SEVENTEENTH DIVISION
[CA-G.R. CV No. 45580. July 18, 2000.]
FRANCISCO BAÑEZ, etc., plaintiff-appellant, vs. BENJAMIN PONGOS, defendant-appellee.
D E C I S I O N
VELASCO, JR., J p:
Assailed in this appeal is the decision of the Regional Trial Court of Ormoc City, Branch 12 in Civil Case No. 2919-0 entitled "Francisco Bañez, in representation of the heirs of Felix Bañez vs. Benjamin Pongos" for recovery of ownership and possession of real property covered by a homestead patent.
Litigating as pauper, plaintiff in his verified complaint dated February 6, 1990 alleged he is one of the three legitimate children and heirs of the deceased Rosalio Bañez who was in turn the only compulsory heir of Felix Bañez who died intestate sometime in 1947; that during the lifetime of Felix Bañez, he was the owner of a parcel of land located in Brgy. Lonoy, Kananga, Leyte, classified as Lot No. 10959 containing an area of 153,542 square meters covered by OCT No. 1477; that Rosalio Bañez inherited the said parcel of land from Felix Bañez; that plaintiff, together with his sisters and the surviving spouse of Rosalio Bañez, now own the parcel of land being the heirs of Rosalio Bañez; that sometime in 1954, defendant entered into and took possession of the land; and that defendant's illegal possession of the land deprived the plaintiff of the earnings from the land. Plaintiff asked the trial court to render judgment declaring him and his co-heirs the lawful owners of the parcel of land and order the defendant to vacate from its premises and surrender the same to the plaintiff and to award him attorney's fees because he was constrained to engage the services of counsel to assert his right and reimburse him for the cost of litigation. 1
Defendant filed a motion to dismiss the complaint on the ground of prescription, laches, res judicata and lack of cause of action 2 which was denied by the trial court in an order dated June 13, 1990. 3
Forthwith, defendant filed his Answer with counterclaim. In his Answer, defendant denied the material allegations of the complaint and stated that he bought the land in question covered by OCT No. P-247 from the spouses Teofilo Regner and Generosa Laplana on September 18, 1962, as approved by the Secretary of Agriculture and Natural Resources and on October 2, 1962, OCT No. P-247 was cancelled and TCT No. T-618 was issued in his name. Defendant further alleged that the spouses Teofilo Regner and Generosa Laplana acquired Lot No. 10959 from Francisco Festin who in turn acquired the same lot from Felix Bañez on January 15, 1946. Defendant averred that, as such, Felix Bañez' ownership of the land ended on January 15, 1946 when he sold the land to Francisco Festin and accordingly, the plaintiff can not now claim any right to the land. As affirmative defenses, defendant alleged that he is a purchaser of the land in good faith and for value; that the decision of the Regional Trial Court of Tacloban City, Branch 4 has settled the issue of ownership over the land when the court, on July 14, 1973, directed the Register of Deeds of Leyte to note on OCT No. 1477 that it is covered by TCT No. T-618 in the name of the defendant; that from September 18, 1962, he has been the absolute owner of the land, and in the continuous, actual and adverse possession of the land in the concept of the owner; that plaintiff's right to file the complaint has already prescribed due to inaction for a period of more than 44 years from the time Felix Bañez sold the land to Francisco Festin and 27 years from the time the defendant bought the same from the spouses Teofilo Regner and Generosa Laplana; and that plaintiff is guilty of laches by his own silence, delay or inaction for a long period of time.
By way of counterclaim, defendant alleged that the complaint was filed merely to harass him and for which plaintiff should be held liable for moral damages, compensatory damages, as well as attorney's fees and cost of suit. 4
Culled from the mass of evidence on record, the facts are:
On November 9, 1938, Felix Bañez was granted a homestead patent and for which OCT No. 1477 5 was issued in his name. On January 15, 1946, Felix Bañez sold a parcel of agricultural land with an area of 24 hectares located in Barrio Lonoy, Municipality of Ormoc to Francisco Festin evidenced by an Absolute Deed of Sale. 6 Francisco Festin in turn sold the parcel of land with an area of 15.3545 hectares located at Barrio Lonoy, Ormoc City to Teofilo Regner on September 23, 1948, evidenced by a Deed of Absolute Sale. 7 On October 11, 1954, Original Transfer Certificate of Title No. P-247 was issued to Teofilo R. Regner by virtue of Homestead Patent No. V-35585. 8 Teofilo Regner sold the parcel of land covered by OCT No P-247 to Benjamin Pongos (defendant-appellee) in a Deed of Sale Registered Land on September 18, 1962. 9 Two days after the sale, defendant-appellee sought approval of the sale of homestead patent V-35585 (OCT No. P-247) from the Department of Agriculture and Natural Resources 10 and on October 2, 1962, defendant-appellee was issued TCT No. T-618 in lieu of OCT No. P-247. 11 Defendant-appellee declared the property for tax purposes in his name from 1962 and has been paying real estate taxes for the property since then. 12
After trial on the merits, the court a quo rendered the assailed decision on September 8, 1992, the fallo of which reads: TACEDI
"WHEREFORE, judgment is hereby rendered for the defendant and against the plaintiff. The defendant, Benjamin Pongos, is declared the lawful owner of Lot 10959 of the Ormoc Cadastre and covered by TCT 618 of the Registry of Titles and Deeds of the Province of Leyte. Plaintiff is directed to pay the defendant the sum of FIVE HUNDRED THOUSAND PESOS (P500,000.00) as moral damages and the further sum of THIRTY THOUSAND FIVE HUNDRED (P30,500.00) PESOS as reimbursement of his expenses and to pay the costs.
