Es Cheat
Es Cheat
Es Cheat
section 750 of the Code of Civil Procedure. We, therefore, hold that the court did
not commit the error assigned in ruling that the petition does not allege sufficient
facts justifying the escheat of the hacienda in favor of the municipality of San
Pedro and in finally dismissing the same. Having reached this conclusion we do
not believe it necessary to go into further considerations regarding the
personality of the municipality of San Pedro and the court's lack of jurisdiction.
5. The last assignment of error does not require any further consideration. The
questions raised therein have already been passed upon in the preceding
considerations, with the exception of the order to pay costs. With respect
thereto, there is no reason why they should not be taxed against the petitioners,
they being defeated party (section 487, Code of Civil Procedure). That no trial
was had is not a bar to the imposition of costs under the provisions of section
492.
For the foregoing reasons, the appealed order and resolution are affirmed, with
the costs of this instance against the petitioners and appellants. So ordered.
Avancea, C.J., Villa-Real, Abad Santos, Diaz, Laurel and Concepcion, JJ.,
concur.
the minor Lay Chuyting, residing in China, who was a son of the deceased Lao
Ta, the latter a brother of the decedent Bernardo Rafanan Lao Sayco, and that,
therefore, Lay Chuyting was the latter's nephew, and not his son, as previously
erroneously stated in the course of these proceedings. Petitioner stated that he
desired to take the depositions of witnesses in the city of Cebu, in order to
establish the facts set forth by him and asked that the hearing of the case be set
for the month of June, 1907.
A hearing in these proceedings was had on February 20, 1908, after notice had
been served on all who might have any interest in the intestate succession
concerned, and after the publication of the decrees for three weeks prior to the
date set. In view of the dispositions of witnesses presented at the trial, the court,
on March 5, 1908, rendered judgment ordering that the property left by the
decedent, Bernardo Rafanan Lao Sayco, known by the name of Saya, be
assigned to the municipality of Mambajao, Province of Misamis, to be
administered by its municipal council and placed at the disposal of the school in
the same manner as other property intended for the same use. It was further
ordered that the administrator of the intestate estate, after paying the actual
expenses and debts chargeable thereto, deliver the remainder to the
municipality of Mambajao, and afterwards report to the Court of First Instance
his compliance with and fulfillment of the order. From this judgment the said
administrator and guardian of the minor Lay Chuyting appealed, for which
purpose a certified copy of the record was forwarded to the clerk of this court.
This case concerns the revision to the State of certain property which was left at
death by the Chinaman Bernardo Rafanan Lao Sayco, alias Saya, who died in
the pueblo of Mambajao, Province of Misamis apparently without having
executed any will during his lifetime and without leaving any known heirs in said
locality.
Section 750 of the Code of Civil Procedure, applicable to the case, reads as
follows:
When a person dies intestate, seized of real or personal property in the
Philippine Islands, leaving no heir or person by law entitled to the same,
the president and municipal council of the municipality where the
deceased last resided, if he was an inhabitant of these Islands, or of the
municipality in which he had estate, if he resided out of the Islands,
may, on behalf of the municipality, file a petition with the Court of First
Instance of the province for an inquisition in the premises; the court shall
thereupon appoint a time and place of hearing and deciding on such
petition, and cause a notice thereof to be published in some newspaper
of general circulation in the province of which the deceased was last an
inhabitant, if within the Philippine Islands, and if not in some newspaper
of general circulation in the province in which he had estate. The notice
shall recite the substance of the facts and request set forth in the
petition, the time and place at which persons claiming the estate may
appear and be heard before the court, and shall be published at least
six weeks successively, the last of which publications shall be at least
six weeks before the time appointed by the court to make inquisition.
From the record of these proceedings it does not appear that there was made,
at the request of counsel for the president and the municipal council of
Mambajao, the inquisition provided by law, specified in the preinserted section,
for the record is not accompanied by any certified copy of the investigatory of
the real and personal property that belonged to the said decedent, with a
statement of the places where the realty is located. Neither is it shown to have
ascertained whether the deceased Chinaman executed any will during his
lifetime, or whether the deceased Chinaman executed any will during his
lifetime, or whether he left in Mambajao or in any other place in these Islands
any relative entitled to inherit from him, information in regard to which points
might be furnished by those who were his friends or with whom he had friendly
dealings during his lifetime. Moreover, the notice summoning the persons who
believed they were entitled to his property should have been published for at
least six consecutive weeks, and not for three as was directed in the order of
December 16, 1907.
