9

THIRD DIVISIONPRIVATE DEVELOPMENT CORPORATION OF THE PHILIPPINES, PELAGIO TOLOSA, in his capacity as Register of Deeds, General Santos City, and ATANACIO M. VILLEGAS,Petitioners, - versus -THE COURT OF APPEALS and GENERAL SANTOS DOCTORS HOSPITAL, INC.,Respondents. G.R. No. 136897Present:PANGANIBAN,J., Chairman SANDOVAL-GUTIERREZ, CORONA, CARPIO MORALES, and GARCIA,JJ. Promulgated:November 22, 2005

x------------------------------------------------------------------------------------xD E C I S I O NGARCIA,J.:In this petition for review oncertiorariunder Rule 45 of the Rules of Court, petitioners Private Development Corporation of the Philippines and Atanacio M. Villegas seek the reversal and setting aside of the following issuances of the Court of Appeals inCA-G.R. CV No. 52542, to wit:1.Decision dated July 16, 1998,[1]affirming an earlier decision of the Regional Trial Court at General Santos City which ordered the petitioners, in particular petitioner Atanacio M. Villegas, to present before the Register of Deeds of General Santos City TCT No. T-32610 covering Lot 908-B-6-L-4-B for the annotation thereon of aMemorandum of Agreementestablishing an easement of right-of-way in favor of private respondent General Santos Doctors Hospital, Inc.; and2.Resolution dated January 8, 1999,[2]denying petitioners motion for reconsideration. Culled from the records are the following factual antecedents:The spouses Agustin Narciso and Aurora Narciso (the Narcisos, for short) were the original owners of two (2) lots situated at Barrio Lagao, General Santos City, Cotabato.The first lot, which is a portion of a bigger parcel of land known as Lot No. 908-B-6-L-3 and covered by TCT No. 22608, is identified as Lot No. 908-B-6-L-3-A, hereinafter referred to as theinterior lot,with an area of one (1) hectare. Adjacent to this lot and abutting the national highway is the second lot, Lot No. 908-B-6-L-4-B, hereinafter referred to as theexterior lot, covered by TCT No. 13550.[3]On September 6, 1968, the Narcisos executed in favor of herein respondent,General Santos Doctors Hospital, Inc. (GSDHI) anOption to Buy[4]theinterior lot, subject, among others, to the condition that:5. The vendors shall construct a 10 meter wide road commencing from the National Highway, traversing the property of the Vendors and terminating perpendicularly at the mid-point of the Southern boundary of the property subject of this Option, facing the national highway. Additionally, the vendors shall also construct a 10 meter wide road alongside the same southern boundary of the subject land, forming a right angle with the road first above described. The Vendors shall also provide drainage facilities.[5]True enough, on September 25, 1968, theinterior lotwas bought by GSDHI, as evidenced by a Deed of Absolute Sale.[6]On the same day of the sale, aMemorandum of Agreement[7]was executed by and between the Narcisos and GSDHI, paragraph 7 of which practically reproduced the same condition,supra,appearing in the earlierOption to Buy,thus:7. The vendors [Narcisos] also known as Party of the First Part, shall construct a ten (10) meter wide road commencing from the National Highway, traversing the property of the vendors and terminating perpendicularly at the mid-point of the Southern boundary of the property subject of the sale facing the National Highway. Additionally, the vendors or party of the first part, shall also construct a ten (10) meter wide road alongside the same Southern boundary of the subject land, forming a right angle with the road first above-described. The vendors shall also provide drainage facilities.[8]Years later, or on September 30, 1977, theexterior lotwas mortgaged by the Narcisos to one of the petitioners herein,Private Development Corporation of the Philippines(PDCP). Upon the Narcisos failure to pay the mortgage obligation, the mortgage was foreclosed and the mortgaged property (exterior lot) sold at a public auction on June 21, 1982 with PDCP as the lone bidder. Accordingly, the Narcisos title covering theexterior lotwas cancelled and in lieu thereof TCT No. 23202 was issued in the name of PDCP.On April 18, 1988, in the Regional Trial Court at General Santos City, respondent GSDHI, claiming that it has an easement of right-of-way over the foreclosed property (exterior lot), filed a complaint for specific performance against PDCP, therein impleading the Register of Deeds of General Santos City, Pelagio T. Tolosa, as a nominal party-defendant, to compel PDCP to present before the Register of Deeds its duplicate copy of TCT No. 23202 over theexterior lotfor the annotation thereon of theMemorandum of Agreement establishing an easement of right-of-way in favor of GSDHI.In its complaint, docketed with the trial court asCivil Case No. 4128, respondent GSDHI, as plaintiff,alleged that the easement was a condition and primary consideration for its purchase from the Narcisos of theinterior lotso that the hospital it intends to build thereat would have an