SO ORDERED." 13
Aggrieved, the plaintiff filed the instant appeal ascribing to the court a quo the following errors: 14
"I
THE TRIAL COURT ERRED IN ADMITTING WITH GRAVE ABUSE OF DISCRETION QUESTIONABLE DEED OF CONVEYANCES.
II
THE TRIAL COURT ERRED EXCEEDINGLY IN CONSIDERING OWNERSHIP OF ORIGINAL CERTIFICATE OF TITLE NO. P-247 AS VALID EVEN IN THE NAME OF TWO REGISTERED OWNERS.
III
THE TRIAL COURT ERRED IN EXCLUDING THE LAST CONVEYANCE PRESENTED AS EXHIBIT AND REFUSED TO APPRECIATE THE PREPONDERANCE OF EVIDENCE IN FAVOR OF THE PLAINTIFFS-APPELLANTS."
In their first assigned error, plaintiff-appellant assails the admission in the evidence of the three documents of sale from which defendant-appellee allegedly acquired his right to the property. Plaintiff-appellant insists that the deed of conveyance were all fabricated and spurious. To prove the same, plaintiff-appellant submitted three (3) certifications from the Records Management and Archives Office, Manila. The first certification states that the notarized Deed of Sale executed by Felix Bañez in favor of Francisco Festin on January 15, 1946 is not available in their files because the latest notarial record of Notary Public Victorio A. Laurente is the year 1938. 15 The second certification states that they have no copy of the Deed of Absolute Sale executed by Francisco Festin in favor of Teofilo Regner on September 23, 1948. 16 The third certification states that there is no notarial record of notary public Galdino B. Jardin in their file and as such they have no copy of a Deed of Absolute Sale executed by Teofilo Regner in favor of Benjamin Pongos on September 18, 1962. 17 These certifications, however, do not in any way prove that the deeds of conveyances are spurious or fabricated. The certifications merely state that the Records Management and Archives Office do not have a copy of the Deeds of Sale. Otherwise stated, the certifications do not conclusively prove that the deeds of conveyances were forged or fabricated. Nonetheless, We find other indications that fraud existed in the transactions. First, the Deed of Sale executed by Felix Bañez in favor of Francisco Festin covers a 24 hectare property whereas the Deed of Sale executed by Francisco Festin in favor of Teofilo Regner covers an exact area of 15.3542 hectares and the Deed of Sale executed by Teofilo Regner in favor of defendant-appellee Benjamin Pongos contains an area of 15 hectares, 35 ares and 42 centares. It appears that the area in the deed of sale from Festin to Regner and then to defendant-appellee was restated to conform to the area of the homestead patent of Felix Bañez which is covered by OCT No. 1477. Even assuming that there was merely an error in indicating the area in the Deed of Sale from Felix Bañez to Francisco Festin, still it becomes glaringly suspect why OCT No. 1477 was not indicated in the Deed of Sale. Felix Bañez was granted a homestead patent as early as November 9, 1938 and for which OCT No. 1477 was issued in his favor. The sale to Festin was made on January 15, 1946. Six years have passed from the issuance of OCT No. 1477 to its sale in 1946, yet the deed of sale did not indicate that the property sold is covered by a homestead patent or a certificate of title. Again, even if We grant that there was merely an oversight in the non-disclosure that the property was covered by an original certificate of title, it boggles the mind why the subsequent purchaser of the property, Teofilo Regner, should still apply for a homestead patent of the same land which he acquired by purchase from Festin if the said lot is already covered by a title. This is the second indication of fraud. Nobody in his right mind would go through the tedious and expensive process of proving a homestead patent from the Bureau of Lands (now Land Management Bureau) if he, as buyer, will merely utilize the title previously issued over said lot. Thus, the story of defendant-appellee as to the source of his right of ownership is bereft of evidence and contrary to common human behavior.