In order that the property which belonged to the decedent Bernardo Rafanan
Lao Sayco, situated in these Islands, may be decreed to have reverted to the
Senate, pursuant to the provisions of section 751 of the Code of Civil Procedure,
it is indispensable that the requirements contained in the above-quoted section
of the said code should have been complied with by making the inquisition with
regard to the matters specified, at the instance of the interested municipality.
Furthermore, the person who lays claim to the property left by the decedent at
death, as the latter's successor or heir, must prove his identity and rights.
Counsel for the municipality of Mambajao merely prayed for an order of
reversion and for the adjudication in behalf of the municipality of the property
aforementioned; he did not comply with the provisions of the law by furnishing
the required proofs in regard to the matters hereinabove indicated, which must
be the subject of an investigation.
For the reasons aforestated, it is proper, in our opinion, to reverse the judgment
appealed from, and we dismiss those proceedings, without prejudice to any
rights that may pertain to the parties with respect to the property in question. No
express finding is made of the costs.
Arellano, C.J., Johnson, Carson, Moreland and Trent, JJ., concur.
and that by virtue of a deed of adjudication and absolute sale executed on June
3, 1964, Cristina Esperas Vda. de Chow transferred all the interests and
participation of Tom Chow over Lot 776 to Bermudo.
Shortly thereafter or on December 8, 1964, TCT No. 1948 was issued to
2
Bermudo and Go Se Pieng as owners of Lot 776 in "equal shares undivided."
On January 23, 1965, the Chinese Nationalist party [hereinafter known as the
Party] filed a petition for relief from said order praying for its annulment and for
the issuance of an order cancelling TCT No. 1948. It alleged that the
reconstitution order was obtained through misrepresentation and fraud there
being no notice of hearing of the petition for reconstitution in spite of the fact that
Bermudo, who was residing adjacent to Lot 776, had personal knowledge that
said lot had been owned and possessed by the Party for more than thirty years
by virtue of TCT No. 858. It added that it came to know of the reconstitution
order only on January 5, 1965 when the occupants of said lot informed its
3
president that Bermudo had filed an ejectment case against them.
In his opposition to said petition, Bermudo averred that notice of the hearing of
his petition was duly published; that he did not know of any participation of the
Party in said land; that the latter had no legal capacity to sue; that under existing
laws, it could not own land; that the land allegedly titled in its name was not the
same parcel of land subject matter of the case and that the petition for relief was
4
pro farma and intended merely to delay the proceedings in the case.
In its decision of January 6, 1968, the lower court set aside its order to
reconstitute OCT No. 10256, annulled and cancelled TCT No. 1948 and
declared TCT No. 858 to be in fun force and effect.
Almost twenty-four years later or on June 23, 1964, Valentin Bermudo filed in
the Court of First Instance of Leyte, Branch I at Tacloban City, a petition for the
reconstitution of the records of OCT No. 10256. He alleged therein that he was
the "vendee to the extent of one-half [1/2] pro-indiviso" of Lot 776. Annexed to
the petition was a certification of the Register of Deeds of Leyte and Tacloban
City stating that the Book containing said OCT No. 10256 "was completely
destroyed," that a diligent and religious search thereof proved futile, and that,
"no owner's Duplicate Certificate of Title No. 10256 was ever issued in favor of
anybody." 1
The lower court found that Bermudo acted in bad faith in obtaining the
reconstitution of OCT No. 10256. It noted that being a resident of the property
adjacent to Lot 776, Bermudo could have known the possessor and owner of the
lot. It stated that, after the Party had presented the widow of Tom Chow,
Magdalena Esperas Vda. de Chow, Bermudo failed to rebut her testimony
through his own precedessor-in-interest, Cristina Esperas Vda. de Chow,
allegedly also a widow of Tom Chow. The lower court also ruled that OCT No.
10256 could no longer be reconstituted because it had been cancelled by TCT
No. 858 in the name of the Party.