access to the national highway; that the grant is evidenced by two (2) public documents executed between it and the Narcisos, i.e., Option to Buy[9]the interior lot dated September 6, 1968 and Memorandum of Agreement[10]dated September 25, 1968; that the portion covered by the easement was inadvertently and erroneously included in the mortgage of theexterior lotas the same was not segregated from the mother title; that upon informing PDCP of the easement on January 27, 1983, it (respondent) even offered to buy the whole exterior lot so as to avoid future litigation but although negotiations lasted until August of 1988, no agreement was reached on the price, hence, it (respondent) opted to continue and preserve the easement of right-of-way established in its favor since 1968.In itsAnswer, PDCP denied any knowledge of the alleged easement of right-of-way, averring that it was not a party to any of the transactions between respondent and the Narcisos. PDCP argued that the Option to Buy and Memorandum of Agreement cannot by themselves constitute a valid agreement to create and vest in favor on respondent an easement of right-of-way in the absence of terms providing for, among others, the amount of consideration therefor. And, even assuming that theMemorandum of Agreementcreated such an easement, PDCP contended that it cannot be bound thereby because said agreement was not duly inscribed and registered with the Registry of Deeds. Furthermore, PDCP asserted that it is an innocent purchaser for value and in good faith, hence, the alleged easement cannot be enforced against it.Meanwhile, during the pendency of the case, or sometime in January, 1989, PDCP sold theexterior lotto the other petitioner herein,Atanacio M. Villegas. On account thereof, PDCPs title over theexteriorlot was cancelled and TCT No. 32610 issued in the name of Villegas.Consequently, respondent GSDHI amended its complaint by impleading Villegas as additional party-defendant. For his part, Villegas formally adopted PDCPs aforementioned allegations and defenses in itsAnswer.Eventually, in a decision dated December 15, 1998,[11]the trial court rendered judgment for plaintiff GSDHI and against defendants PDCP and Villegas, to wit:Accordingly, judgment is rendered for the plaintiff and against the defendants ordering the latter, particularly Atanacio M. Villegas to present before the Register of Deeds of General Santos City Transfer Certificate of Title No. T-32610 for annotation of the Memorandum of Agreement establishing the casement of right-of-way in favor of the plaintiff.SO ORDERED.Explains the trial court in its decision:The long and short of the seeming complexity of the issues raised by the parties is summed up by the question of whether or not the plaintiff under the circumstances is entitled to compel the defendants particularly Atanacio M. Villegas to respect and annotate in the certificate of title the easement of right of way, or conversely whether the defendants are innocent mortgagor or purchaser for value, hence not bound by it.The dominion of the plaintiff over the disputed road that virtually cut into two lot 908-B-6-L-4-B comprising a total area of 1,000 square (10 m x 100m) was elucidated and clarified by Agustin N. Narciso, the source of plaintiffs rights. (Exhibits A and B) When Lot 908-B-L-3-A was sold by Narciso to GSDHI way back on September 25, 1963 the imperfection of the document of absolute sale was discovered at once. (Exhibit D) So a Memorandum of Agreement was executed that same day to rectify the omission and put in black and white the agreement regarding the direct access road to the national highway passing through the adjoining lot 908-B-6-L-4-B then owned by Narciso. (Exhibit E) The relevant portion of the agreement provides: xxx 7. The vendors also known as Party of the First Part, shall construct a ten (10) meter wide road commencing from the National Highway, traversing the property of the vendors and terminating perpendicularly at the mid-point of the Southern boundary of the property subject of the sale facing the National Highway. Additionally, the vendors or party of the first part, shall also construct a ten (10) meter wide road alongside the same Southern boundary of the subject land, forming a right angle with the road first above-described. The vendors shall also provide drainage facilities. xxx Prior to the execution of the Deed of Absolute Sale and the Memorandum of Agreement, the Narcisos and the plaintiff executed a document denominated Option to Buy on September 6, 1968, the pertinent portion of which provides:xxx 5. The vendors shall construct a 10 meter wide road commencing from the National Highway, traversing the property of the Vendors and terminating perpendicularly at the mid-point of the Southern boundary of the property subject of this Option, facing the national highway. Additionally, the vendors shall also construct a 10 meter wide road alongside the same southern boundary of the subject