December 2009 Philippine Supreme Court Decisions on Civil Law

Here are selected December 2009 rulings of the Supreme Court of the Philippines on civil law and related laws:

Agency; agency by estoppel. An agency by estoppel, which is similar to the doctrine of apparent authority requires proof of reliance upon the representations, and that, in turn, needs proof that the representations predated the action taken in reliance.

There can be no apparent authority of an agent without acts or conduct on the part of the principal and such acts or conduct of the principal must have been known and relied upon in good faith and as a result of the exercise of reasonable prudence by a third person as claimant, and such must have produced a change of position to its detriment. Such proof is lacking in this case.  Yun Kwan Byung vs. Philippine Amusement Gaming Corporation, G.R. No. 163553, December 11, 2009.

Agency; implied agency. Article 1869 of the Civil Code states that implied agency is derived from the acts of the principal, from his silence or lack of action, or his failure to repudiate the agency, knowing that another person is acting on his behalf without authority. Implied agency, being an actual agency, is a fact to be proved by deductions or inferences from other facts.

On the other hand, apparent authority is based on estoppel and can arise from two instances. First, the principal may knowingly permit the agent to hold himself out as having such authority, and the principal becomes estopped to claim that the agent does not have such authority. Second, the principal may clothe the agent with the indicia of authority as to lead a reasonably prudent person to believe that the agent actually has such authority. In an agency by estoppel, there is no agency at all, but the one assuming to act as agent has apparent or ostensible, although not real, authority to represent another.

The law makes no presumption of agency and proving its existence, nature and extent is incumbent upon the person alleging it. Whether or not an agency has been created is a question to be determined by the fact that one represents and is acting for another. Yun Kwan Byung vs. Philippine Amusement Gaming Corporation, G.R. No. 163553, December 11, 2009.

Agency;  implied agency. The basis for agency is representation, that is, the agent acts for and on behalf of the principal on matters within the scope of his authority and said acts have the same legal effect as if they were personally executed by the principal. On the part of the principal, there must be an actual intention to appoint or an intention naturally inferable from his words or actions, while on the part of the agent, there must be an intention to accept the appointment and act on it. Absent such mutual intent, there is generally no agency.

There is no implied agency in this case because PAGCOR did not hold out to the public as the principal of ABS Corporation. PAGCOR’s actions did not mislead the public into believing that an agency can be implied from the arrangement with the junket operators, nor did it hold out ABS Corporation with any apparent authority to represent it in any capacity. The Junket Agreement was merely a contract of lease of facilities and services.  Yun Kwan Byung vs. Philippine Amusement Gaming Corporation, G.R. No. 163553, December 11, 2009.

Contract;  binding effect. A consignee, although not a signatory to the contract of carriage between the shipper and the carrier, becomes a party to the contract by reason of either (1) the relationship of agency between the consignee and the shipper/ consignor; (2) the unequivocal acceptance of the bill of lading delivered to the consignee, with full knowledge of its contents or (3) availment of the stipulation pour autrui, i.e., when the consignee, a third person, demands before the carrier the fulfillment of the stipulation made by the consignor/shipper in the consignee’s favor, specifically the delivery of the goods/cargoes shipped. MoF Company, Inc. vs. Shin Brokerage Corporation, G.R. No. 172822, December 18, 2009.

Contract;  interpretation. A compromise is a contract whereby the parties, by making reciprocal concessions, avoid a litigation or put an end to one already commenced. It is an agreement intended to terminate a pending suit by making reciprocal concessions.

In the construction or interpretation of a compromise agreement, the Court is guided by the fundamental and cardinal rule that the intention of the parties is to be ascertained from the contract and effect should be given to that intention. Likewise, it must be construed so as to give effect to all the provisions of the contract. In essence, the contract must be read as a whole. Adriatico Consortium, Inc. Primary Realty Corp., and Benito Cu-Uy-Gam vs. Land Bank of the Philippines, G.R. No. 187838, December 23, 2009.

Contract; novation. Novation is the extinguishment of an obligation by the substitution or change of the obligation by a subsequent one which extinguishes or modifies the first, either by changing the object or principal conditions, or by substituting another in place of the debtor, or by subrogating a third person in the rights of the creditor.

Novation may be extinctive or modificatory. It is extinctive when an old obligation is terminated by the creation of a new one that takes the place of the former; it is merely modificatory when the old obligation subsists to the extent that it remains compatible with the amendatory agreement.

