Leoveras v. Valdez

Petition for Relief from Judgment; v. Action for Reconveyance

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Case DigestWeek 3–4 — The Registries of Deeds and Original Registration

Leoveras v. Valdez

G.R. No. 169985 · June 15, 2011 · Supreme Court — Third Division

Petition for Relief from Judgment; v. Action for Reconveyance

Gist

The relationship of Modesto Leoveras v. Casimero Valdez, G.R. No. 169985, June 15, 2011, to the assigned topic of "Action for Reconveyance" is DIRECT. Two brothers-in-law bought one half-share of a Pangasinan lot together in 1969 and, on the same day, signed an Agreement allotting 3,020 square meters to Leoveras and 7,544.27 to Valdez. Twenty-seven years later Valdez discovered that Leoveras already held two transfer certificates over 4,024 square meters, secured on the strength of a deed of sale purportedly executed in 1969 by a woman who had died in 1944 and an Affidavit of Confirmation of Subdivision bearing what Valdez said was a forged signature. The Supreme Court partially granted the petition. It restated the elements of an action for reconveyance, held that registration does not vest title and cannot shield a usurper, nullified both certificates because a registration procured by a forged instrument is void under Section 53 of P.D. No. 1529 — even as to the 3,020 square meters Leoveras really owned — but reconveyed only the 1,004 square meters, because reconveyance runs to the rightful owner alone.

Core Doctrine

An action for reconveyance is the legal and equitable remedy of the rightful landowner whose land was wrongfully or erroneously registered in another's name, and the plaintiff must allege and prove both his own ownership and the defendant's erroneous, fraudulent or wrongful registration. Registration does not vest title; it merely confirms or records a title already existing and vested, so one who fraudulently causes registration in his name holds it in trust for the true owner. But reconveyance is a remedy of the rightful owner only: a certificate void for having been procured by a forged instrument is cancelled, yet the land it covered is not reconveyed to a plaintiff who does not own it.

Facts

OCT No. 24695 covered 28,171 square meters in Poblacion, Manaoag, Pangasinan, registered to Maria Sta. Maria (three-fourths) and Dominga Manangan (one-fourth) pro indiviso. In September 1932 Sta. Maria sold her three-fourths share to Benigna Llamas, and the sale was annotated at the back of the OCT. Benigna died in 1944, willing her three-fourths equally to her sisters Alejandra and Josefa Llamas. (That death date is the whole case. It is what makes the deed Leoveras later presented an impossibility, and it was proved by a document — Benigna's death certificate — rather than by expert opinion on a signature.)
On June 14, 1969 Alejandra's heirs sold her one-half share, roughly 10,564 square meters, to Casimero Valdez; and on the same day Josefa sold her own one-half — the subject property — to Valdez and Modesto Leoveras together.
Also on June 14, 1969, the two buyers executed an Agreement partitioning what they had just bought. It recites that "our respective share consist of 5,282.13 square meter each," then covenants that Leoveras takes "3,020 square meters residential portion on the northern part near the Municipal road" and Valdez takes 7,544.27 square meters. (The Agreement gives Leoveras less than the arithmetic half it had just recited, which is exactly what he would later say was a mistake — and exactly what the Court would hold he was bound by.)
On June 8, 1977 the parties executed an Affidavit of Adverse Claim over the subject property, then took possession of their respective portions and declared them for taxation. Valdez declared his in December 1987; Leoveras declared the 1,004-square-meter portion only in September 1994, under Tax Declaration No. 9393, despite claiming exclusive and adverse possession of it since 1969.
In 1996 Valdez asked the Register of Deeds of Lingayen what was needed to transfer title to his allotted portion, and learned that Leoveras already held two certificates in his own name — TCT No. 195812 over 3,020 square meters and TCT No. 195813 over 1,004 square meters, a total of 4,024.
The Register of Deeds could not find the record of OCT No. 24695, and instead furnished Valdez the documents on which the transfer had been made: two deeds of absolute sale dated June 14, 1969 purportedly executed by Sta. Maria; the Benigna Deed, also dated June 14, 1969, by which Benigna Llamas purports to sell 7,544, 4,024 and 8,689 square meters to Valdez, Leoveras and Virgilia Li Meneses; a Subdivision Plan of PSU 21864; and an Affidavit of Confirmation of Subdivision dated May 3, 1994 assigning Lot 2 (3,020) and Lot 3 (1,004) to Leoveras, Lot 4 (7,544) to Valdez, Lot 5 (8,689) to Meneses and Lot 6 (7,043) to Manangan. (Two impossibilities sit in that bundle: Benigna could not sell in 1969 because she died in 1944, and Sta. Maria could not sell in 1969 because she had already sold to Benigna in 1932.)
On June 21, 1996 Valdez sued for Annulment of Title, Reconveyance and Damages, seeking reconveyance of the 1,004-square-meter disputed property covered by TCT No. 195813 only, on the ground that Leoveras was entitled to the 3,020 square meters the Agreement gave him and nothing more. He attacked the Benigna Deed with the death certificate and denied his signature on the Affidavit.
On June 23, 2000 the RTC of Urdaneta City, Branch 46, dismissed the complaint, holding that Valdez failed to prove the documents fabricated and had not even compared his genuine signature with the questioned ones. On March 31, 2005 the Court of Appeals reversed in CA-G.R. CV No. 68549, declaring both TCTs null and void and directing Leoveras to reconvey both parcels; reconsideration was denied October 6, 2005. The Third Division decided on June 15, 2011.

Arguments of the Parties

Petitioner. Leoveras argued that the Court of Appeals committed "gross misappreciation of the facts" by going beyond what the complaint sought — Valdez asked only for the 1,004-square-meter parcel under TCT No. 195813, yet the CA ordered both parcels reconveyed. He argued that the parties had delineated their portions even before acquiring the land in 1969 and agreed that ownership would follow actual possession, which for him came to 4,024 square meters marked off by a fence he built after the sale; that in signing the Agreement he was misled by the parties' "rough estimation" into accepting 3,020; and that the Affidavit of Confirmation of Subdivision corrected that mistake and confirmed his ownership. He admitted that the Benigna Deed is "fabricated", but insisted it was designed only to affirm the "true intent and agreement" of the parties and to serve as a "convenient tool" to facilitate the transfer of title to his name.

Respondent. Valdez argued that since Leoveras himself admitted using a spurious document to obtain his titles, the Court of Appeals correctly cancelled both; that Leoveras had forged his signature on the Affidavit to make it appear he consented to the division stated there; and that if the distribution in the Affidavit were followed, the parties' "original intendment" as to their shares would be "grievously impaired."

Common Ground / Stipulations (if any). Leoveras does not dispute the due execution and authenticity of the Deed of Absolute Sale executed by Josefa, the Affidavit of Adverse Claim, or — most importantly — the Agreement; his case is that the Agreement fails to express the parties' true intention. Valdez in turn admits that the 3,020-square-meter portion covered by TCT No. 195812 is Leoveras's just share.

Issue

MAIN ISSUE (Reconveyance-centered). Whether the rightful owner of a portion of land fraudulently registered in another's name is entitled to reconveyance, where the registration was procured by a fabricated deed the registrant himself admits to be false.

SECONDARY ISSUES. Whether the Court of Appeals erred in nullifying both of the petitioner's certificates of title, including the one covering the portion he genuinely owns; and whether it erred in ordering the reconveyance of both parcels when the complaint sought only one.

ANCILLARY / INCIDENTAL ISSUES (if any). Whether the 1969 Agreement or the parties' actual possession fixes the extent of their ownership, and whether parol evidence was admissible to vary the Agreement.

Ruling

On the MAIN ISSUE: YES. An action for reconveyance is "a legal and equitable remedy granted to the rightful landowner, whose land was wrongfully or erroneously registered in the name of another, to compel the registered owner to transfer or reconvey the land to him," and the plaintiff "must allege and prove his ownership of the land in dispute and the defendant's erroneous, fraudulent or wrongful registration of the property." Valdez proved ownership through Josefa's Deed of Absolute Sale, the parties' Affidavit of Adverse Claim and the parties' Agreement, none of whose due execution Leoveras disputes. Leoveras's attempt to vary the Agreement by parol evidence collapsed on his own admission that the Benigna Deed is fabricated — an admission "completely bolstering the respondent's cause of action for reconveyance of the disputed property on the ground of fraudulent registration of title," which "rendered moot the issue of authenticity" and "relieved the respondent of the burden of proving its falsity." By fraudulently causing the transfer of registration, Leoveras holds the disputed property in trust for Valdez; registration does not vest title but merely confirms or records title already existing and vested, and "the Torrens system of registration cannot be used to protect a usurper from the true owner, nor can it be used as a shield for the commission of fraud, or to permit one to enrich oneself at the expense of others." On the nullification of both titles: the CA was correct, because the argument "confuses registration of title with ownership" — Leoveras's undisputed ownership of the 3,020 square meters "only gave him the right to apply for the proper transfer of title," and Section 53 of P.D. No. 1529 makes any subsequent registration procured by a forged deed or other instrument null and void, so TCT No. 195812 carries "no better right than the tainted registration" behind it. On the extent of reconveyance: the CA erred — Valdez himself admits the 3,020-square-meter portion is Leoveras's just share, so although that title too was void, "the land covered by this title should not be reconveyed in favor of the respondent since he is not the rightful owner of the property covered by this title." On the ancillary question: the Agreement is a partition agreement that terminated the co-ownership and made each party the absolute and exclusive owner of his allotted share; "just as non-possession does not negate ownership, neither does possession automatically prove ownership, especially in the face of an unambiguous document executed by the parties themselves." The dispositive portion reads verbatim: "WHEREFORE, the petition is partially GRANTED. The assailed decision and resolution of the Court of Appeals are MODIFIED. Accordingly, the petitioner is directed to RECONVEY to the respondent the parcel of land covered by TCT No. 195813. Costs against petitioner. SO ORDERED."