land, forming a right angle with the road first above described. The Vendors shall also provide drainage facilities. xxxIn keeping with their agreement with the plaintiff, the Narcisos caused to be constructed a 10 meter wide road starting from the National Highway passing through Lot 908-B-6-L-4-B until the mid-point of the Southern boundary of Lot 908-B-L-3-A which was the property sold to the plaintiff. He also had a 10 meter wide road alongside the southern boundary of the land sold to the plaintiff forming an angle with the road that commenced from the national highway.These undertakings of the Narcisos were in compliance with their agreement with the plaintiff to guarantee direct access to the national highway from the hospital that was to be constructed by the plaintiff on inner Lot 908-B-L-3-A. The total consideration for the sale of Lot 908-B-L-3-A covering an area of one hectare was P100,000.00 and an additional of P10,000.00 was paid for the 10 meter wide road right-of-way from the southern boundary of the property straight to the national highway with an approximate length of 100 meters. This was not specifically mentioned in the Deed of Absolute Sale but this was in pursuance of their agreement that the one hectare lot was priced at P10.00 per square meter, or for P100,000.00. Narcisos agreement with the plaintiff for the construction of the road right-of-way was for its use in perpetuity by the plaintiff as well as the public. The road right-of-way was constructed immediately upon execution of the Deed of Sale but it is being maintained ever since by the plaintiff. The road was located in the shortest distance between the national highway and the hospital of the plaintiff and because of it the property over which the easement of road right-of-way passing through at the middle was substantially benefited making it commercial. Sometime in 1976 or 1977, the Narcisos mortgaged Lot 908-B-6-L-4-B which was the servient estate to PDCP thru its branch office in Davao City. As a requirement, the Narcisos submitted to PDCP the title of the land, the map and the sketch on the easement that was granted by the plaintiff to the CSDHI. When the property was inspected, Agustin Narciso showed the extent of the property offered as collateral and together with the manager and other officers of the PDCP even passed through the road right-of-way in question. The metes and bounds of the Narcisos property was also shown to the officers of the PDCP including the signboard along the national highway leading to the hospital. Thereafter the loan was approved. On cross-examination, Agustin Narciso admitted having mortgaged the property covered by his title but excluding the 10 X 100 meter road which was paid for by the plaintiff. The Memorandum of Agreement, however, and the Option to Buy which embodied the meeting of minds of the plaintiff and the Narcisos regarding the easement of right-of-way over Lot 908-B-6-L-4-B was not registered or annotated. Agustin Narciso reiterated that when the property mortgaged to PDCP was verified, several personnel of PDCP came, a certain Mr. Rey Feria, Mr. Lim, Mr. Alcantara and a certain Mr. Delgado. He did not, however, furnish them copies of the Option to Buy and the Memorandum of Agreement.The importance of the road right-of-way to the plaintiff was underscored by officers of the plaintiff. Acquisition of the hospital site was premised on the grant by the then owner and seller Agustin Narciso of the ten meter wide access road through the servient property owned by the seller. It was a conditionsine qua nonof the contract between plaintiff and the Narcisos because the plaintiff wanted the site to be a bit far from the national highway but with easy and direct access to the highway because of the nature of the business they were putting up. The hospital having been constructed sometime in 1968, plaintiff maintained the 10 x 100 meters road to the highway and used it including the public openly, continuously and notoriously without being challenged by any party. When the Narcisos failed to pay their account with the defendant PDCP Lot 908-B-L-3-B which was put up as guarantee thereof was foreclosed and in the subsequent public auction sale the defendant PDCP was the lone bidder and therefore it became the owner.The plaintiff learned of the acquisition by PDCP of the property previously owned by the Narcisos and steps were taken by the plaintiff to buy peace when it was realized that the Memorandum of Agreement as well as the Option to Buy evidencing their ownership of the road right-of-way of 10 x 100 meters was only duly recorded with the Register of Deeds. Negotiations were had with the defendant PDCP but no agreement was reached because of the wide gap between the offers and counter offers made.In the meantime, the defendant PDCP never asserted that it is the rightful owner of the road right-of-way, neither did it interrupt the continued use by the plaintiff and the general public of the road in