Novation may either be express, when the new obligation declares in unequivocal terms that the old obligation is extinguished; or implied, when the new obligation is on every point incompatible with the old one. The test of incompatibility is whether the two obligations can stand together, each one with its own independent existence.

In the instant case, the Court finds that the Partial Compromise Agreement entered into by petitioners and Land Bank constitutes as an implied modificatory novation or amendment to the Loan/Line Agreement. As such, any provision in the Loan/Line Agreement inconsistent with the provisions of the Partial Compromise Agreement is deemed amended or waived by the parties.

In other words, by entering into the Partial Compromise Agreement and agreeing to “suspend all actions,” Land Bank effectively waived all its rights regarding MPC Nos. 0002 and 0004. This necessarily includes its right to assign under the Loan/Line Agreement. Adriatico Consortium, Inc. Primary Realty Corp., and Benito Cu-Uy-Gam vs. Land Bank of the Philippines, G.R. No. 187838, December 23, 2009.

Contract; rescission. The remedy of “rescission” is not confined to the rescissible contracts enumerated under Article 1381. Article 1191 of the Civil Code gives the injured party in reciprocal obligations, such as what contracts are about, the option to choose between fulfillment and “rescission.”  Arturo M. Tolentino, a well-known authority in civil law, is quick to note, however, that the equivalent of Article 1191 in the old code actually uses the term “resolution” rather than the present “rescission.” The calibrated meanings of these terms are distinct.

“Rescission” is a subsidiary action based on injury to the plaintiff’s economic interests as described in Articles 1380 and 1381. “Resolution,” the action referred to in Article 1191, on the other hand, is based on the defendant’s breach of faith, a violation of the reciprocity between the parties.  As an action based on the binding force of a written contract, therefore, rescission (resolution) under Article 1191 prescribes in 10 years.  Ten years is the period of prescription of actions based on a written contract under Article 1144.

The distinction makes sense.  Article 1191 gives the injured party an option to choose between, first, fulfillment of the contract and, second, its rescission.  An action to enforce a written contract (fulfillment) is definitely an “action upon a written contract,” which prescribes in 10 years (Article 1144).  It will not be logical to make the remedy of fulfillment prescribe in 10 years while the alternative remedy of rescission (or resolution) is made to prescribe after only four years as provided in Article 1389 when the injury from which the two kinds of actions derive is the same.  Heirs of Sofia Quirong, etc. vs. Development Bank of the Philippines, G.R. No. 173441, December 3, 2009.

Contract;  void contract. A contract is void if one of the essential requisites of contracts under Article 1318 of the New Civil Code is lacking.

All these elements must be present to constitute a valid contract. Consent is essential to the existence of a contract; and where it is wanting, the contract is non-existent. In a contract of sale, its perfection is consummated at the moment there is a meeting of the minds upon the thing that is the object of the contract and upon the price. Consent is manifested by the meeting of the offer and the acceptance of the thing and the cause, which are to constitute the contract. To enter into a valid contract of sale, the parties must have the capacity to do so. Every person is presumed to be capacitated to enter into a contract until satisfactory proof to the contrary is presented. The burden of proof is on the individual asserting a lack of capacity to contract, and this burden has been characterized as requiring for its satisfaction clear and convincing evidence.

While a corporation is a juridical person, it cannot act except through its board of directors as a collective body, which is vested with the power and responsibility to decide whether the corporation should enter into a contract that will bind the corporation, subject to the articles of incorporation, by-laws, or relevant provisions of law. This grant to the board of all corporate powers is explicit under Section 23 of the Corporation Code, stating: “All corporate powers shall be exercised, and all corporate business shall be conducted by the board of directors.”

In the case under consideration, the dispute centers on the element of consent, which FPHC claimed to be lacking since the supposed board of directors that composed the FPHC was allegedly a “dummy board” of Benjamin Romualdez, the members of which were allegedly installed after the management and control of FPHC were supposedly fraudulently wrested from its true owners. The Sandiganbayan, however, differed. It stood pat in its ruling that the consent by the board of directors, who had the legal capacity to enter into said contract with a third person, was duly obtained. This Court finds no reason to diverge from the disquisition of the anti-graft court on this matter.  First Philippine Holding Corporation vs. Trans Middle East (Phils.) Equities Inc.,  G.R. No. 179505. December 4, 2009.