Ratio

Reconveyance has two elements and Valdez proved both. The plaintiff must show his own ownership and the defendant's erroneous, fraudulent or wrongful registration. Ownership came from three documents Leoveras never impugned; the wrongful registration came from Leoveras's own mouth.
An admission of fabrication does the work of a forgery trial. Once Leoveras conceded in this Court that the Benigna Deed was made up, the authenticity issue on which the RTC had dismissed the case became moot, and Valdez was relieved of the burden of proving falsity.
The Affidavit cannot outlive the deed it rests on. The Affidavit of Confirmation of Subdivision "merely reflects what is embodied in the Benigna Deed," so the admission plus Valdez's denial of his signature put "in serious doubt the reliability of this document, supposedly the bedrock of the petitioner's defense."
The fabrication is itself evidence against the intention it was meant to prove. "Curiously, if the parties truly intended to include in the petitioner's share the disputed property, the petitioner obviously need not go at length of fabricating a deed of sale" — and nothing in the Affidavit says the division was based on actual possession.
A trust arises by operation of law, not by decree. One who fraudulently procures registration holds the land in trust for the true owner; Article 1456 supplies the trust, and registration confirms title, it does not create it.
Ownership is not registration. Even a rightful owner "must comply with the statutory provisions on the transfer of registered title," and a certificate obtained by presenting a forged instrument is null and void under Section 53 whoever the real owner is. The Court "simply cannot allow the petitioner's attempt to get around the proper procedure for registering the transfer of title in his name by using spurious documents."
Partition, once made, fixes the shares. The Agreement terminated the co-ownership under Article 1079; want of a technical description, or the survival of a single mother title, does not undo it where the portions were determined and separately identifiable. Leoveras's own testimony proved only that he possessed 4,024 square meters, never that the parties had agreed possession would measure ownership.
Tax declarations cut against him. Valdez declared his 7,544 square meters in December 1987 — matching the Agreement exactly — while Leoveras declared the 1,004-square-meter portion only in September 1994, though claiming adverse possession of it since 1969.
Reconveyance runs to the rightful owner only. A void certificate is cancelled; but the land under it goes back to whoever owns it, and Valdez admitted the 3,020 square meters are not his.

Doctrine

Doctrines / Rules / Principles Laid Down.

The nature and elements of an action for reconveyance: it is a legal and equitable remedy granted to the rightful landowner whose land was wrongfully or erroneously registered in the name of another, to compel the registered owner to transfer or reconvey it. The plaintiff must allege and prove (i) his ownership of the land in dispute and (ii) the defendant's erroneous, fraudulent or wrongful registration of it.
Registration does not vest title: it "merely confirms or records title already existing and vested." One who fraudulently causes the transfer of registration in his name holds the title in trust for the true owner under Article 1456, and "the Torrens system of registration cannot be used to protect a usurper from the true owner, nor can it be used as a shield for the commission of fraud, or to permit one to enrich oneself at the expense of others."
A registration procured by a forged instrument is void even as to a rightful owner: ownership gives only the right to apply for the transfer of title, and every owner "must comply with the statutory provisions on the transfer of registered title to lands." Under Section 53 of P.D. No. 1529, a subsequent registration procured by presenting a forged deed or other instrument is null and void, and the resulting certificate carries no better right than the tainted registration behind it.
An agreement allotting portions among co-owners is a partition: it terminates the co-ownership under Article 1079 and makes each former co-owner the absolute and exclusive owner of the share allotted to him, and it — not possession — defines the extent of ownership thereafter.

Distinctions / Limitations / Qualifications.

Reconveyance is the remedy of the rightful owner only. Nullifying a void certificate and reconveying the land it covered are two different dispositions. The Court cancelled TCT No. 195812 because it was procured by a forged deed, yet refused to reconvey the land under it, since the plaintiff himself admitted that portion was the defendant's just share.
Partition is not defeated by informality. That the Agreement carries no technical description, or that the property was still covered by a single certificate of title, does not prevent a valid partition where the portions allotted were determined and became separately identifiable.
Possession neither proves nor negates ownership. "Just as non-possession does not negate ownership, neither does possession automatically prove ownership," least of all against an unambiguous document the parties executed themselves.
The parol evidence door swings both ways. A party who pleads that the writing fails to express the parties' true intent may offer evidence to modify, explain or add to it under Section 9, Rule 130 — but the evidence he offers is then subject to attack, and here it destroyed his own case.

Topic/Subtopic Integration (Mandatory).

Classification of Relationship: DIRECT to Action for Reconveyance; the Petition for Relief from Judgment half of the pair is the contrast the case is assigned to illuminate.
Integration: the case is the clean statement of what an action for reconveyance is — a remedy that concedes the certificate and attacks the holding. It does not reopen a decree, does not ask that the registration proceedings be set aside, and does not depend on any period running from a judgment; it asks only that a registered owner who holds under an implied trust be made to convey. That is what distinguishes it from a petition for relief from judgment under Rule 38, which attacks the judgment itself and must be brought within sixty days from notice and not more than six months from entry, and from a petition to review a decree of registration, which must be filed within one year from entry of the decree and fails altogether once an innocent purchaser for value has acquired an interest.
The practical lesson the case adds: reconveyance reaches the land, not the paper, so the two dispositions can part company. Both of Leoveras's certificates were void — the forged-instrument rule of Section 53 knows nothing of who really owns the land — but only one parcel was reconveyed, because the plaintiff in reconveyance recovers what is his and nothing more.

Separate Opinions

None. Justice Arturo D. Brion wrote for the Third Division, with Justices Conchita Carpio Morales, Lucas P. Bersamin, Martin S. Villarama, Jr. and Maria Lourdes P. A. Sereno concurring.

Full Digest — Recitation Format

Facts

Originally: Maria Sta. Maria and Dominga Manangan were the registered owners — three-fourths and one-fourth pro indiviso respectively — of a parcel of land in Poblacion, Manaoag, Pangasinan, covered by Original Certificate of Title No. 24695, with an area of 28,171 square meters.
In September 1932: Sta. Maria sold her three-fourths share to Benigna Llamas. The sale was duly annotated at the back of OCT No. 24695.
In 1944: Benigna died, and by will left her three-fourths share equally to her sisters Alejandra Llamas and Josefa Llamas, so that each owned one-half of Benigna's three-fourths share.
On June 14, 1969: Alejandra's heirs sold their predecessor's one-half share — roughly 10,564 square meters — to respondent Casimero Valdez, as evidenced by a Deed of Absolute Sale.
Also on June 14, 1969: Josefa sold her own one-half share (the subject property) to the respondent and the petitioner Modesto Leoveras, as evidenced by another Deed of Absolute Sale.
On the same date: The respondent and the petitioner executed an Agreement allotting their portions of the subject property. It recites that they are the absolute owners of the subject property, that "in said deed of sale … our respective share consist of 5, 282.13 [one-half of 10,564 square meters] square meter each," and then covenants: "Modesto Leoveras – 3,020 square meters residential portion on the northern part near the Municipal road of Poblacion Pugaro, Manaoag, Pangasinan; Casimero Valdez – 7,544.27 square meters of the parcel of land described above."
On June 8, 1977: The petitioner and the respondent executed an Affidavit of Adverse Claim over the subject property. The parties took possession of their respective portions and declared them in their own names for taxation purposes.
In December 1987: The respondent declared for taxation purposes the portion he claims; the total area of the properties declared, 7,544 square meters, is equivalent to the area allotted to him under the Agreement.
In September 1994: The petitioner declared the 1,004-square-meter portion under Tax Declaration No. 9393, notwithstanding his claim of exclusive and adverse possession of it since 1969.
In 1996: The respondent asked the Register of Deeds of Lingayen, Pangasinan about the requirements for the transfer of title over the portion allotted to him. To his surprise, he learned that the petitioner had already obtained two transfer certificates of title in his own name: TCT No. 195812, covering 3,020 square meters, and TCT No. 195813, covering 1,004 square meters — a total of 4,024 square meters.
The Register of Deeds could not find the record of OCT No. 24695, and instead furnished the respondent with the petitioner's documents: (1) two deeds of absolute sale dated June 14, 1969, both purportedly executed by Sta. Maria, conveying an unspecified portion of OCT No. 24695 — 11,568 square meters to the respondent and petitioner, and 8,689 square meters to one Virgilia Li Meneses; (2) the Benigna Deed, also dated June 14, 1969, purportedly executed by Benigna, selling 7,544, 4,024 and 8,689 square meters respectively to Casimero Valdez, Modesto Leoveras and Virgilia Meneses; (3) the Subdivision Plan of PSU 21864 of OCT No. 24695; and (4) an Affidavit of Confirmation of Subdivision dated May 3, 1994, in which Meneses, Manangan, Leoveras and Valdez confirm a subdivision assigning Lot 2 (3,020 sq. m.) and Lot 3 (1,004 sq. m.) to Modesto Leoveras, Lot 4 (7,544 sq. m.) to Casimero Valdez, Lot 5 (8,689 sq. m.) to Virgilia Meneses and Lot 6 (7,043 sq. m.) to Dominga Manangan.
On June 21, 1996: The respondent filed a complaint for Annulment of Title, Reconveyance and Damages against the petitioner, seeking the reconveyance of the 1,004-square-meter portion (the disputed property) covered by TCT No. 195813, on the ground that the petitioner is entitled only to the 3,020 square meters identified in the parties' Agreement. He prayed for the cancellation of the petitioner's documents, the cancellation of TCT No. 195813 and its reconveyance to him, the cancellation and nullification of TCT No. 195812, and the issuance of title in his name over 17,104 square meters of OCT No. 24695.
In support of the complaint: The respondent assailed the Benigna Deed by presenting Benigna's death certificate, arguing that she could not have executed in 1969 a deed purporting to convey 4,024 square meters to the petitioner because she already died in 1944; that neither could Sta. Maria have sold her three-fourths share in 1969, having already sold it to Benigna in 1932; and he denied his purported signature appearing in the Affidavit.
On June 23, 2000: The Regional Trial Court, Branch 46, Urdaneta City, Pangasinan dismissed the complaint, ruling that the respondent failed to preponderantly prove that the Benigna Deed and the Affidavit are fabricated and that consequently no ground exists to nullify the petitioner's titles, observing that the respondent "did not even compare his genuine signature with the signatures appearing in these documents."
On March 31, 2005: The Court of Appeals reversed the RTC in CA-G.R. CV No. 68549, ruling against the authenticity of the Benigna Deed and the Affidavit. It gave weight to Benigna's death certificate, noted the discrepancy between the respondent's signature in the Affidavit and his signatures on record, and held that the respondent's failure to compare his genuine signature is not fatal since Section 22, Rule 132 allows the court to make its own comparison. It declared TCT Nos. 195812 and 195813 null and void and directed the petitioner to reconvey the subject parcels of land to the respondent.
On October 6, 2005: The Court of Appeals denied reconsideration; the petitioner then filed the present appeal by certiorari.
On June 15, 2011: The Supreme Court, Third Division, promulgated the Decision partially granting the petition and modifying the Court of Appeals rulings.