question.Requests were made of the defendant PDCP to allow the plaintiff to have its right over the road right-of-way annotated in the title of the said defendant but it was ignored. Overtures were made by the plaintiff to buy peace or as gesture of compromise to the defendant PDCP but those were fruitless.The defendants, particularly the original and one of the principal defendants, did not challenge the genuiness and authenticity of the documents in the possession of the plaintiff and presented in evidence like the Option to Buy, Memorandum of Agreement and the Deed of Absolute Sale. The centerpiece of PDCPs defense was the nonregistration of the Option to Buy and Memorandum of Agreement embodying the right of the plaintiff over the contested road right of way.The defendant Atanacio M. Villegas relied entirely on the defenses put up by its predecessor-in-interest PDCP.It was the contention also of the defendant PDCP that had it known of the existence of the road right-of-way over the property mortgaged and subsequently acquired by it in a public auction sale, they would not have paid the big amount for the property considering that with the existence of the road right-of-way the value of the property was very much diminished.Considering, however, that the defendant PDCP is a banking institution and it is normal business practice that when loan is granted the property offered as security is invariably inspected, it would be unlikely cr unrealistic that the defendant PDCP accepted Lot-908-B-6-L-4-B without knowing its actual state. The evidence also disclosed that when the loan was contracted by the previous owner Agustin Narciso several officers of the bank repaired to the area and made an on-the-spot verification of the land.On the part of Atanacio Villegas, his attorney-in-fact who took the witness stand affirmed that the road right-of-way has been in existence way back in the late 1960s and he noticed it when he frequently traveled to General Santos City even when this was still a rustic community as reflected in his testimony.In the light of the undisputed facts obtaining that the road right-of-way is conspicuously situated and has been in existence and in constant use for a long period of time, or for over 25 years failure of the plaintiff to cause the registration of its road right-of-way did not in the face of reality militate against its right over the casement.[12] From the trial courts decision, petitioners went to the Court of Appeals (CA) whereat their appellate recourse was docketed asCA-G.R. CV No. 52542.In the herein assailedDecision dated July 16, 1998, the CA affirmed that of the trial court.With their motion for reconsideration having been denied by the appellate court in its equally challengedResolution of January 8, 1999, petitioners are now with usviathis petition for review, imputing error to the CA: (1) in affirming the lower courts decision without first resolving the issue of whether or not respondent is entitled to an easement of right-of-way; (2) in finding and concluding that petitioners are not innocent mortgagees or purchasers for value; and (3) in not holding that respondent GSDHI is not entitled to a legal easement of right-of-way.The petition is bereft of merit.At bottom, the issues are: (1) whether or not respondent GSDHI has an easement of right-of-way over theexterior lot(Lot No. 908-B-6-L-4-B); and (2) whether or not petitioners are innocent mortgagees/purchasers for value of the same lot.We resolve both issues in favor of respondent.As defined, an easement is a real right on anothers property, corporeal and immovable, whereby the owner of the latter must refrain from doing or allow somebody else to do or something to be done on his property, for the benefit of another person or tenement.[13] Easements are established either by law or by the will of the owner. The former are called legal, and the latter, voluntary easements.[14]As correctly found by the trial court, the easement of right-of-way over theexterior lotin favor of respondent GSDHI was voluntarily constituted by agreement between the latter and the original owner thereof, the Narcisos.It is beyond cavil that the Narcisos did intend to establish an easement of right-of-way over theexterior lotfor the respondents benefit. This is very evident from the fact that in the Option to Buy in connection with the interior lot, one of the conditions stipulated upon is that the Narcisos will construct two (2) ten-meter wide roads along theexterior lotfrom the interior lot leading to the national highway.