As argued by the plaintiff-appellant, homestead patent no. V-35585 covered by OCT No. P-247 from which defendant-appellee acquired his right to the land is null and void because of the existence of OCT No. 1477 which is a prior certificate (second assigned error).
The trial court declined to resolve the issue regarding the legality and validity of the two certificates covering the same land. A close scrutiny and examination of OCT No. 1477 and OCT No. P-247, readily reveals that, indeed, two homestead patents were issued for the same land and both certificates of title cover one and the same property. OCT No. 1477 in the name of Felix Bañez was issued on November 9, 1938 while OCT No. P-247 in the name of Teofilo Regner was issued on January 11, 1954. Jurisprudence dictates that as between OCT No. 1477 and OCT No. P-247, the earlier certificate of title prevails. As held in the case of Acedo vs. Court of Appeals 18:
"We have laid the rule that where two certificates of title are issued to different persons covering the same land in whole or in part, the earlier in date must prevail as between original parties and in case of successive registrations where more than one certificate is issued over the land, the person holding under the prior certificate is entitled to the land as against the person who rely on the second certificate. The purchaser from the owner of the latter certificate and his successors, should resort to his vendor for redress, rather than molest the holder of the first certificate and his successors, who should be permitted to rest secure in their title."
Explaining this rule, the Supreme Court in the case of Rural Bank of Compostela vs. Court of Appeals 19 said:
". . . The issuance of a free patent effectively segregates or removes the land from the public domain, i.e. the land ceases to be part of the public domain. Therefore, it is rendered beyond the jurisdiction or authority of the Director of Lands. The principle then in respect to compliance with the conditions for judicial confirmation of imperfect or incomplete titles under Sec. 48 (b) of C.A. No. 141, as further amended by R.A. No. 1942 applies by analogy. The rule under the latter is that when conditions specified therein are complied with, the possessor is deemed to have acquired, by operation of law, a right to a government grant, without necessity of a certificate of title being issued, and the land ceases to be part of the public domain and beyond the authority of the Director of Lands."
Prescinding from this ruling, the Secretary of Agriculture and Natural Resources is devoid of authority to issue another homestead patent covering the lot where a homestead patent was already issued because the property has already been segregated from the public domain. Simply, when a homestead patent was already issued for a particular land, the property becomes private land. The government can revoke the homestead patent issued 20 but if not revoked, the property remains to be private land and is already beyond its jurisdiction to issue a new homestead patent. 21 Accordingly, OCT No. P-247 in the name of Teofilo Regner by virtue of Homestead Patent No. V-35585 is null and void because the land is already covered by OCT No. 1477. TCT No. T-618 issued in lieu of OCT No. P-247 must therefore be cancelled; the defendant-appellee acquired nothing therefrom.
This notwithstanding, defendant-appellee maintains that his ownership and possession of the property could not be disturbed because he is a buyer in good faith. Plaintiff-appellant contends otherwise asserting that the defendant-appellee could not a buyer in good faith because he paid for the same property to two different persons who claims ownership of the property (third assigned error). Stated differently, defendant-appellee knew that there is an infirmity in the certificate of title presented to him by Teofilo Regner. DISTcH
In a Deed of Sale dated September 18, 1962, defendant-appellee paid Teofilo Regner the amount of Four Thousand Pesos (P4,000) for a parcel of land covered by OCT No. P-247, and eleven (11) days thereafter or on September 29, 1962, he paid Democrita Catubig the sum of Six Thousand Five Hundred Pesos (P6,500.00) for two parcels of land, one of which is a parcel of land embraced and covered by OCT No. P-247. 22 Defendant-appellee was not able to give a satisfactory explanation why he must pay two different persons for the same land. When confronted with the Deed of Sale executed by Democrita Catubig in his favor (Exhibit "J"), he explained that he bought the ownership de jure from the spouses Teofilo Regner and Generosa Laplana and bought the ownership de facto from the spouses Cirilo Tan and Democrita Catubig. 