Arguments of the Parties

Petitioner (Modesto Leoveras).

Petitioner claims that the Court of Appeals committed "gross misappreciation of the facts" by going beyond what the respondent sought in his complaint, since the respondent sought the reconveyance only of the disputed property — the parcel covered by TCT No. 195813 — yet the appellate court ordered the reconveyance of both parcels covered by his titles.
Petitioner asserts that after the sale the parties physically partitioned the subject property and possessed their respective portions, thereby setting the limits of their ownership, and that the parties had delineated their respective portions even before they acquired the property in 1969, agreeing that upon acquisition each would own the portion as delineated.
Petitioner claims that the area he actually possessed and subsequently acquired has a total area of 4,024 square meters, which he subdivided into two portions covered by the two titles in question; and that in signing the Agreement he was led to believe, on the parties' "rough estimation," that the area he possessed was only 3,020 square meters, contrary to the parties' real intention that ownership would be based on actual possession.
Petitioner claims that the respondent voluntarily participated in executing the Affidavit, which corrected the mistake in the previously executed Agreement and confirmed his ownership of the disputed property.
Petitioner admits that the Benigna Deed is "fabricated", but hastens to add that it was designed only (i) to affirm the "true intent and agreement" of the parties on the extent of their ownership as shown by their actual physical possession, and (ii) as a "convenient tool" to facilitate the transfer of title to his name.

Respondent (Casimero Valdez).

Respondent claims that since the petitioner himself admitted using a spurious document in obtaining his titles — as alleged in the complaint and as found by the Court of Appeals — the appellate court correctly cancelled the petitioner's titles.
Respondent claims that the petitioner forged his signature in the Affidavit to make it appear that he agreed to the division indicated in that document.
Respondent defends the reconveyance of both parcels by arguing that if the distribution in the Affidavit is followed, the "original intendment" of the parties on their shares of the subject property would be "grievously impaired."

Common Ground.

The petitioner does not dispute the due execution and the authenticity of the Deed of Absolute Sale executed by Josefa, the parties' Affidavit of Adverse Claim, and particularly the Agreement; his position is that the Agreement does not reflect the parties' true intention.
The respondent himself admitted that the 3,020-square-meter portion covered by TCT No. 195812 is the petitioner's just share in the subject property.
There is no dispute that the 3,020-square-meter portion is the same parcel identified as Lot No. 2 — not the subject of the respondent's action for reconveyance — in the Affidavit and the Subdivision Plan the petitioner presented to the Register of Deeds.

Issue

MAIN ISSUE. Whether the Court of Appeals erred in nullifying the petitioner's titles, TCT No. 195812 and TCT No. 195813, where the registrations were procured by presenting a deed the petitioner admits to be fabricated.

SECONDARY ISSUES.

Whether the Court of Appeals erred in ordering the reconveyance of both parcels of land covered by the petitioner's titles, when the complaint sought the reconveyance only of the parcel covered by TCT No. 195813.
Whether the parties' 1969 Agreement or the petitioner's actual possession determines the extent of their respective ownership of the subject property.
Whether parol evidence — in the form of the 1994 Affidavit of Confirmation of Subdivision — was properly received to show that the Agreement failed to express the parties' true intention.

Ruling

Ruling on the MAIN ISSUE. NO — the nullification was correct. An action for reconveyance is "a legal and equitable remedy granted to the rightful landowner, whose land was wrongfully or erroneously registered in the name of another, to compel the registered owner to transfer or reconvey the land to him," and "the plaintiff in this action must allege and prove his ownership of the land in dispute and the defendant's erroneous, fraudulent or wrongful registration of the property."

The respondent adequately proved his ownership of the disputed property by virtue of (i) the Deed of Absolute Sale executed by Josefa in favour of the parties; (ii) the parties' Affidavit of Adverse Claim; and (iii) the parties' Agreement — documents whose due execution and authenticity the petitioner does not dispute.

The petitioner's claim that the Agreement does not reflect the parties' true intention calls to fore the parol evidence rule: when the terms of an agreement are reduced to writing, the writing is deemed to contain all the terms agreed upon and no evidence of those terms may be admitted other than the contents of the writing; whatever is not found in the writing is understood to have been waived and abandoned. To avoid its operation, a party may present evidence modifying, explaining or adding to the terms if he puts in issue in his pleading — as the petitioner did — the failure of the written agreement to express the true intent and agreement of the parties, whether by reason of mistake, fraud, inequitable conduct or accident.

What the petitioner offered was the Affidavit. But in this petition he made a damaging admission that the Benigna Deed is fabricated, "thereby completely bolstering the respondent's cause of action for reconveyance of the disputed property on the ground of fraudulent registration of title." Since the Affidavit merely reflects what is embodied in the Benigna Deed, that admission, "coupled with the respondent's denial of his purported signature in the Affidavit, placed in serious doubt the reliability of this document, supposedly the bedrock of the petitioner's defense." The Court added: "Curiously, if the parties truly intended to include in the petitioner's share the disputed property, the petitioner obviously need not go at length of fabricating a deed of sale to support his application for the transfer of title of his rightful portion of the subject property," and nothing in the Affidavit supports the claim that the partition was based on actual possession. By admitting the presentation of a false deed in securing his title, the petitioner rendered moot the issue of authenticity of the Benigna Deed and relieved the respondent of the burden of proving its falsity.

"By fraudulently causing the transfer of the registration of title over the disputed property in his name, the petitioner holds the title to this disputed property in trust for the benefit of the respondent as the true owner; registration does not vest title but merely confirms or records title already existing and vested. The Torrens system of registration cannot be used to protect a usurper from the true owner, nor can it be used as a shield for the commission of fraud, or to permit one to enrich oneself at the expense of others." The Court of Appeals therefore correctly ordered the reconveyance of the disputed property covered by TCT No. 195813.

As to TCT No. 195812, the petitioner's argument that his undisputed ownership of the 3,020 square meters should save that title "confuses registration of title with ownership." His ownership "only gave him the right to apply for the proper transfer of title to the property in his name," and "even as a rightful owner" he "must comply with the statutory provisions on the transfer of registered title to lands." Section 53 of Presidential Decree No. 1529 provides that the subsequent registration of title procured by the presentation of a forged deed or other instrument is null and void; hence the subsequent issuance of TCT No. 195812 "gave the petitioner no better right than the tainted registration which was the basis for the issuance of the same title." "The Court simply cannot allow the petitioner's attempt to get around the proper procedure for registering the transfer of title in his name by using spurious documents."