Contract;  void contract;  prescription.  The sale of subject properties to petitioners are null and void. Under Article 1410 of the Civil Code, an action or defense for the declaration of the inexistence of a contract is imprescriptible. Hence, petitioners’ contention that respondents’ cause of action is already barred by prescription is without legal basis.  Jesus Campos and Rosemarie Campos-Bautista vs. Nenita Buevinida Pastrana, et al., G.R. No. 175994, December 8, 2009.

Contract; void contract; rescission. Petitioners’ argument that the applicable law in this case is Article 1381(3) of the Civil Code on rescissible contracts and not Article 1409 on void contracts is not a question of first impression. This issue had already been settled several decades ago when we held that “an action to rescind is founded upon and presupposes the existence of a contract”. A contract which is null and void is no contract at all and hence could not be the subject of rescission.

In the instant case, the Deeds of Absolute Sale are fictitious and inexistent for being absolutely simulated contracts. It is true that the CA cited instances that may constitute badges of fraud under Article 1387 of the Civil Code on rescissible contracts. But there is nothing else in the appealed decision to indicate that rescission was contemplated under the said provision of the Civil Code. The aforementioned badges must have been considered merely as grounds for holding that the sale is fictitious. Consequently, we find that the CA properly applied the governing law over the matter under consideration which is Article 1409 of the Civil Code on void or inexistent contracts.  Jesus Campos and Rosemarie Campos-Bautista vs. Nenita Buevinida Pastrana, et al., G.R. No. 175994, December 8, 2009.

Contract;  void contract; gambling. Gambling is prohibited by the laws of the Philippines as specifically provided in Articles 195 to 199 of the Revised Penal Code, as amended. Gambling is an act beyond the pale of good morals, and is thus prohibited and punished to repress an evil that undermines the social, moral, and economic growth of the nation. Presidential Decree No. 1602 (PD 1602), which modified Articles 195-199 of the Revised Penal Code and repealed inconsistent provisions, prescribed stiffer penalties on illegal gambling.

As a rule, all forms of gambling are illegal. The only form of gambling allowed by law is that stipulated under Presidential Decree No. 1869, which gave PAGCOR its franchise to maintain and operate gambling casinos. The issue then turns on whether PAGCOR can validly share its franchise with junket operators to operate gambling casinos in the country.

The Junket Agreement would be valid if under Section 3(h) of PAGCOR’s charter, PAGCOR could share its gambling franchise with another entity. In this case, PAGCOR, by taking only a percentage of the earnings of ABS Corporation from its foreign currency collection, allowed ABS Corporation to operate gaming tables in the dollar pit. The Junket Agreement is in direct violation of PAGCOR’s charter and is therefore void.

Since the Junket Agreement violates PAGCOR’s charter, gambling between the junket player and the junket operator under such agreement is illegal and may not be enforced by the courts. Article 2014 of the Civil Code, which refers to illegal gambling, states that no action can be maintained by the winner for the collection of what he has won in a game of chance.  Yun Kwan Byung vs. Philippine Amusement Gaming Corporation, G.R. No. 163553, December 11, 2009.

Contract; voidable.  Contracts where consent is given through fraud, are voidable or annullable.  These are not void ab initio since voidable or anullable contracts are existent, valid, and binding, although they can be annulled because of want of capacity or the vitiated consent of one of the parties.  However, before such annulment, they are considered effective and obligatory between parties.
As the complaint-in-intervention substantially alleged that the contract was voidable, the four-year prescriptive period under Art. 1391 of the New Civil Code will apply.

FPHC, however, contends that the four-year prescriptive period should be reckoned from 24 February 1986, the date when former President Marcos left the country, as it was only then that the threat and intimidation against the Lopezes ceased.

This argument is unconvincing. Based on FPHC’s Petition for Review and its Complaint-in-Intervention, the ground relied upon by petitioner is fraud. Here, from the time the questioned sale transaction on 24 May 1984 took place, FPHC did not deny that it had actual knowledge of the same. Simply, petitioner was fully aware of the sale of the PCIB shares to TMEE. Despite all this knowledge, petitioner did not question the said sale from its inception and some time thereafter. It was only after four years and seven months had lapsed following the knowledge or discovery of the alleged fraudulent sale that petitioner assailed the same. By then, it was too late for petitioner to beset the same transaction, since the prescriptive period had already come into play.  First Philippine Holding Corporation  vs. Trans Middle East (Phils.) Equities Inc.,  G.R. No. 179505. December 4, 2009.