23 To the mind of this Court, there is no de facto or de jure ownership of the land. Ownership is indivisible. The fact of ownership is vested to the one with the legal title to the property. As a former judge, the defendant-appellee must be aware of this. This issue was not controverted by the defendant-appellee in his Brief. Defendant-appellee attacked the argument on technicalities stating that Exhibit "J" was not offered in evidence, hence the trial court did not err when it did not include the said exhibit in the disposition of the case. 24 However, after a review of the proceedings in the court a quo, this Court found that the Deed of Sale was actually marked during the October 18, 1991 hearing and became part of the testimony of the defendant-appellee. Evidence not offered may still be admitted against the adverse party if, first, it has been duly identified by testimony duly recorded and, second, it has itself been incorporated in the records of the case. 25 Thus, Exhibit "J", though not formally offered may still be considered owing to the fact that the same has been identified by the defendant-appellee himself and it was incorporated in the records of the case. 26 The Deed of Sale executed by Democrita Catubig (Exhibit "J") belies defendant-appellee's claim that he is a buyer in good faith. The essence of bona fides or good faith lies in the validity of one's right, ignorance of a superior claim and absence of intention to overreach another. 27 Here, the defendant-appellee is aware of the infirmity of Teofilo Regner's title, hence, he could not be in good faith. Even assuming that defendant-appellee is a buyer in good faith and for value, the fact remains that OCT No. P-247 is null and void and such nullity affects even bona fide purchasers for value. 28
If all else go against the defendant-appellee, he insists that laches must be applied in his favor. Unfortunately, laches is an equitable defense and equity may be invoked by one who comes to the court with clean hands. 29 This is so because among the maxims of equity are (1) he who seeks equity must do equity, and (2) he who comes into equity must come with clean hands. 30 Simply, equity may be denied to one whose conduct has been inequitable, unfair, dishonest, or fraudulent or deceitful as to the controversy in issue. 31 As discussed, there are badges of fraud which renders defendant-appellee's acts beyond the reach of equity. Hence, this Court is not disposed to grant to defendant-appellee the relief of laches.
Finally, this Court finds the award of moral damages to the defendant-appellee unwarranted. While the plaintiff-appellant did not answer defendant-appellee's counterclaim for damages, it does not mean that the trial court should grant the damages as prayed for sans satisfactory proof that the awardee is entitled thereto. In a plea for moral damages and attorney's fees, it must be satisfactorily shown that the person claiming such has suffered "mental anguish" as provided in Article 2219 and Article 2290 of the New Civil Code. 32 There is no showing that defendant-appellee suffered mental anguish, besmirched reputation, humiliation, wounded feelings and physical anxiety. More importantly, plaintiff-appellant filed the instant case in the honest belief that he has right to the property in question and was in fact sustained by this Court. The declaration that defendant-appellee has no legal right of ownership over the subject lot certainly defeats the latter's claim for damages.
WHEREFORE, the decision of the trial court dated September 8, 1992 is REVERSED and SET ASIDE and a new one entered (1) declaring the Heirs of Felix Bañez as the legal owners with the right to possess of the property described in OCT No. 1477; and (2) cancelling TCT No. T-618 in the name of Benjamin Pongos.
SO ORDERED.
Salas and Cruz, JJ., concur.
Footnotes
1. Complaint; Records, pp. 3-5.
2. Records, pp. 9-26.
3. Records, p. 60.
4. Answer; Records, pp. 61-76.
5. Exhibit "A".
6. Exhibit "7".
7. Exhibit "6".
8. Exhibit "1", Exhibit "G".
9. Exhibit "2".
10. Exhibit "3".
11. Exhibit "4".
12. Exhibits "11", "11-A" to "11-C" inclusive and other sub-markings.
13. Decision; Records p. 546.
14. Appellants' Brief; Rollo, p. 51.
15. Exhibit "B" and sub-markings.
16. Exhibit "C" and sub-markings.
17. Exhibit "D" and sub-markings.
18. 33 SCRA 936, 942.
19. 271 SCRA 76, 85-86.
20. Republic vs. Court of Appeals, et al., 281 SCRA 639 [1997].
21. Acedo vs. Court of Appeals, 33 SCRA 936, 940-941.
22. Exhibit "J".
23. Ibid., p. 39.
24. Appellee's Brief, pp. 121-123; Rollo, pp. 236-238.
25. Tabuena vs. Court of Appeals, 196 SCRA 650 [1991].
26. Bill of Exhibits No. 8, pp. 540-541.
27. Godoy vs. Ramirez, 168 SCRA 85 [1988].
28. Acedo vs. Court of Appeals, 33 SCRA 936, 942.
29. University of the Philippines vs. Catungal, Jr., 272 SCRA 221, 237.
30. Ibid.
31. Ibid.
32. Marquez vs. Court of Appeals, 300 SCRA 653 [1998].