Ruling on SECONDARY ISSUE 1. YES — the Court of Appeals erred. While it correctly nullified the petitioner's certificates of title, it erred in ordering the reconveyance of the entire subject property in the respondent's favour. The respondent himself admitted that the 3,020-square-meter portion covered by TCT No. 195812 is the petitioner's just share in the subject property. Thus, although the petitioner obtained that title using the same spurious documents, "the land covered by this title should not be reconveyed in favor of the respondent since he is not the rightful owner of the property covered by this title." Reconveyance is the remedy of the rightful owner only.

Ruling on SECONDARY ISSUE 2. THE AGREEMENT DETERMINES IT. The petitioner and the respondent were originally co-owners of the subject property when they jointly bought it from the same vendor in 1969; but the parties immediately terminated this state of indivision by executing the Agreement, which is in the nature of a partition agreement. Partition is "the separation, division and assignment of a thing held in common among those to whom it may belong" — the division between two or more persons of real or personal property owned in common, by setting apart their respective interests so that they may enjoy and possess them in severalty, resulting in the partial or total extinguishment of co-ownership. Here the parties agreed to give the petitioner the 3,020-square-meter "residential portion on the northern part near the Municipal road," which is the same parcel identified as Lot No. 2 in his own Subdivision Plan and Affidavit. "The fact that the Agreement lacks technical description of the parties' respective portions or that the subject property was then still embraced by a single certificate of title could not legally prevent a partition, where the different portions allotted to each were determined and became separately identifiable."

Even the petitioner's own testimony "merely attempted to confirm his actual possession of the disputed property, without, however, supporting his claim — contrary to the written Agreement — that the parties' ownership of the subject property would be co-extensive with their possession," which "is the core of the petitioner's defense." "At any rate, just as non-possession does not negate ownership, neither does possession automatically prove ownership, especially in the face of an unambiguous document executed by the parties themselves." It is the parties' Agreement that defines the extent of their ownership, one of the legal effects of partition being "to terminate the co-ownership and, consequently, to make the previous co-owners the absolute and exclusive owner of the share allotted to him." The tax declarations corroborate this: the respondent declared 7,544 square meters in December 1987, matching the Agreement, while the petitioner declared the 1,004-square-meter portion only in September 1994 despite claiming exclusive and adverse possession since 1969.

Ruling on SECONDARY ISSUE 3. THE EVIDENCE WAS RECEIVABLE BUT WORTHLESS. Having put the failure of the writing to express the true intent in issue in his pleading, the petitioner was entitled under Section 9, Rule 130 to offer evidence modifying, explaining or adding to the Agreement. But the evidence he chose — the Affidavit — merely reflects the Benigna Deed he admits was fabricated, and the respondent denied his signature on it. On the question of that signature, the Court of Appeals was entitled to compare the signatures itself: Section 22, Rule 132 permits proof of handwriting "by a comparison, made by the witness or the court, with writings admitted or treated as genuine," so the respondent's failure to compare his genuine signature with the questioned ones is not fatal.

Dispositive portion (verbatim). The final dispositive portion of the Supreme Court in G.R. No. 169985, dated June 15, 2011, is quoted verbatim as follows:

"WHEREFORE, the petition is partially GRANTED. The assailed decision and resolution of the Court of Appeals are MODIFIED. Accordingly, the petitioner is directed to RECONVEY to the respondent the parcel of land covered by TCT No. 195813. Costs against petitioner.

SO ORDERED."

Ratio

The elements of reconveyance: an action for reconveyance is "a legal and equitable remedy granted to the rightful landowner, whose land was wrongfully or erroneously registered in the name of another, to compel the registered owner to transfer or reconvey the land to him." The plaintiff "must allege and prove his ownership of the land in dispute and the defendant's erroneous, fraudulent or wrongful registration of the property." Both were established — ownership by three documents the petitioner never impugned, and wrongful registration by the petitioner's own admission.
The parol evidence rule and its exception: when the terms of an agreement have been reduced to writing, the writing is deemed to contain all the terms agreed upon, and "whatever is not found in the writing is understood to have been waived and abandoned." A party may nevertheless prove a different intent if he pleads the writing's failure to express the true intent by reason of mistake, fraud, inequitable conduct or accident which nevertheless did not prevent a meeting of the minds. The exception opened the door for the petitioner; it did not carry his burden for him.
An admission of fabrication is dispositive of authenticity: by admitting the presentation of a false deed in securing his title, the petitioner rendered moot the issue on which the trial court had dismissed the complaint and relieved the respondent of the burden of proving falsity. And because the Affidavit "merely reflects what is embodied in the Benigna Deed," the admission carried the Affidavit down with it.
The fabrication is itself circumstantial proof against the intent alleged: had the parties truly intended the disputed property to be part of the petitioner's share, "the petitioner obviously need not go at length of fabricating a deed of sale" to support his application for transfer; and nothing in the Affidavit supports the claim that the partition rested on actual possession.
Implied trust and the limits of the Torrens system: one who fraudulently causes the transfer of registration holds the property in trust for the true owner, because "registration does not vest title but merely confirms or records title already existing and vested." The system "cannot be used to protect a usurper from the true owner, nor … as a shield for the commission of fraud, or to permit one to enrich oneself at the expense of others."
Registration of title is not ownership: ownership gives only the right to apply for the transfer of title, and the owner must still comply with the statutory provisions on transferring registered title. Under Section 53 of P.D. No. 1529, a registration procured by a forged deed or other instrument is null and void, and the certificate issued on it "gave the petitioner no better right than the tainted registration" behind it.
Partition terminates co-ownership and fixes the shares: the Agreement was in the nature of a partition agreement, executed the very day the parties acquired the property; its effect was "to terminate the co-ownership and, consequently, to make the previous co-owners the absolute and exclusive owner of the share allotted to him." Neither the absence of a technical description nor the survival of a single certificate of title prevents a valid partition where the allotted portions "were determined and became separately identifiable."
Possession is not a substitute for the document: "just as non-possession does not negate ownership, neither does possession automatically prove ownership, especially in the face of an unambiguous document executed by the parties themselves." The petitioner's testimony proved possession of 4,024 square meters; it did not prove the alleged agreement that possession would measure ownership.
Reconveyance runs only to the rightful owner: the nullity of a certificate and the destination of the land are separate questions. TCT No. 195812 was void, but the 3,020 square meters it covered were not reconveyed, because the respondent admitted that portion is the petitioner's just share.

Doctrine

Doctrines / Rules / Principles Laid Down.

The Leoveras Statement of the Reconveyance Remedy: an action for reconveyance is a legal and equitable remedy granted to the rightful landowner whose land was wrongfully or erroneously registered in the name of another, to compel the registered owner to transfer or reconvey the land to him. Its two elements are the plaintiff's ownership of the land in dispute and the defendant's erroneous, fraudulent or wrongful registration of it, and both must be alleged and proved.
The Rule that Registration Does Not Vest Title: registration "merely confirms or records title already existing and vested." One who fraudulently causes the transfer of registration in his own name holds the title in trust for the true owner under Article 1456 of the Civil Code, and the Torrens system cannot be used to protect a usurper from the true owner, as a shield for the commission of fraud, or to permit one to enrich oneself at the expense of others.
The Forged-Instrument Rule of Section 53: a subsequent registration procured by presenting a forged duplicate certificate of title, a forged deed or any other forged instrument is null and void, and the certificate issued upon it carries no better right than the tainted registration on which it rests. This holds even where the registrant is the true owner of the land, because ownership confers only the right to apply for the transfer of title, and every owner must comply with the statutory provisions governing the transfer of registered title.
The Rule on Partition among Co-owners: an agreement by which co-owners allot definite portions to each of themselves is in the nature of a partition agreement; it terminates the co-ownership and makes each former co-owner the absolute and exclusive owner of the share allotted to him. Thereafter the agreement, and not possession, defines the extent of each party's ownership.

Distinctions / Limitations / Qualifications.

Nullification and reconveyance are distinct dispositions. A certificate void under Section 53 is cancelled without regard to who owns the land; but reconveyance is the remedy of the rightful owner only, so the land under a void certificate is not transferred to a plaintiff who does not own it. TCT No. 195812 was annulled and the 3,020 square meters nevertheless stayed with the petitioner.
Informality does not defeat a partition. That the agreement lacks a technical description of the respective portions, or that the property remains embraced by a single certificate of title, does not prevent a valid partition where the different portions allotted to each were determined and became separately identifiable.
Possession proves neither ownership nor its absence. "Just as non-possession does not negate ownership, neither does possession automatically prove ownership," and least of all against an unambiguous document the parties executed themselves.
Handwriting need not be proved by an expert. Under Section 22, Rule 132 the court itself may compare the questioned signature with writings admitted or treated as genuine, so a party's failure to make the comparison in evidence is not fatal to his claim of forgery.

Topic/Subtopic Integration (Mandatory).