Damages;  exemplary damages.  Petitioner argues that assuming arguendo that compensatory damages had been awarded, the same contravened Article 2232 of the Civil Code which provides that in contracts or quasi-contracts, the court may award exemplary damages only if the defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner. Since, so petitioner concludes, there was no finding that it acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner, it is not liable for exemplary damages.

The argument fails. To reiterate, petitioner’s liability is based not on contract or quasi-contract but on quasi-delict since there is no pre-existing contractual relation between the parties. Article 2231 of the Civil Code, which provides that in quasi-delict, exemplary damages may be granted if the defendant acted with gross negligence, thus applies. For “gross negligence” implies a want or absence of or failure to exercise even slight care or diligence, or the entire absence of care, evincing a thoughtless disregard of consequences without exerting any effort to avoid them.  Metropolitan Bank and Trust Company, etc. vs. BA Finance Corporation and Malayan Insurance Co, Inc.,  G.R. No. 179952, December 4, 2009.

Laws; retroactive application. A perusal of RA 9302 shows that nothing indeed therein authorizes its retroactive application. In fact, its effectivity clause indicates a clear legislative intent to the contrary: “Section 28. Effectivity Clause. – This Act shall take effect fifteen (15) days following the completion of its publication in the Official Gazette or in two (2) newspapers of general circulation.”

Statutes are prospective and not retroactive in their operation, they being the formulation of rules for the future, not the past. Hence, the legal maxim lex de futuro, judex de praeterito — the law provides for the future, the judge for the past, which is articulated in Article 4 of the Civil Code: “Laws shall have no retroactive effect, unless the contrary is provided.” The reason for the rule is the tendency of retroactive legislation to be unjust and oppressive on account of its liability to unsettle vested rights or disturb the legal effect of prior transactions.  In Re: Petition for Assistance in the Liquidation of Intercity Savings and Loan Bank, Inc., Philippine Deposit Insurance Corporation vs. Stockholders of Intercity Savings and Loan Bank, Inc., G.R. No. 181556, December 14, 2009.

Marriage;  disposition of conjugal property. The husband’s first act of disposition of the subject property occurred in 1963 when he executed the SPA and the Deed of Transfer of Rights in favor of Dolores Camisura. Thus, the right of action of the petitioners accrued in 1963, as Article 173 of the Civil Code provides that the wife may file for annulment of a contract entered into by the husband without her consent within ten (10) years from the transaction questioned. Petitioners filed the action for reconveyance in 1995. Even if we were to consider that their right of action arose when they learned of the cancellation of TCT No. 107534 and the issuance of TCT No. 290121 in Melanie Mingoa’s name in 1993, still, twelve (12) years have lapsed since such discovery, and they filed the petition beyond the period allowed by law. Moreover, when Sergia Hernandez, together with her children, filed the action for reconveyance, the conjugal partnership of property with Hernandez, Sr. had already been terminated by virtue of the latter’s death on April 16, 1983. Clearly, therefore, petitioners’ action has prescribed.

The failure of Sergia Hernandez to file with the courts an action for annulment of the contract during the marriage and within ten (10) years from the transaction necessarily barred her from questioning the sale of the subject property to third persons.  Heirs of Domingo Hernandez Sr., et al. vs. Plaridel Mingoa, Sr., et al., G.R. No. 146548, December 18, 2009.

Mortgage; foreclosure. Foreclosure is valid where the debtor is in default in the payment of an obligation. The essence of a contract of mortgage indebtedness is that a property has been identified or set apart from the mass of the property of the debtor-mortgagor as security for the payment of money or the fulfillment of an obligation to answer the amount of indebtedness, in case of default in payment. Foreclosure is but a necessary consequence of non-payment of the mortgage indebtedness. In a real estate mortgage when the principal obligation is not paid when due, the mortgagee has the right to foreclose the mortgage and to have the property seized and sold with the view of applying the proceeds to the payment of the obligation.

On the face of respondents’ clear admission that they were unable to settle their obligations which were secured by the mortgages, EPCIB has a clear right to foreclose the mortgages. Equitable PCI Bank, Inc. vs. Maria Letecia Fernandez, et al., G.R. No. 163117, December 18, 2009.