[15]True, the Deed of Absolute Sale between respondent and the Narcisos covering the interior lot did not embody the aforementioned condition. It was precisely to cure this deficiency, however, that on the very same day the deed of sale was executed, the Narcisos and respondent forged a Memorandum of Agreement to reflect what they failed to state in the document of sale. In the precise words of the trial court: xxxthe imperfection of the document of absolute sale was discussed at once (Exhibit D). So a Memorandum of Agreement was executed that same day to rectify the omission and put in black and white the agreement regarding the direct access road to the national highway passing through the adjoining lot 908-B-6-L-4-B then owned by Narciso.Moreover, contrary to the petitioners assertion, the Narcisos grant of the easement to respondent was for a valuable consideration. Again, we quote from the trial courts decision:The total consideration for the sale of Lot 908-B-L-3-A covering an area of one hectare was P100,000.00 and an additional of P10,000.00 was paid for the 10 meter wide road right-of-way from the southern boundary of the property straight to the national highway with an approximate length of 100 meters. This was not specifically mentioned in the Deed of Absolute Sale but this was in pursuance of their agreement that the one hectare lot was priced at P10.00 per square meter, or for P100,000.00.[16]In any event, it bears stressing that the two courts below are one in their common factual finding about the existence of the conventional easement of right of way in favor of respondent. Absent, as here, of any credible evidence to the contrary, the Court is not inclined to disturb such a finding. After all, this Court is not a trier of facts.Having ruled on the existence of an easement of right of way, we now come to the second issue.It is petitioners posture that they cannot be bound by the subject easement because theMemorandum of Agreementestablishing the same was not annotated in the certificate of title of theexterior lotand registered with the Registry of Deeds. Having relied on a title which does not reflect any easement thereon, petitioner PDCP contends that it was an innocent mortgagee and later an innocent purchaser for value. Chanting the same tone, petitioner Villegas insists that he, too, is an innocent purchaser of said lot.We are unimpressed.Concededly, a person, be he a buyer or mortgagee, dealing with a titled property, as the exterior lot is, is not required to go beyond what appears on the face of the covering title itself.[17]Section 39 of Act 496 or theLand Registration Decree[18]says as much.Unfortunately for petitioner PDCP, however, the aforementioned rule does not apply to banks,[19]of which PDCP is. So it is that inRobles vs. CA,[20] this Court, citingTomas vs. Tomas,[21]ruled:xxx Banks, indeed, should exercise more care and prudence in dealing even with registered lands, than private individuals, for their business is one affected with public interest, keeping in trust money belonging to their depositors, which they should guard against loss by not committing any act of negligence which amounts to lack of good faith by which they would be denied the protective mantle of land registration statute, Act 496, extended only to purchasers for value and in good faith, as well as to mortgagees of the same character and description. xxxConsidering the foregoing, and bearing in mind that judicial notice is taken of the standard practice for banks, before approving a loan, to send representatives to the premises of the land offered as collateral,[22]PDCPs feigned ignorance of the road right-of-way, much less of the existence of the road itself along the exterior lot, is simply ridiculous, to say the least, more so in the light of the factual findings of the two courts below that PDCP, contrary to its assertion, had indeed sent its personnel to inspect the land when the same was mortgaged to it by the Narcisos. For sure, as found by the appellate court, no less than PDCPs own Legal Officer, Virgilio Lagunilla, admitted that an appraisal was conducted by the bank on theexterior lotbefore accepting the mortgage thereof. Says the appellate court in this respect: We have the confirmation on cross examination of the PDCP Legal Officer, Virgilio Lagunilla, in the matter of PDCPs practice of appraising the property, being offered as collateral, which calls for an actual examination of the condition of the property. He even admitted that an appraisal was conducted by the bank on the exterior lot before the mortgage, the reason being that it is the Central Banks requirement to limit the loans of commercial banks to only 70% of the appraise value of the security being offered. As for PDCP, there was an uncharacteristic silence on the result of the appraisal of the exterior lot which presupposes the observation that the bank, at the time of the mortgage, knew about the existence of the easement. The nature alone of the easement of right-of-way, which is ten meters wide and open to the public for its use continuously supports the observation that its easement was never overlooked by the bank at the time of the propertys appraisal. We cannot allow actual notice of knowledge of the burden on the property to be denied on the mere pretension alone that the title does not bear any annotation of such burden.Equally unworthy of belief is