Classification of Relationship: DIRECT.
Integration: the case belongs to the Action for Reconveyance half of the assigned pair and is its cleanest modern statement. Reconveyance concedes the certificate and attacks the holding: it does not reopen the decree, does not seek to set aside the registration proceedings, and does not run from the date of a judgment. Its foundation is the implied trust of Article 1456 — the registered owner keeps the paper but holds the land for whoever really owns it — which is why the Court could say in one sentence that the petitioner holds the disputed property in trust for the respondent and that registration does not vest title.
The contrast the syllabus draws: a petition for relief from judgment under Rule 38 attacks the judgment itself for fraud, accident, mistake or excusable negligence and must be filed within sixty days from notice of the judgment and not more than six months after its entry; a petition to review a decree of registration must be brought within one year from the entry of the decree and is barred once an innocent purchaser for value has acquired an interest. Reconveyance survives both periods, precisely because it does not disturb the decree — which is why it is the remedy that reached a 1994 registration attacked in 1996 on the strength of documents dated 1969.
What this case adds to the contrast: the two questions — is the certificate void? and to whom does the land go? — are answered by different rules. Section 53 answered the first for both certificates; reconveyance answered the second for only one.

Separate Opinions

NOT APPLICABLE / NOT IN RECORD. The Decision was rendered by the Third Division through Associate Justice Arturo D. Brion as ponente, with Associate Justices Conchita Carpio Morales, Lucas P. Bersamin, Martin S. Villarama, Jr. and Maria Lourdes P. A. Sereno concurring. No separate concurring or dissenting opinion was filed.

Cited Laws & Provisions

Every statute, rule, and issuance the decision turns on — the text as written, and the work it does in this case.

Special Law

Section 53, P.D. No. 1529

Presentation of owner's duplicate upon entry of new certificate

Presidential Decree No. 1529 (Property Registration Decree, 1978)

No voluntary instrument shall be registered by the Register of Deeds, unless the owner's duplicate certificate is presented with such instrument, except in cases expressly provided for in this Decree or upon order of the court, for cause shown.

The production of the owner's duplicate certificate, whenever any voluntary instrument is presented for registration, shall be conclusive authority from the registered owner to the Register of Deeds to enter a new certificate or to make a memorandum of registration in accordance with such instrument, and the new certificate or memorandum shall be binding upon the registered owner and upon all persons claiming under him, in favor of every purchaser for value and in good faith.

In all cases of registration procured by fraud, the owner may pursue all his legal and equitable remedies against the parties to such fraud without prejudice, however, to the rights of any innocent holder for value of a certificate of title. After the entry of the decree of registration on the original petition or application, any subsequent registration procured by the presentation of a forged duplicate certificate of title, or a forged deed or other instrument, shall be null and void.

Why it is cited here

The provision that decided the fate of both certificates, including the one covering land Leoveras genuinely owned.

Its last sentence: "After the entry of the decree of registration on the original petition or application, any subsequent registration procured by the presentation of a forged duplicate certificate of title, or a forged deed or other instrument, shall be null and void."

Leoveras admitted in this Court that the Benigna Deed — a 1969 deed of sale purportedly signed by a woman who died in 1944 — was fabricated, offered as a "convenient tool" to facilitate the transfer of title to his name.

The consequence is severe and is the point of the card: ownership and registration are two different things. His ownership of the 3,020-square-meter portion "only gave him the right to apply for the proper transfer of title," and "even as a rightful owner" he "must comply with the statutory provisions on the transfer of registered title to lands." So TCT No. 195812 fell with TCT No. 195813 — "the subsequent issuance of TCT No. 195812 gave the petitioner no better right than the tainted registration which was the basis for the issuance of the same title."

Civil Code

Article 1456, Civil Code

Civil Code of the Philippines (R.A. No. 386), Book IV (Obligations and Contracts), Title V (Trusts (N)), Chapter 3 (Implied Trusts)

If property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes.

Why it is cited here

The engine of every action for reconveyance, and the reason the remedy survives the issuance of a certificate.

"If property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes."

Because the trust arises by operation of law, the registered owner's certificate is not attacked as a certificate at all. He keeps the paper and holds the land for someone else: "By fraudulently causing the transfer of the registration of title over the disputed property in his name, the petitioner holds the title to this disputed property in trust for the benefit of the respondent as the true owner."

That is what lets the Court say in the same breath that registration does not vest title but "merely confirms or records title already existing and vested," and that "the Torrens system of registration cannot be used to protect a usurper from the true owner, nor can it be used as a shield for the commission of fraud, or to permit one to enrich oneself at the expense of others."

Implementing Rules

Section 9, Rule 130, Rules of Court

Evidence of written agreements

Revised Rules on Evidence — Rule 130 (Rules of Admissibility)

When the terms of an agreement have been reduced to writing, it is considered as containing all the terms agreed upon and there can be, between the parties and their successors in interest, no evidence of such terms other than the contents of the written agreement.

However, a party may present evidence to modify, explain or add to the terms of written agreement if he puts in issue in his pleading:

(a) An intrinsic ambiguity, mistake or imperfection in the written agreement;

(b) The failure of the written agreement to express the true intent and agreement of the parties thereto;

(d) The existence of other terms agreed to by the parties or their successors in interest after the execution of the written agreement.

The term "agreement" includes wills. (7a)

4. Interpretation Of Documents

LawPhil posts the pre-2019 text. The 2019 Amendments to the Revised Rules on Evidence (A.M. No. 19-08-15-SC) took effect 1 May 2020 and renumbered and rewrote much of it.

Why it is cited here

The rule Leoveras had to get around, and the door he opened that let his own admission in.

"When the terms of an agreement have been reduced to writing, it is considered as containing all the terms agreed upon and there can be … no evidence of such terms other than the contents of the written agreement." A party may nevertheless prove more if he puts in issue "the failure of the written agreement to express the true intent and agreement of the parties."

The parties' 1969 Agreement allotted 3,020 square meters to Leoveras. He pleaded that it did not express their true intention — that ownership was meant to follow actual possession — and so was entitled to offer parol evidence.

What he offered was the Affidavit of Confirmation of Subdivision, which merely reflects the fabricated Benigna Deed. His admission that the deed was false, coupled with Valdez's denial of his own signature on the Affidavit, "placed in serious doubt the reliability of this document, supposedly the bedrock of the petitioner's defense."

The Court adds the observation that finishes the argument: nothing in the Affidavit says the partition was based on actual possession, and if the parties really had meant to give him the disputed portion "the petitioner obviously need not go at length of fabricating a deed of sale."

Civil Code

Article 1079, Civil Code

Civil Code of the Philippines (R.A. No. 386), Book III (Different Modes of Acquiring Ownership), Title IV (Succession), Chapter 4 (Provisions Common to Testate and Intestate Successions), Subsection 1 (Partition)

Partition, in general, is the separation, division and assignment of a thing held in common among those to whom it may belong. The thing itself may be divided, or its value. (n)

Why it is cited here

What the 1969 Agreement was, in law, and why possession could not enlarge what it gave.

"Partition, in general, is the separation, division and assignment of a thing held in common among those to whom it may belong."

Leoveras and Valdez became co-owners when they bought Josefa's half-share together, but "the parties immediately terminated this state of indivision by executing an Agreement, which is in the nature of a partition agreement."

Two consequences follow, and both defeat the defence:

One of the legal effects of partition "is to terminate the co-ownership and, consequently, to make the previous co-owners the absolute and exclusive owner of the share allotted to him." It is therefore the Agreement, not possession, that defines the extent of ownership — "just as non-possession does not negate ownership, neither does possession automatically prove ownership, especially in the face of an unambiguous document executed by the parties themselves."

And the partition is good despite its informality: that the Agreement "lacks technical description of the parties' respective portions" or that the land "was then still embraced by a single certificate of title could not legally prevent a partition, where the different portions allotted to each were determined and became separately identifiable."

Implementing Rules

Section 22, Rule 132, Rules of Court

How genuineness of handwriting proved

Revised Rules on Evidence — Rule 132 (Presentation of Evidence)

The handwriting of a person may be proved by any witness who believes it to be the handwriting of such person because he has seen the person write, or has seen writing purporting to be his upon which the witness has acted or been charged, and has thus acquired knowledge of the handwriting of such person. Evidence respecting the handwriting may also be given by a comparison, made by the witness or the court, with writings admitted or treated as genuine by the party against whom the evidence is offered, or proved to be genuine to the satisfaction of the judge. (23a)

This is the pre-2019 text, which is what the 2011 decision applies. The 2019 Amendments to the Revised Rules on Evidence (A.M. No. 19-08-15-SC), effective 1 May 2020, renumbered much of Rule 132; check the numbering against the date of any decision citing it.

Why it is cited here

Why the Court of Appeals could find the signature forged although Valdez never put a handwriting expert on the stand.

Evidence of handwriting "may also be given by a comparison, made by the witness or the court, with writings admitted or treated as genuine by the party against whom the evidence is offered."

The trial court had dismissed the complaint partly because Valdez "did not even compare his genuine signature with the signatures appearing in these documents." The Court of Appeals held that omission not fatal, because the rule "allows the court to make its own comparison," and it noted the discrepancy between Valdez's signature on the Affidavit and his signatures elsewhere in the record.

Worth reading beside the death certificate, which is the stronger proof in the case: a document dated 1969 could not have been signed by Benigna Llamas, who died in 1944. Documentary impossibility does the work that expert testimony is usually called on to do.