Obligations;  corporations. A corporation is vested by law with a personality separate and distinct from the people comprising it. Ownership by a single or small group of stockholders of nearly all of the capital stock of the corporation is not by itself a sufficient ground to disregard the separate corporate personality. Thus, obligations incurred by corporate officers, acting as corporate agents, are direct accountabilities of the corporation they represent.

In this case, none of these exceptional circumstances is present. In its decision, the trial court failed to provide a clear ground why Eugene Lim was held solidarily liable with Shrimp Specialists. The trial court merely stated that Eugene Lim signed on behalf of the Shrimp Specialists as President without explaining the need to disregard the separate corporate personality. The CA correctly ruled that the evidence to hold Eugene Lim solidarily liable should be more than just signing on behalf of the corporation because artificial entities can only act through natural persons.  Thus, the CA was correct in dismissing the case against Eugene Lim.  Shrimp Specialist, Inc. vs. Fuji-Triumph Agri-Industrial Corporation/Fuji-Trimph Agri-Industrial Corporation vs. Shrimp Specialist, Inc. et al.,  G.R. No. 168756/G.R. No. 171476, December 7, 2009.

Obligations;  interest.    Not being a loan or forbearance of money, the interest should be 6% per annum computed from the date of extrajudicial demand on September 25, 1992 until finality of judgment; and 12% per annum from finality of judgment until payment, conformably with Eastern Shipping Lines, Inc. v. Court of Appeals.  Metropolitan Bank and Trust Company, etc. vs. BA Finance Corporation and Malayan Insurance Co, Inc.,  G.R. No. 179952, December 4, 2009.

Obligations;  laches.   Petitioners cannot find refuge in the principle of laches. It is not just the lapse of time or delay that constitutes laches. The essence of laches is the failure or neglect, for an unreasonable and unexplained length of time, to do that which, through due diligence, could or should have been done earlier, thus giving rise to a presumption that the party entitled to assert it had earlier abandoned or declined to assert it.
The essential elements of laches are: (a) conduct on the part of the defendant, or of one under whom he claims, giving rise to the situation complained of; (b) delay in asserting complainant’s rights after he had knowledge of defendant’s acts and after he has had the opportunity to sue; (c) lack of knowledge or notice by defendant that the complainant will assert the right on which he bases his suit and (d) injury or prejudice to the defendant in the event the relief is accorded to the complainant.

In the instant case, the second and third elements are missing.  Arsenio F. Olegario, et al. vs. Pedro C. Mari, represented by Lilia C. Mari-Camba, G.R. No. 147951, December 14, 2009.

Property;  possession. Respondent’s predecessor, Juan Mari, had declared the disputed realty for tax purposes as early as 1916. The tax declarations show that he had a two storey house on the realty. He also planted fruit bearing trees and bamboos thereon. The records also show that the 897-square meter property had a bamboo fence along its perimeter. All these circumstances clearly show that Juan Mari was in possession of subject realty in the concept of owner, publicly and peacefully since 1916 or long before petitioners entered the disputed realty sometime in 1965.

Based on Article 538 of the Civil Code, the respondent is the preferred possessor because, benefiting from his father’s tax declaration of the subject realty since 1916, he has been in possession thereof for a longer period. On the other hand, petitioners acquired joint possession only sometime in 1965. Arsenio F. Olegario, et al. vs. Pedro C. Mari, represented by Lilia C. Mari-Camba, G.R. No. 147951, December 14, 2009.

Sale;  contract to sell.  A distinction between a contract to sell and a contract of sale is helpful in order to determine the true intention of the parties. In a contract of sale, the title to the property passes to the vendee upon the delivery of the thing sold; while in a contract to sell, ownership is, by agreement, reserved for the vendor and is not to pass to the vendee until full payment of the purchase price. In a contract of sale, non-payment of the price is a negative resolutory condition. In a contract to sell, full payment is a positive suspensive condition. In a contract of sale, the vendor loses and cannot recover ownership of the thing sold until and unless the contract of sale is itself resolved and set aside. In a contract to sell, the title remains with the vendor if the vendee does not comply with the condition precedent of making payment at the time specified in the contract. In a contract to sell, the payment of the purchase price is a positive suspensive condition, the failure of which is not a breach, casual or serious, but a situation which prevents the obligation of the vendor to convey title from acquiring an obligatory force.