As there was no opposition to said petition, the lower court, after the hearing,
issued an order dated November 23, 1964 allowing the reconstitution of the
records of OCT No. 10256. The lower court based its order on its findings that
per an authenticated copy of the aforesaid judicial decree of registration No.
494657, Tom Chow and Go Se Pieng were the owners in fee simple thereof,
After receiving a copy of said decision, Bermudo filed a notice of appeal to this
5
Court. As the original record of the case was transmitted to this Court, We
required Bermudo to file the proper petition for review on certiorari pursuant to
6
Republic Act No. 5440.
The petition, which was docketed as L-30730, "Valentin Bermudo vs. Chinese
Nationalist Party, et al.", was denied by the Court for non-compliance with the
Rule requiring a verified statement of material dates and proof of service of the
7
petition on the lawer court. Bermudo's motion for reconsideration of said denial
resolution was granted by the Court in the resolution of September 24, 1969 but,
it appearing that the petition involved mixed questions of law and fact, the Court
8
transmitted the petition to the Court of Appeals.
In its decision of December 11, 1972, the Court of Appeals * dismissed the
petition, ruling that Bermudo did not acquire a legal and valid title over Lot 776
from his predecessor-in-interest, Cristina E. Vda. de Chow, and hence, he is not
entitled to seek reconstitution of the title covering said land. It underscored the
fact that OCT No. 10256 was no longer in force when the reconstitution order
was issued because as early as September 4, 1940, said title had been
cancelled and in lieu thereof TCT No. 858 was issued in favor of the Party. It
also upheld the Party's capacity to sue on the ground that by virtue of the old
Civil Code, specifically Articles 1667 and 1356 thereof, it was possessed of
juridical personality.
Bermudo elevated said decision to this Court through another petition for review
on certiorari. Docketed as L-36156, "Valentin Bermudo vs. Court of Appeals, et
9
al., " said petition was denied for lack of merit on January 29, 1973. His motion
for the reconsideration of the denial resolution was likewise denied for lack of
merit. 10
Undaunted, Bermudo filed the instant petition for certiorari and prohibition. He
asserts that the Court of Appeals acted beyond its power and authority when it
affirmed the lower court's decision setting aside its order directing the
reconstitution of OCT No. 10256, after the said order had been executed and
enforced. 11
From the procedural standpoint, We agree with the petitioner that the Court of
Appeals acted beyond its authority in upholding the lower court's decision. When
the Party filed its petition for relief, the order of reconstitution had not only
become final and executory. Said order was already executed by the issuance
of the reconstituted OCT No. 10256 which resulted in the subsequent issuance
of TCT No. 1948 to Bermudo. As a petition for relief from judgment is proper
only when the court is still in control of the proceedings, 12 the lower court
should not have entertained the Party's petition because by that time, it was
already deprived of its jurisdiction over the case. Furthermore, the lower court
should have considered the fact that premised on equity, relief from judgment is
granted only in exceptional cases and, being an act of grace, it is not regarded
with favor. 13
For its part, in choosing a remedy for the allowance of the reconstitution of OCT
No. 10256 and the subsequent issuance of TCT No. 1948, the Party should
have considered the fact that it was, by its own admission, not served notice of
the judicial reconstitution proceeding. Rule 38 cannot be applied when the one
deprived of his right was never made a party to the case for lack of the requisite
notice. 14
Under the circumstances, the Party should have availed of the remedy provided
for in Republic Act No. 26 which states:
SEC. 19. ... Provided, however, That if the reconstituted
certificate of title has been cancelled by virtue of any deed or
instrument, whether voluntary or involuntary or by an order of
the court, and a new certificate of title has been issued, the
procedure prescribed above with respect to memoranda or new
liens or encumbrances made on the reconstituted certificate of
title, after its reconstitution, shag be followed with respect to the
new certificate of title, and to such new hens or encumbrances,
if any, as may have been made on the latter, after the issuance
thereof.
The procedure referred to in said provision with respect to memoranda of new
liens or encumbrances annotated on a reconstituted certificate of title, consists
of the filing of a petition with the proper Court of First Instance "for the
annotation of such right or interest on said reconstituted certificate of title and
the court, after notice and hearing, shall determine the merits of the petition and
render such judgment as justice and equity may require." 15
The Party's improper remedy notwithstanding, We are not prepared to uphold
Bermudo's claim to one-half interest over the undivided lot. Extant from the
records are proofs that Bermudo, as correctly found by both the lower court and
the Court of Appeals, acted in bad faith is seeking the reconstitution of OCT No.