Source: Leoveras v. Valdez, G.R. No. 169985, June 15, 2011

Cited laws & provisions

Section 53, P.D. No. 1529

Special Law

Presentation of owner's duplicate upon entry of new certificate

Presidential Decree No. 1529 (Property Registration Decree, 1978)

Why it is cited here

The provision that decided the fate of both certificates, including the one covering land Leoveras genuinely owned.

Full entry below ↓

Article 1456, Civil Code

Civil Code

Civil Code of the Philippines (R.A. No. 386), Book IV (Obligations and Contracts), Title V (Trusts (N)), Chapter 3 (Implied Trusts)

If property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes.

Why it is cited here

The engine of every action for reconveyance, and the reason the remedy survives the issuance of a certificate.

Full entry below ↓

Section 9, Rule 130, Rules of Court

Implementing Rules

Evidence of written agreements

Revised Rules on Evidence — Rule 130 (Rules of Admissibility)

However, a party may present evidence to modify, explain or add to the terms of written agreement if he puts in issue in his pleading:

(a) An intrinsic ambiguity, mistake or imperfection in the written agreement;

(b) The failure of the written agreement to express the true intent and agreement of the parties thereto;

(d) The existence of other terms agreed to by the parties or their successors in interest after the execution of the written agreement.

The term "agreement" includes wills. (7a)

4. Interpretation Of Documents

LawPhil posts the pre-2019 text. The 2019 Amendments to the Revised Rules on Evidence (A.M. No. 19-08-15-SC) took effect 1 May 2020 and renumbered and rewrote much of it.

Why it is cited here

The rule Leoveras had to get around, and the door he opened that let his own admission in.

Full entry below ↓

Article 1079, Civil Code

Civil Code

Partition, in general, is the separation, division and assignment of a thing held in common among those to whom it may belong. The thing itself may be divided, or its value. (n)

Why it is cited here

What the 1969 Agreement was, in law, and why possession could not enlarge what it gave.

"Partition, in general, is the separation, division and assignment of a thing held in common among those to whom it may belong."

Two consequences follow, and both defeat the defence:

Full entry below ↓

Section 22, Rule 132, Rules of Court

Implementing Rules

How genuineness of handwriting proved

Revised Rules on Evidence — Rule 132 (Presentation of Evidence)

Why it is cited here

Why the Court of Appeals could find the signature forged although Valdez never put a handwriting expert on the stand.

Evidence of handwriting "may also be given by a comparison, made by the witness or the court, with writings admitted or treated as genuine by the party against whom the evidence is offered."

Full entry below ↓

Facts

OCT No. 24695 covered 28,171 square meters in Poblacion, Manaoag, Pangasinan, registered to Maria Sta. Maria (three-fourths) and Dominga Manangan (one-fourth) pro indiviso. In September 1932 Sta. Maria sold her three-fourths share to Benigna Llamas, and the sale was annotated at the back of the OCT. Benigna died in 1944, willing her three-fourths equally to her sisters Alejandra and Josefa Llamas. (That death date is the whole case. It is what makes the deed Leoveras later presented an impossibility, and it was proved by a document — Benigna's death certificate — rather than by expert opinion on a signature.)
On June 14, 1969 Alejandra's heirs sold her one-half share, roughly 10,564 square meters, to Casimero Valdez; and on the same day Josefa sold her own one-half — the subject property — to Valdez and Modesto Leoveras together.
Also on June 14, 1969, the two buyers executed an Agreement partitioning what they had just bought. It recites that "our respective share consist of 5,282.13 square meter each," then covenants that Leoveras takes "3,020 square meters residential portion on the northern part near the Municipal road" and Valdez takes 7,544.27 square meters. (The Agreement gives Leoveras less than the arithmetic half it had just recited, which is exactly what he would later say was a mistake — and exactly what the Court would hold he was bound by.)
On June 8, 1977 the parties executed an Affidavit of Adverse Claim over the subject property, then took possession of their respective portions and declared them for taxation. Valdez declared his in December 1987; Leoveras declared the 1,004-square-meter portion only in September 1994, under Tax Declaration No. 9393, despite claiming exclusive and adverse possession of it since 1969.
In 1996 Valdez asked the Register of Deeds of Lingayen what was needed to transfer title to his allotted portion, and learned that Leoveras already held two certificates in his own name — TCT No. 195812 over 3,020 square meters and TCT No. 195813 over 1,004 square meters, a total of 4,024.
The Register of Deeds could not find the record of OCT No. 24695, and instead furnished Valdez the documents on which the transfer had been made: two deeds of absolute sale dated June 14, 1969 purportedly executed by Sta. Maria; the Benigna Deed, also dated June 14, 1969, by which Benigna Llamas purports to sell 7,544, 4,024 and 8,689 square meters to Valdez, Leoveras and Virgilia Li Meneses; a Subdivision Plan of PSU 21864; and an Affidavit of Confirmation of Subdivision dated May 3, 1994 assigning Lot 2 (3,020) and Lot 3 (1,004) to Leoveras, Lot 4 (7,544) to Valdez, Lot 5 (8,689) to Meneses and Lot 6 (7,043) to Manangan. (Two impossibilities sit in that bundle: Benigna could not sell in 1969 because she died in 1944, and Sta. Maria could not sell in 1969 because she had already sold to Benigna in 1932.)
On June 21, 1996 Valdez sued for Annulment of Title, Reconveyance and Damages, seeking reconveyance of the 1,004-square-meter disputed property covered by TCT No. 195813 only, on the ground that Leoveras was entitled to the 3,020 square meters the Agreement gave him and nothing more. He attacked the Benigna Deed with the death certificate and denied his signature on the Affidavit.
On June 23, 2000 the RTC of Urdaneta City, Branch 46, dismissed the complaint, holding that Valdez failed to prove the documents fabricated and had not even compared his genuine signature with the questioned ones. On March 31, 2005 the Court of Appeals reversed in CA-G.R. CV No. 68549, declaring both TCTs null and void and directing Leoveras to reconvey both parcels; reconsideration was denied October 6, 2005. The Third Division decided on June 15, 2011.

Arguments of the Parties

Issue

Ruling

Ratio

Reconveyance has two elements and Valdez proved both. The plaintiff must show his own ownership and the defendant's erroneous, fraudulent or wrongful registration. Ownership came from three documents Leoveras never impugned; the wrongful registration came from Leoveras's own mouth.
An admission of fabrication does the work of a forgery trial. Once Leoveras conceded in this Court that the Benigna Deed was made up, the authenticity issue on which the RTC had dismissed the case became moot, and Valdez was relieved of the burden of proving falsity.
The Affidavit cannot outlive the deed it rests on. The Affidavit of Confirmation of Subdivision "merely reflects what is embodied in the Benigna Deed," so the admission plus Valdez's denial of his signature put "in serious doubt the reliability of this document, supposedly the bedrock of the petitioner's defense."
The fabrication is itself evidence against the intention it was meant to prove. "Curiously, if the parties truly intended to include in the petitioner's share the disputed property, the petitioner obviously need not go at length of fabricating a deed of sale" — and nothing in the Affidavit says the division was based on actual possession.
A trust arises by operation of law, not by decree. One who fraudulently procures registration holds the land in trust for the true owner; Article 1456 supplies the trust, and registration confirms title, it does not create it.
Ownership is not registration. Even a rightful owner "must comply with the statutory provisions on the transfer of registered title," and a certificate obtained by presenting a forged instrument is null and void under Section 53 whoever the real owner is. The Court "simply cannot allow the petitioner's attempt to get around the proper procedure for registering the transfer of title in his name by using spurious documents."
Partition, once made, fixes the shares. The Agreement terminated the co-ownership under Article 1079; want of a technical description, or the survival of a single mother title, does not undo it where the portions were determined and separately identifiable. Leoveras's own testimony proved only that he possessed 4,024 square meters, never that the parties had agreed possession would measure ownership.
Tax declarations cut against him. Valdez declared his 7,544 square meters in December 1987 — matching the Agreement exactly — while Leoveras declared the 1,004-square-meter portion only in September 1994, though claiming adverse possession of it since 1969.
Reconveyance runs to the rightful owner only. A void certificate is cancelled; but the land under it goes back to whoever owns it, and Valdez admitted the 3,020 square meters are not his.

Doctrine

Doctrines / Rules / Principles Laid Down.

The nature and elements of an action for reconveyance: it is a legal and equitable remedy granted to the rightful landowner whose land was wrongfully or erroneously registered in the name of another, to compel the registered owner to transfer or reconvey it. The plaintiff must allege and prove (i) his ownership of the land in dispute and (ii) the defendant's erroneous, fraudulent or wrongful registration of it.
Registration does not vest title: it "merely confirms or records title already existing and vested." One who fraudulently causes the transfer of registration in his name holds the title in trust for the true owner under Article 1456, and "the Torrens system of registration cannot be used to protect a usurper from the true owner, nor can it be used as a shield for the commission of fraud, or to permit one to enrich oneself at the expense of others."
A registration procured by a forged instrument is void even as to a rightful owner: ownership gives only the right to apply for the transfer of title, and every owner "must comply with the statutory provisions on the transfer of registered title to lands." Under Section 53 of P.D. No. 1529, a subsequent registration procured by presenting a forged deed or other instrument is null and void, and the resulting certificate carries no better right than the tainted registration behind it.
An agreement allotting portions among co-owners is a partition: it terminates the co-ownership under Article 1079 and makes each former co-owner the absolute and exclusive owner of the share allotted to him, and it — not possession — defines the extent of ownership thereafter.