In the instant case, ownership of the general purpose polystyrene products was retained by SMP, Incorporated (SMP) until after the checks given as payment by Clothespak Manufacturing Philippines (Clothespak) cleared. This was evidenced by a provisional receipt issued by SMP to Clothespak. The agreement between SMP and Clothespak involved a contract to sell defined under Article 1478 of the Civil Code.

On the other hand, the stipulation that the loss or destruction of the products during transit is on the account of Clothespak, as buyer of the products, is of no moment. This does not alter the nature of the contract as a contract to sell. The free on board stipulation on the contract can coexist with the contract to sell. Otherwise stated, the provisions or stipulations in the contract — for the reservation of the ownership of a thing until full payment of the purchase price and for the loss or destruction of the thing would be on account of the buyer — are valid and can exist in conjunction with the other. Bank of the Philippine Islands as successor-in-interest of Far East Bank and Trust Company vs. SMP, Inc., G.R. No. 175466, December 23, 2009.

Special laws

Innocent purchaser for value;   financial institutions. While we agree with petitioners that GSIS, as a financial institution, is bound to exercise more than just ordinary diligence in the conduct of its financial dealings, we nevertheless find no law or jurisprudence supporting petitioners’ claim that financial institutions are not protected when they are innocent purchasers for value. When financial institutions exercise extraordinary diligence in determining the validity of the certificates of title to properties being sold or mortgaged to them and still fail to find any defect or encumbrance upon the subject properties after said inquiry, such financial institutions should be protected like any other innocent purchaser for value if they paid a full and fair price at the time of the purchase or before having notice of some other person’s claim on or interest in the property.  Alejandro B. Ty and International Realty Corporation vs. Queen’s Row Subdivision, Inc., et al., G.R. No. 173158, December 4, 2009.

Land registration;  possession. In Director, Land Management Bureau v. Court of Appeals, we explained that – “x x x The phrase “adverse, continuous, open, public, peaceful and in concept of owner,” by which characteristics private respondent describes his possession and that of his parents, are mere conclusions of law requiring evidentiary support and substantiation. The burden of proof is on the private respondent, as applicant, to prove by clear, positive and convincing evidence that the alleged possession of his parents was of the nature and duration required by law. His bare allegations without more, do not amount to preponderant evidence that would shift the burden of proof to the oppositor.”

Here, we find that petitioner’s possession of the lot has not been of the character and length of time required by law Josephine Wee vs. Republic of the Philippines, G.R. No. 177384, December 8, 2009.

Registered land;  buyer in good faith. While every person dealing with registered land can safely rely on the correctness of the certificate of title issued therefor and the law will in no way oblige him to go beyond the certificate to determine the condition of the property, one will not be permitted to benefit from this general rule if there exist important facts which create suspicion to call for an investigation of the real condition of the land. One who deliberately ignores a significant fact which would naturally generate wariness is not an innocent purchaser for value. Vicente N. Luna, Jr.  vs. Nario Cabales, Oscar Pabalan, et al., G.R. No. 173533, December 14, 2009.

Registered land;  non-owner.  The registration of a property in one’s name, whether by mistake or fraud, the real owner being another, impresses upon the title so acquired the character of a constructive trust for the real owner. The person in whose name the land is registered holds it as a mere trustee, and the real owner is entitled to file an action for reconveyance of the property. The Torrens system does not protect a usurper from the true owner.  Vicente N. Luna, Jr. vs. Nario Cabales, Oscar Pabalan, et al., G.R. No. 173533, December 14, 2009.

Registered owner;  laches. This Court has, on several occasions, already ruled that even a registered owner of a property may be barred from recovering possession of the same by virtue of laches. Laches is the failure or neglect, for an unreasonable and unexplained length of time, to do that which by exerting due diligence could or should have been done earlier. The law serves those who are vigilant and diligent, and not those who sleep when the law requires them to act.  Alejandro B. Ty and International Realty Corporation vs. Queen’s Row Subdivision, Inc., et al., G.R. No. 173158, December 4, 2009.

Torrens title;  registration by non-owner.  The fact that petitioners were able to secure titles in their names did not operate to vest upon them ownership over the subject properties. That act has never been recognized as a mode of acquiring ownership. The Torrens system does not create or vest title. It only confirms and records title already existing and vested. It does not protect a usurper from the tr