10256.
Bermudo has not denied the fact that he was residing adjacent to Lot 776 when
he filed the petition for reconstitution of title and yet, he failed to give notices of
the hearing on the petition for reconstitution even to its actual occupants. Such
failure manifested an attempt to present any opposition to his petition, not
realizing that it would prove fatal to his case considering that notice and the
procedural requirements of Republic Act No. 26 are mandatory. 16 Thus, courts
must exercise utmost caution in entertaining petitions for reconstitution and
should make sure that the indispensable parties, i.e., the actual owners and
possessors of the lands involved, are duly served with actual and personal
notice of the petition, and not by mere general publication. 17
Moreover, it is possible that Bermudo could have bought an interest in Lot 776
from the wrong Mrs. Chow. He should not have relied on the testimony of Mrs.
Magdalena Esperas Vda. de Chow that she could not personally locate and
Identify Lot 776. He should have presented anew as witness his alleged
predecessor-in-interest, Mrs. Cristina Esperas Vda. de Chow to rebut
Magdalena's testimony and to prove the authenticity of Cristina's claim over the
property. In the light of these factual findings, Bermudo's right to a one-half
interest over Lot 776 is therefore unclear and doubtful.
On the other hand, the Party's claim over Lot 776 appears to be as nebulous as
Bermudo's. It allegedly acquired the lot from the Philippine Refining Company,
Inc. but two trustees [who, by their Chinese names might have been aliens]
obtained an original certificate of title over it. It is worth noting, however, that the
judicial decree of registration in favor of said trustees did not indicate that they
claimed their right over Lot 776 as such trustees even if they had renounced
their rights as such trustees before the issuance of both the judicial decree of
registration and the original certificate of title.
The fact that the Party acquired TCT No. 858 in 1940 when the 1935
Constitution was in full force and effect further beclouds its right to acquire title
over Lot 776. While at that time the Party might have acquired a juridical
personality if We are to go by the finding of the Court of Appeals, it is still
unclear whether it was also qualified to acquire or hold lands considering the
provision of the 1935 constitution limiting the acquisition of land only to
corporations or associations at least sixty per cent of the capital stock of which is
owned by Filipino citizens.18 Although the Party had no capital stocks as it was
allegedly a "civil association", it cannot escape said Constitutional mandate
because the purpose and spirit of the 1935 Constitution "demands that in the
absence of a capital stock, the controlling membership should be composed of
Filipino citizens." 19 Nowhere in the record does it show that the Party fulfills
said "sixty per centum" requirement.
But granting that the Party is qualified to hold or own private land, still, there is
the question of whether ownership of Lot 776 is indispensable to its activities as
a "civil association." A corporation's right to hold or own lands is further delimited
20
by the provision of the Corporation Law Section 13(5) of which states that no
corporation shall be "permitted to hold or own real estate except such as may be
reasonably necessary to enable it to carry out the purposes for which it is
created." Hence, it is still imperative for the Party to prove that ownership of Lot
776 was necessary when it acquired title over it in 1940, in order that it could
undertake its aims as a "civil association."
Worth noting is the fact that it was only on November 29, 1966, while its petition
for relief from judgment was pending resolution in the lower court, that the Party
reorganized itself, reincorporated under the new name Leyte Kuomintang
Cultural Association, Inc. and registered with the Securities and Exchange
Commission. We view such belated move as aimed at obtaining documentary
evidence of its juridical existence to supplement the testimonial proof of its
juridical personality which was questioned by Bermudo.
Furthermore, in his memorandum, Bermudo also alleged that aside from the fact
that the Party presented only a photograph of TCT No. 858 with a certification
from the office of the Register of Deeds that it was a true copy, the Register of
Deeds of Leyte found three transfer certificates of title bearing the same number
in the names of the Party, one Feliciano Labastida, and the Tacloban Electric
21
22
and Ice Plants Co., Inc. The Party failed to rebut said allegation.