Distinctions / Limitations / Qualifications.

Reconveyance is the remedy of the rightful owner only. Nullifying a void certificate and reconveying the land it covered are two different dispositions. The Court cancelled TCT No. 195812 because it was procured by a forged deed, yet refused to reconvey the land under it, since the plaintiff himself admitted that portion was the defendant's just share.
Partition is not defeated by informality. That the Agreement carries no technical description, or that the property was still covered by a single certificate of title, does not prevent a valid partition where the portions allotted were determined and became separately identifiable.
Possession neither proves nor negates ownership. "Just as non-possession does not negate ownership, neither does possession automatically prove ownership," least of all against an unambiguous document the parties executed themselves.
The parol evidence door swings both ways. A party who pleads that the writing fails to express the parties' true intent may offer evidence to modify, explain or add to it under Section 9, Rule 130 — but the evidence he offers is then subject to attack, and here it destroyed his own case.

Topic/Subtopic Integration (Mandatory).

Classification of Relationship: DIRECT to Action for Reconveyance; the Petition for Relief from Judgment half of the pair is the contrast the case is assigned to illuminate.
Integration: the case is the clean statement of what an action for reconveyance is — a remedy that concedes the certificate and attacks the holding. It does not reopen a decree, does not ask that the registration proceedings be set aside, and does not depend on any period running from a judgment; it asks only that a registered owner who holds under an implied trust be made to convey. That is what distinguishes it from a petition for relief from judgment under Rule 38, which attacks the judgment itself and must be brought within sixty days from notice and not more than six months from entry, and from a petition to review a decree of registration, which must be filed within one year from entry of the decree and fails altogether once an innocent purchaser for value has acquired an interest.
The practical lesson the case adds: reconveyance reaches the land, not the paper, so the two dispositions can part company. Both of Leoveras's certificates were void — the forged-instrument rule of Section 53 knows nothing of who really owns the land — but only one parcel was reconveyed, because the plaintiff in reconveyance recovers what is his and nothing more.

Separate Opinions

None. Justice Arturo D. Brion wrote for the Third Division, with Justices Conchita Carpio Morales, Lucas P. Bersamin, Martin S. Villarama, Jr. and Maria Lourdes P. A. Sereno concurring.

Full Digest — Recitation Format

Facts

Originally: Maria Sta. Maria and Dominga Manangan were the registered owners — three-fourths and one-fourth pro indiviso respectively — of a parcel of land in Poblacion, Manaoag, Pangasinan, covered by Original Certificate of Title No. 24695, with an area of 28,171 square meters.
In September 1932: Sta. Maria sold her three-fourths share to Benigna Llamas. The sale was duly annotated at the back of OCT No. 24695.
In 1944: Benigna died, and by will left her three-fourths share equally to her sisters Alejandra Llamas and Josefa Llamas, so that each owned one-half of Benigna's three-fourths share.
On June 14, 1969: Alejandra's heirs sold their predecessor's one-half share — roughly 10,564 square meters — to respondent Casimero Valdez, as evidenced by a Deed of Absolute Sale.
Also on June 14, 1969: Josefa sold her own one-half share (the subject property) to the respondent and the petitioner Modesto Leoveras, as evidenced by another Deed of Absolute Sale.
On the same date: The respondent and the petitioner executed an Agreement allotting their portions of the subject property. It recites that they are the absolute owners of the subject property, that "in said deed of sale … our respective share consist of 5, 282.13 [one-half of 10,564 square meters] square meter each," and then covenants: "Modesto Leoveras – 3,020 square meters residential portion on the northern part near the Municipal road of Poblacion Pugaro, Manaoag, Pangasinan; Casimero Valdez – 7,544.27 square meters of the parcel of land described above."
On June 8, 1977: The petitioner and the respondent executed an Affidavit of Adverse Claim over the subject property. The parties took possession of their respective portions and declared them in their own names for taxation purposes.
In December 1987: The respondent declared for taxation purposes the portion he claims; the total area of the properties declared, 7,544 square meters, is equivalent to the area allotted to him under the Agreement.
In September 1994: The petitioner declared the 1,004-square-meter portion under Tax Declaration No. 9393, notwithstanding his claim of exclusive and adverse possession of it since 1969.
In 1996: The respondent asked the Register of Deeds of Lingayen, Pangasinan about the requirements for the transfer of title over the portion allotted to him. To his surprise, he learned that the petitioner had already obtained two transfer certificates of title in his own name: TCT No. 195812, covering 3,020 square meters, and TCT No. 195813, covering 1,004 square meters — a total of 4,024 square meters.
The Register of Deeds could not find the record of OCT No. 24695, and instead furnished the respondent with the petitioner's documents: (1) two deeds of absolute sale dated June 14, 1969, both purportedly executed by Sta. Maria, conveying an unspecified portion of OCT No. 24695 — 11,568 square meters to the respondent and petitioner, and 8,689 square meters to one Virgilia Li Meneses; (2) the Benigna Deed, also dated June 14, 1969, purportedly executed by Benigna, selling 7,544, 4,024 and 8,689 square meters respectively to Casimero Valdez, Modesto Leoveras and Virgilia Meneses; (3) the Subdivision Plan of PSU 21864 of OCT No. 24695; and (4) an Affidavit of Confirmation of Subdivision dated May 3, 1994, in which Meneses, Manangan, Leoveras and Valdez confirm a subdivision assigning Lot 2 (3,020 sq. m.) and Lot 3 (1,004 sq. m.) to Modesto Leoveras, Lot 4 (7,544 sq. m.) to Casimero Valdez, Lot 5 (8,689 sq. m.) to Virgilia Meneses and Lot 6 (7,043 sq. m.) to Dominga Manangan.
On June 21, 1996: The respondent filed a complaint for Annulment of Title, Reconveyance and Damages against the petitioner, seeking the reconveyance of the 1,004-square-meter portion (the disputed property) covered by TCT No. 195813, on the ground that the petitioner is entitled only to the 3,020 square meters identified in the parties' Agreement. He prayed for the cancellation of the petitioner's documents, the cancellation of TCT No. 195813 and its reconveyance to him, the cancellation and nullification of TCT No. 195812, and the issuance of title in his name over 17,104 square meters of OCT No. 24695.
In support of the complaint: The respondent assailed the Benigna Deed by presenting Benigna's death certificate, arguing that she could not have executed in 1969 a deed purporting to convey 4,024 square meters to the petitioner because she already died in 1944; that neither could Sta. Maria have sold her three-fourths share in 1969, having already sold it to Benigna in 1932; and he denied his purported signature appearing in the Affidavit.
On June 23, 2000: The Regional Trial Court, Branch 46, Urdaneta City, Pangasinan dismissed the complaint, ruling that the respondent failed to preponderantly prove that the Benigna Deed and the Affidavit are fabricated and that consequently no ground exists to nullify the petitioner's titles, observing that the respondent "did not even compare his genuine signature with the signatures appearing in these documents."
On March 31, 2005: The Court of Appeals reversed the RTC in CA-G.R. CV No. 68549, ruling against the authenticity of the Benigna Deed and the Affidavit. It gave weight to Benigna's death certificate, noted the discrepancy between the respondent's signature in the Affidavit and his signatures on record, and held that the respondent's failure to compare his genuine signature is not fatal since Section 22, Rule 132 allows the court to make its own comparison. It declared TCT Nos. 195812 and 195813 null and void and directed the petitioner to reconvey the subject parcels of land to the respondent.
On October 6, 2005: The Court of Appeals denied reconsideration; the petitioner then filed the present appeal by certiorari.
On June 15, 2011: The Supreme Court, Third Division, promulgated the Decision partially granting the petition and modifying the Court of Appeals rulings.

Arguments of the Parties

Petitioner (Modesto Leoveras).

Petitioner claims that the Court of Appeals committed "gross misappreciation of the facts" by going beyond what the respondent sought in his complaint, since the respondent sought the reconveyance only of the disputed property — the parcel covered by TCT No. 195813 — yet the appellate court ordered the reconveyance of both parcels covered by his titles.
Petitioner asserts that after the sale the parties physically partitioned the subject property and possessed their respective portions, thereby setting the limits of their ownership, and that the parties had delineated their respective portions even before they acquired the property in 1969, agreeing that upon acquisition each would own the portion as delineated.
Petitioner claims that the area he actually possessed and subsequently acquired has a total area of 4,024 square meters, which he subdivided into two portions covered by the two titles in question; and that in signing the Agreement he was led to believe, on the parties' "rough estimation," that the area he possessed was only 3,020 square meters, contrary to the parties' real intention that ownership would be based on actual possession.
Petitioner claims that the respondent voluntarily participated in executing the Affidavit, which corrected the mistake in the previously executed Agreement and confirmed his ownership of the disputed property.
Petitioner admits that the Benigna Deed is "fabricated", but hastens to add that it was designed only (i) to affirm the "true intent and agreement" of the parties on the extent of their ownership as shown by their actual physical possession, and (ii) as a "convenient tool" to facilitate the transfer of title to his name.

