21.11 Naval V CA

NAVAL vs.
COURT OF APPEALS ET AL
G.R. No. 167412
February 22, 2006
FACTS:
In 1969, Ildefonso Naval sold a parcel of land located in Camarines Sur to Galarosa.
The sale was recorded in the RD pursuant to Act No. 3344, the law governing
registrations of all instruments on unregistered lands.
Subsequently, Galarosa sold portions of the land to respondents Balilla, Nacion, spouses
Moya, and Camalla. All buyers occupied the portion they bought, built improvements
thereon, and paid the taxes due thereto.
The controversy arose when petitioner Juanita Naval, the great granddaughter of
Ildefonso, was issued by the RD an OCT covering a portion of the subject land. She
claimed that she bought the subject land from Ildefonso in 1972.
Petitioner Juanita filed a complaint for recovery of possession against Aguirre,

Balila, Moya, and Nacion. However, the case was dismissed without prejudice for failure
to prosecute the action for an unreasonable length of time.
Almost 20 years later petitioner re-filed the complaint for recovery of possession with
damages before the MCTC, against Camalla, Balila, Aguirre, Nacion and Moya. After
trial, the MCTC rendered its decision in favor of the plaintiff and against defendants,
declaring: the plaintiff to be the legal owner of the land, ordering defendants Camalla,
Balila, Balila, Aguirre and Nacion to vacate the property in question and to deliver its
possession to the plaintiff, and ordering Moya to vacate the land occupied by her and to
relinquish its possession to the plaintiff;
Aggrieved, respondents appealed the decision to the RTC of Naga City, which
affirmed in toto the assailed decision. Respondents thereafter elevated the case to the
CA. Finding the prior registration of the deed of sale between Ildefonso and Galaura
with the RD as a constructive notice to subsequent buyers, the appellate court reversed
the decision of the RTC. Hence, this petition for review.
ISSUE:
Who has the superior right to a parcel of land sold to different buyers at different times
by its former owner.
HELD:
RESPONDENTS
The petition is DENIED. The Decision of the CA and the denial of the motion for
reconsideration are AFFIRMED.
a. It is not disputed that the subject land belonged to Ildefonso and that it
was not registered under the Torrens System when it was sold to Gregorio in 1969 and
to the petitioner in 1972. Further, the deed of sale between Ildefonso and Gregorio was
registered with the RD of Camarines Sur pursuant to Act No. 3344.
In holding that respondents have a better right to possess the subject land in view of
the bona fide registration of the sale with the RD of Camarines Sur by Ildefonso and
Gregorio, the CA applied Article 1544 of the Civil Code.
While we agree with the appellate court that respondents have superior right over the
petitioner on the subject property, we find Article 1544 inapplicable to the case at
bar since the subject land was unregistered at the time of the first sale. The
registration contemplated under this provision has been held to refer to
registration under the Torrens System, which considers the act of registration as
the operative act that binds the land. Thus, in Carumba v. Court of Appeals , we held
that Article 1544 of the Civil Code has no application to land not registered under
Torrens System.
The law applicable therefore is Act No. 3344, which provides for the registration of all
instruments on land neither covered by the Spanish Mortgage Law nor the Torrens
System. Under this law, registration by the first buyer is constructive notice to
the second buyer that can defeat his right as such buyer in good faith; it binds third
person who may subsequently deal with the same property.
b. Even if petitioner argues that she purchased and registered the subject land in good
faith and without knowledge of any adverse claim thereto, respondents still have
superior right over the disputed property. We held in Rayos v. Reyes32 that:
“[T]he issue of good faith or bad faith of the buyer is relevant only where the
subject of the sale is registered land and the purchaser is buying the same from the
registered owner whose title to the land is clean x x x in such case the purchaser who
relies on the clean title of the registered owner is protected if he is a purchaser in good
faith for value.” Since the properties in question are unregistered lands, petitioners as
subsequent buyers thereof did so at their peril. Their claim of having bought the land in
good faith, i.e., without notice that some other person has a right to or interest in the
property, would not protect them if it turns out, as it actually did in this case, that their
seller did not own the property at the time of the sale.
c. It is an established principle that no one can give what one does not have, nemo dat
quod non habet. Accordingly, one can sell only what one owns or is authorized to sell,
and the buyer can acquire no more than what the seller can transfer legally.In the case
at bar, since Ildefonso no longer owned the subject land at the time of the sale to the
petitioner, he had nothing to sell and the latter did not acquire any right to it.
d. Even if we apply Article 1544, the facts would nonetheless show that respondents
and their predecessors-in-interest registered first the source of their ownership and
possession, i.e., the 1969 deed of sale, and possessed the subject land at the earliest
time. Applying the doctrine of “priority in time, priority in rights” or “ prius tempore,
potior jure,” respondents are entitled to the ownership and possession of the subject
land.
e. True, Section 32 of Presidential Decree No. 1529 provides that “[u]pon the
expiration of said period of one year, the decree of registration and the certificate of
title shall become incontrovertible.” However, it does not deprive an aggrieved party of
a remedy in law. What cannot be collaterally attacked is the certificate of title and not
the title or ownership which is represented by such certificate. Ownership is different
from a certificate of title. The fact that petitioner was able to secure a title in her name
did not operate to vest ownership upon her of the subject land. Registration of a piece
of land under the Torrens System does not create or vest title, because it is not a mode
of acquiring ownership. A certificate of title is merely an evidence of ownership or title
over the particular property described therein. It cannot be used to protect a usurper
from the true owner; nor can it be used as a shield for the commission of fraud; neither
does it permit one to enrich himself at the expense of others. Its issuance in favor of a
particular person does not foreclose the possibility that the real property may be co-
owned with persons not named in the certificate, or that it may be held in trust for
another person by the registered owner.
As correctly held by the Court of Appeals, notwithstanding the indefeasibility of the

Torrens title, the registered owner may still be compelled to reconvey the registered
property to its true owners. The rationale for the rule is that reconveyance does not set
aside or re-subject to review the findings of fact of the Bureau of Lands. In an action
for reconveyance, the decree of registration is respected as incontrovertible. What is
sought instead is the transfer of the property or its title which has been
wrongfully or erroneously registered in another person’s name, to its rightful
or legal owner, or to the one with a better right.
Finally, the Court of Appeals correctly held that an action for reconveyance does not
prescribe when the plaintiff is in possession of the land to be reconveyed, as in this
case. The reason for this is that one who is in actual possession of a piece of land
claiming to be the owner thereof may wait until his possession is disturbed or his title is
attacked before taking steps to vindicate his right, the reason for the rule being, that
his undisturbed possession gives him a continuing right to seek the aid of a court of
equity to ascertain and determine the nature of the adverse claim of a third party and
its effect on his own title, which right can be claimed only by one who is in possession.
We hold that in such a situation the right to quiet title to the property, to seek its
reconveyance and annul any certificate of title covering it, accrued only from the time
the one in possession was made aware of a claim adverse to his own, and it is only
then that the statutory period of prescription commences to run against such possessor.

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NAVAL vs.

Petitioner Juanita filed a complaint for recovery of possession against Aguirre,

As correctly held by the Court of Appeals, notwithstanding the indefeasibility of the

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