The existence of three transfer certificates of title all numbered 858 in the same
locality is an anomaly that requires investigation and correction. That anomalous
situation, coupled with Our finding that it is very possible that both at the time of'
the Party's acquisition of Lot 776 and the issuance in its favor of TCT No. 858, it
was not qualified to hold and own private land under the 1935 Constitution and
pertinent laws, compel Us to consider the Party's ownership over Lot 776 as
questionable.
To remove all doubts over the Party's right over lot 776 and to settle the
question of who really should be entitled to register said lot in his name, We are
convinced that an escheat proceeding under Section 5, Rule 91 of the Rules of
Court must be initiated by the government. All interested parties, especialIy the
actual occupants and the adjacent lot owners including petitioner Bermudo shall
be personally notified of the proceeding and given the opportunity to prevent
their valid claims over Lot 776 otherwise it will be reverted to the State.
WHEREFORE, the petition for certiorari and prohibition is herein dismissed. The
Solicitor General or his representative is hereby directed to immediately file an
escheat proceeding pursuant to Section 5, Rule 91 of the Rules of Court in the
proper Regional Trial Court which shall give priority to the case and decide it at
the earliest possible time.
SO ORDERED.
Gutierrez, Jr., Feliciano, Bidin and Cortes, JJ., concur.
DECISION
MORAN, J.:
SYLLABUS
1. ESCHEAT; IMPLIED WAIVER OF RIGHT. The right to escheat claimed by
the municipality has existed long prior to the registration proceedings instituted
by the Roman Catholic Archbishop of Manila, and, as the same has not been
asserted in said proceedings, it is deemed to have been completely waived.
2. ID.; REGISTRATION OF LAND; EFFECT OF CERTIFICATE OF TITLE.
Under the Torrens system of registration, claims and liens of whatever
character, except those mentioned by law, existing against the land prior to the
issuance of the certificate of title, are cut or by such certificate if not noted
thereon, and the certificate 80 issued binds the whole world including the
Government (secs. 38, 39 and 47, Act No. 496; Aldecoa & Co. v. Warner,
Barnes & Co., 30 Phil., 163, 209; Snyder v. Provincial Fiscal of Cebu and Avila,
42 Phil., 761, 765).
3. ID.; ID.; ID.; PROPER REMEDY. Appellant seems to contend that as the
property over which the Roman Catholic Archbishop of Manila has acquired a
certificate of title has never been really transferred to him by A. M. de A., an
implied trust has been created which may be enforced against him in favor of
the successors in interest of said A. M. de A. This contention is completely
untenable; and, even assuming it to be right, the appropriate remedy is not a
petition in the land registration proceedings but a separate action. This rule is
especially applicable where, as in the instant case, there are third persons
affected. It is argued that the transfers made to these entities are null and void.
Be that as it may, the nullity of such transfers cannot be determined by a motion
in the registration proceedings but in a separate action.
Twenty-four years after the issuance of the original certificate of title in favor of
the Roman Catholic Archbishop of Manila, the municipality of Paraaque, Rizal,
filed in the registration proceedings with the Court of First Instance of Rizal a
petition seeking, under sections 110 and 112 of Act No. 496 and sections 750
and 751 of the Code of Civil Procedure, a declaration of escheat in its favor on
the property in question. The court ordered the parties concerned to show cause
why the petition should not be granted, and "El Monte de Piedad y Caja de
Ahorros de Manila," the "Padres Redentoristas," the Asiatic Petroleum Co. (P. I.)
, Ltd., and the Roman Catholic Archbishop of Manila filed their respective
oppositions to the petition. After hearing, the court, in an order dated November
28, 1936, denied the petition on the ground that the same could not be
entertained in the registration proceedings. From this order the municipality
appealed.
The municipality holds the view that the property had not been really donated by
Doa Ana Maria de Araujo to the Roman Catholic Archbishop of Manila but that
she merely constituted, on November 13, 1677, a chaplaincy allotting one
hundred pesos (P100) yearly for masses to be said for the repose of her and her
parents soul; that this amount should be taken from the rents of the property in
question and given to Bachiller Felipe de los Reyes who, after being ordained as
priest and later as a chaplain, may say the masses above mentioned; and that
as the chaplain died without heirs, the property should escheat in favor of the
municipality.