Respondent (Casimero Valdez).

Respondent claims that since the petitioner himself admitted using a spurious document in obtaining his titles — as alleged in the complaint and as found by the Court of Appeals — the appellate court correctly cancelled the petitioner's titles.
Respondent claims that the petitioner forged his signature in the Affidavit to make it appear that he agreed to the division indicated in that document.
Respondent defends the reconveyance of both parcels by arguing that if the distribution in the Affidavit is followed, the "original intendment" of the parties on their shares of the subject property would be "grievously impaired."

Common Ground.

The petitioner does not dispute the due execution and the authenticity of the Deed of Absolute Sale executed by Josefa, the parties' Affidavit of Adverse Claim, and particularly the Agreement; his position is that the Agreement does not reflect the parties' true intention.
The respondent himself admitted that the 3,020-square-meter portion covered by TCT No. 195812 is the petitioner's just share in the subject property.
There is no dispute that the 3,020-square-meter portion is the same parcel identified as Lot No. 2 — not the subject of the respondent's action for reconveyance — in the Affidavit and the Subdivision Plan the petitioner presented to the Register of Deeds.

Issue

SECONDARY ISSUES.

Whether the Court of Appeals erred in ordering the reconveyance of both parcels of land covered by the petitioner's titles, when the complaint sought the reconveyance only of the parcel covered by TCT No. 195813.
Whether the parties' 1969 Agreement or the petitioner's actual possession determines the extent of their respective ownership of the subject property.
Whether parol evidence — in the form of the 1994 Affidavit of Confirmation of Subdivision — was properly received to show that the Agreement failed to express the parties' true intention.

Ruling

Dispositive portion (verbatim). The final dispositive portion of the Supreme Court in G.R. No. 169985, dated June 15, 2011, is quoted verbatim as follows:

"WHEREFORE, the petition is partially GRANTED. The assailed decision and resolution of the Court of Appeals are MODIFIED. Accordingly, the petitioner is directed to RECONVEY to the respondent the parcel of land covered by TCT No. 195813. Costs against petitioner.

SO ORDERED."

Ratio

The elements of reconveyance: an action for reconveyance is "a legal and equitable remedy granted to the rightful landowner, whose land was wrongfully or erroneously registered in the name of another, to compel the registered owner to transfer or reconvey the land to him." The plaintiff "must allege and prove his ownership of the land in dispute and the defendant's erroneous, fraudulent or wrongful registration of the property." Both were established — ownership by three documents the petitioner never impugned, and wrongful registration by the petitioner's own admission.
The parol evidence rule and its exception: when the terms of an agreement have been reduced to writing, the writing is deemed to contain all the terms agreed upon, and "whatever is not found in the writing is understood to have been waived and abandoned." A party may nevertheless prove a different intent if he pleads the writing's failure to express the true intent by reason of mistake, fraud, inequitable conduct or accident which nevertheless did not prevent a meeting of the minds. The exception opened the door for the petitioner; it did not carry his burden for him.
An admission of fabrication is dispositive of authenticity: by admitting the presentation of a false deed in securing his title, the petitioner rendered moot the issue on which the trial court had dismissed the complaint and relieved the respondent of the burden of proving falsity. And because the Affidavit "merely reflects what is embodied in the Benigna Deed," the admission carried the Affidavit down with it.
The fabrication is itself circumstantial proof against the intent alleged: had the parties truly intended the disputed property to be part of the petitioner's share, "the petitioner obviously need not go at length of fabricating a deed of sale" to support his application for transfer; and nothing in the Affidavit supports the claim that the partition rested on actual possession.
Implied trust and the limits of the Torrens system: one who fraudulently causes the transfer of registration holds the property in trust for the true owner, because "registration does not vest title but merely confirms or records title already existing and vested." The system "cannot be used to protect a usurper from the true owner, nor … as a shield for the commission of fraud, or to permit one to enrich oneself at the expense of others."
Registration of title is not ownership: ownership gives only the right to apply for the transfer of title, and the owner must still comply with the statutory provisions on transferring registered title. Under Section 53 of P.D. No. 1529, a registration procured by a forged deed or other instrument is null and void, and the certificate issued on it "gave the petitioner no better right than the tainted registration" behind it.
Partition terminates co-ownership and fixes the shares: the Agreement was in the nature of a partition agreement, executed the very day the parties acquired the property; its effect was "to terminate the co-ownership and, consequently, to make the previous co-owners the absolute and exclusive owner of the share allotted to him." Neither the absence of a technical description nor the survival of a single certificate of title prevents a valid partition where the allotted portions "were determined and became separately identifiable."
Possession is not a substitute for the document: "just as non-possession does not negate ownership, neither does possession automatically prove ownership, especially in the face of an unambiguous document executed by the parties themselves." The petitioner's testimony proved possession of 4,024 square meters; it did not prove the alleged agreement that possession would measure ownership.
Reconveyance runs only to the rightful owner: the nullity of a certificate and the destination of the land are separate questions. TCT No. 195812 was void, but the 3,020 square meters it covered were not reconveyed, because the respondent admitted that portion is the petitioner's just share.

Doctrine

Doctrines / Rules / Principles Laid Down.

The Leoveras Statement of the Reconveyance Remedy: an action for reconveyance is a legal and equitable remedy granted to the rightful landowner whose land was wrongfully or erroneously registered in the name of another, to compel the registered owner to transfer or reconvey the land to him. Its two elements are the plaintiff's ownership of the land in dispute and the defendant's erroneous, fraudulent or wrongful registration of it, and both must be alleged and proved.
The Rule that Registration Does Not Vest Title: registration "merely confirms or records title already existing and vested." One who fraudulently causes the transfer of registration in his own name holds the title in trust for the true owner under Article 1456 of the Civil Code, and the Torrens system cannot be used to protect a usurper from the true owner, as a shield for the commission of fraud, or to permit one to enrich oneself at the expense of others.
The Forged-Instrument Rule of Section 53: a subsequent registration procured by presenting a forged duplicate certificate of title, a forged deed or any other forged instrument is null and void, and the certificate issued upon it carries no better right than the tainted registration on which it rests. This holds even where the registrant is the true owner of the land, because ownership confers only the right to apply for the transfer of title, and every owner must comply with the statutory provisions governing the transfer of registered title.
The Rule on Partition among Co-owners: an agreement by which co-owners allot definite portions to each of themselves is in the nature of a partition agreement; it terminates the co-ownership and makes each former co-owner the absolute and exclusive owner of the share allotted to him. Thereafter the agreement, and not possession, defines the extent of each party's ownership.

Distinctions / Limitations / Qualifications.

Nullification and reconveyance are distinct dispositions. A certificate void under Section 53 is cancelled without regard to who owns the land; but reconveyance is the remedy of the rightful owner only, so the land under a void certificate is not transferred to a plaintiff who does not own it. TCT No. 195812 was annulled and the 3,020 square meters nevertheless stayed with the petitioner.
Informality does not defeat a partition. That the agreement lacks a technical description of the respective portions, or that the property remains embraced by a single certificate of title, does not prevent a valid partition where the different portions allotted to each were determined and became separately identifiable.
Possession proves neither ownership nor its absence. "Just as non-possession does not negate ownership, neither does possession automatically prove ownership," and least of all against an unambiguous document the parties executed themselves.
Handwriting need not be proved by an expert. Under Section 22, Rule 132 the court itself may compare the questioned signature with writings admitted or treated as genuine, so a party's failure to make the comparison in evidence is not fatal to his claim of forgery.

Topic/Subtopic Integration (Mandatory).

Classification of Relationship: DIRECT.
Integration: the case belongs to the Action for Reconveyance half of the assigned pair and is its cleanest modern statement. Reconveyance concedes the certificate and attacks the holding: it does not reopen the decree, does not seek to set aside the registration proceedings, and does not run from the date of a judgment. Its foundation is the implied trust of Article 1456 — the registered owner keeps the paper but holds the land for whoever really owns it — which is why the Court could say in one sentence that the petitioner holds the disputed property in trust for the respondent and that registration does not vest title.
The contrast the syllabus draws: a petition for relief from judgment under Rule 38 attacks the judgment itself for fraud, accident, mistake or excusable negligence and must be filed within sixty days from notice of the judgment and not more than six months after its entry; a petition to review a decree of registration must be brought within one year from the entry of the decree and is barred once an innocent purchaser for value has acquired an interest. Reconveyance survives both periods, precisely because it does not disturb the decree — which is why it is the remedy that reached a 1994 registration attacked in 1996 on the strength of documents dated 1969.
What this case adds to the contrast: the two questions — is the certificate void? and to whom does the land go? — are answered by different rules. Section 53 answered the first for both certificates; reconveyance answered the second for only one.

Separate Opinions

NOT APPLICABLE / NOT IN RECORD. The Decision was rendered by the Third Division through Associate Justice Arturo D. Brion as ponente, with Associate Justices Conchita Carpio Morales, Lucas P. Bersamin, Martin S. Villarama, Jr. and Maria Lourdes P. A. Sereno concurring. No separate concurring or dissenting opinion was filed.