. In Libundan v. Gil,[20] we held that:
The purpose of the law in giving aggrieved parties, deprived of land or any interest therein, through fraud in the registration proceedings, the opportunity to review the decree is to insure fair and honest dealing in the registration of land. But 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, Extrinsic or collateral fraud, as distinguished from intrinsic fraud, connotes any fraudulent scheme executed by a prevailing litigant 'outside the trial of a case against the defeated party, or his agents, attorneys or witnesses, whereby said defeated party is prevented from presenting fully and fairly his side of the case.' But intrinsic fraud takes the form of `acts of a party in a litigation during the trial, such as the use of forged instruments or perjured testimony, which did not affect the presentation of the case, but did prevent a fair and just determination of the case.'The averments in the petition for review of the decree of registration constitute specific and not mere general allegations of actual and extrinsic fraud.[22] Competent proof to support these allegations was adduced as found by the courts a quo. We find no compelling reason to disturb their findings.
Thus, relief is granted to a party deprived of his interest in land where the fraud consists in a deliberate misrepresentation that the lots are not contested when in fact they are, or in applying for and obtaining adjudication and registration in the name of a co-owner of land which he knows had not been allotted to him in the partition, or in intentionally concealing facts, and conniving with the land inspector to include in the survey plan the bed of a navigable stream, 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 opposition. 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.[21]
On cross, Ce[f]erino Adviento admitted the existence of an annotation on the title of the pendency of Civil Case No. 7205 filed as early as October 1971 before he purchased the land in question, and therefore knew the risk of buying it. He was likewise shown a title by Fidel Cu and also knew of the existence of a lis pendens in the latter's title. He also examined the records of this case, was aware that the plaintiff was a boundary owner of the land in question, but did not verify his title as to whether his land was bounded on the Southeast by Naga River. Before he filed his answer-in-intervention in May 1984, he already knew of the records of this case and only coordinated with his counsel. He came to know that the property of Alvarez is bounded by the Naga River on the southeast after the relocation made by the Commissioner. Despite such knowledge, he did not confront Lydia Gaya or Fidel Cu about it. In 1984 he did not know that the heirs of Miguel Alvarez were in possession of the construction work of Alvarez which was going on at that time on the premises, but he did not confront Alvarez about it. At the time of his purchase of the land, there were no buildings on the land but only small shanties at the corner of Elias Angeles Street and a "Cafehan" at the road along the river with nipa roofing and the walls were somewhat nipa too, and which appeared to be quite old. He did not however inquire who allowed the construction thereof. At the time of his purchase in 1984, the area owned by Alvarez which appears now to adjoin the property he purchased was used as a bus terminal which was put on much later, but not at the time of his purchase.Thus, when the trial court decided against Lydia Gaya's interest, it followed that all the succeeding titles which trace interest to her title were affected. In the case at bar, the trial court found that the issuance of title was illegal. Petitioner's claimed right cannot now have more coverage and extent than that from which it originated. Indeed, petitioner's purchase of the said land despite the notice of lis pendens and actual knowledge of the pending case would not qualify him as an innocent purchaser for value.[24] It is a settled rule that a purchaser of real estate with knowledge of any defect or lack of title of the vendor cannot claim that he has acquired title thereto in good faith as against the true owner of the land or interest therein. The same rule applies to one with knowledge of facts which should have put him on inquiry and investigation as might be necessary to acquaint him with the defects in the title of his vendor.[25]
Admittedly, the land in question consisting of 228 square meters, more or less, is a portion of Lot 3164 covered by OCT 338 in the name of Lydia Gaya.[23]