It should be noted that Doa Ana Maria de Araujo and the chaplain Felipe de los
Reyes died more than two hundred fifty (250) and one hundred fifty (150) years
ago, respectively. The right then to escheat claimed by the municipality has
10
11
12
are no longer part of the estate of the deceased Hankins at the time of
her death; and, whether or not the alleged donations are valid are
issues in the present petition for annulment which can be resolved only
after a full blown trial x x x x
It is for the same reason that respondents espousal of the statute of
limitations against herein petition for annulment cannot prosper at this
stage of the proceedings. Indeed, Section 4, Rule 91 of the Revised
Rules of Court expressly provides that a person entitled to the estate
must file his claim with the court a quo within five (5) years from the date
of said judgment. However, it is clear to this Court that herein petitioner
is not claiming anything from the estate of the deceased at the time of
her death on September 20, 1985; rather she is claiming that the subject
parcels of land should not have been included as part of the estate of
the said decedent as she is the owner thereof by virtue of the deeds of
donation in her favor.
In effect, herein petitioner, who alleges to be in possession of the
premises in question, is claiming ownership of the properties in question
and the consequent reconveyance thereof in her favor which cause of
action prescribes ten (10) years after the issuance of title in favor of
respondent Pasay City on August 7, 1990. Herein petition was
seasonably filed on February 3, 1997 under Article 1144, to wit:
Art. 1144. The following actions must be brought within ten
years from the time the right of action accrues: (1) Upon a
written contract; (2) Upon an obligation created by law; (3) Upon
a judgment.
And Article 1456, to wit:
Art. 1456. 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
4
property comes.
In its Resolution of 4 May 2000 the Court of Appeals denied the motion for
reconsideration filed by public respondents Register of Deeds of Pasay City and
the Presiding judge of the lower court and set the trial on the merits for June 15
and 16, 2000.
In its effort to nullify the Resolutions herein before mentioned, petitioner points
out that the Court of Appeals committed grave abuse of discretion amounting to
lack or excess of jurisdiction (a) in denying petitioner's affirmative defenses set
forth in its answer and motion for reconsideration, and in setting the case for trial
and reception of evidence; and, (b) in giving due course to private respondent's
petition for annulment of decision despite the palpable setting-in of the 5-year
statute of limitations within which to file claims before the court a quo set forth in
Rule 91 of the Revised Rules of Court and Art. 1014 of the Civil Code.
Petitioner argues that the lower court had jurisdiction when it escheated the
properties in question in favor of the city government and the filing of a petition
for annulment of judgment on the ground of subsequent discovery of the deeds
of donation did not divest the lower court of its jurisdiction on the matter. It
further contends that Rule 47 of the 1997 Rules of Civil Procedure only provides
for two (2) grounds for the annulment of judgment, namely: extrinsic fraud and
lack of jurisdiction. As such the discovery of the deeds of donation seven (7)
years after the finality of the escheat proceedings is an extraneous matter which
is clearly not an instance of extrinsic fraud nor a ground to oust the lower court
of its jurisdiction.
Petitioner also insists that notwithstanding the execution of the deeds of
donation in favor of private respondent, the 5-year statute of limitations within
which to file claims before the court a quo as set forth in Rule 91 of the Revised
Rules of Court has set in.
The present controversy revolves around the nature of the parcels of land
purportedly donated to private respondent which will ultimately determine
whether the lower court had jurisdiction to declare the same escheated in favor
of the state.
We rule for the petitioner. Escheat is a proceeding, unlike that of succession or
assignment, whereby the state, by virtue of its sovereignty, steps in and claims
the real or personal property of a person who dies intestate leaving no heir. In
the absence of a lawful owner, a property is claimed by the state to forestall an
5
open "invitation to self-service by the first comers." Since escheat is one of the
incidents of sovereignty, the state may, and usually does, prescribe the
conditions and limits the time within which a claim to such property may be
made. The procedure by which the escheated property may be recovered is
generally prescribed by statue, and a time limit is imposed within which such
action must be brought.
In this jurisdiction, a claimant to an escheated property must file his claim "within
five (5) years from the date of such judgment, such person shall have
possession of and title to the same, or if sold, the municipality or city shall be
accountable to him for the proceeds, after deducting the estate; but a claim not
6
made shall be barred forever." The 5-year period is not a device capriciously
conjured by the state to defraud any claimant; on the contrary, it is decidedly
13
JJ.,
concur.
14