petitioner Villegas protestation of innocence of the easement in question.It is a matter of record that prior to his purchase of the exterior lot, Villegas, through his attorney-in-fact, Benjamin Miranda, was very much aware of the existence of a road over said lot since the 1960s. Again, to quote from the assailed decision of the appellate court:xxx His (Mirandas) other admission was that Villegas knew of the easement before purchasing the property. He even added that he was consulted by Villegas himself before the purchase and he told him (Villegas) that there was an existing road from the hospital leading to the national highway.InLagandaon vs. CA,[23]we said:As a general rule, every buyer of a registered land who takes a certificate of title for value and in good faith shall hold the same free of all encumbrances except those noted on said certificate. It has been held, however, that where the party has knowledge of a prior existing interest which is unregistered at the time he acquired a right to the same land, his knowledge of that prior unregistered interest has the effect of registration as to him. xxx WHEREFORE, the assailed issuances of the appellate court areAFFIRMEDand this petitionDISMISSEDfor lack of merit.Costs against petitioners.SECOND DIVISIONKINGS PROPERTIESCORPORATION,Petitioner,- versus -CANUTO A. GALIDO,Respondent.G.R. No. 170023Present:CARPIO,J.,Chairperson,LEONARDO-DE CASTRO,*BRION,DEL CASTILLO, andABAD,JJ.Promulgated:November 27, 2009

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - xD E C I S I O NCARPIO,J.:The CaseKings Properties Corporation (petitioner) filed this Petition for Review on Certiorari[1]assailing the Court of Appeals Decision[2]dated 20 December 2004 in CA-G.R. CV No. 68828 as well as the Resolution[3]dated 10 October 2005 denying the Motion for Reconsideration. In the assailed decision, the Court of Appeals reversed the Regional Trial Courts Decision[4]dated 4 July 2000. This case involves an action for cancellation of certificates of title, registration of deed ofsaleandissuance of certificates of title filed by Canuto A. Galido (respondent) before Branch 71 of the Regional Trial Court of Antipolo City (trial court).The FactsOn 18 April 1966, the heirs of Domingo Eniceo, namely Rufina Eniceo and Maria Eniceo, were awarded with Homestead Patent No. 112947 consisting of four parcels of land located in San Isidro, Antipolo, Rizal (Antipolo property) and particularly described as follows:1.Lot No. 1 containing an area of 96,297 square meters;Lot No. 3 containing an area of 25,170 square meters;Lot No. 4 containing an area of 26,812 square meters; andLot No. 5 containing an area of 603 square meters.The Antipolo property with a total area of 14.8882 hectares was registered under Original Certificate of Title (OCT) No. 535.[5]The issuance of the homestead patent was subject to the following conditions:To have and to hold the said tract of land, with the appurtenances thereunto of right belonging unto the said Heirs of Domingo Eniceo and to his heir or heirs and assigns forever, subject to the provisions of sections 118, 121, 122 and 124 of Commonwealth Act No. 141, as amended, whichprovide that except in favor of the Government or any of its branches, units or institutions, the land hereby acquired shall be inalienable and shall not be subject to incumbrance for a period of five (5) years next following the date of this patent, and shall not be liable for the satisfaction of any debt contracted prior to the expiration of that period; that it shall not be alienated, transferred or conveyed after five (5) years and before twenty-five (25) years next following the issuance of title, without the approval of the Secretary of Agriculture and Natural Resources; that it shall not be incumbered, alienated, or transferred to any person, corporation, association, or partnership not qualified to acquire public lands under the said Act and its amendments; x x x[6]On 10 September 1973, a deed of sale covering the Antipolo property was executed between Rufina Eniceo and Maria Eniceo as vendors and respondent as vendee. Rufina Eniceo and Maria Eniceo sold the Antipolo property to respondent forP250,000.[7]A certain Carmen Aldana delivered the owners duplicate copy of OCT No. 535 to respondent.[8]Petitioner alleges that when Maria Eniceo died in June 1975, Rufina Eniceo and the heirs of Maria Eniceo (Eniceo heirs),[9]who continued to occupy the Antipolo property as owners, thought that the owners duplicate copy of OCT No. 535 was lost.[10]On 5 April 1988, the Eniceo heirs registered with the Registry of Deeds of Marikina City (Registry of Deeds) a Notice of Loss dated 2 April 1988 of the owners copy of OCT No. 535. The Eniceo heirs also filed a petition for the issuance of a new owners duplicate copy of OCT No. 535 with Branch 72 of the Regional Trial Court (RTC) of Antipolo, Rizal. The case was docketed as LRC Case No. 584-A.[11]On 31 January 1989, the RTC rendered a decision finding that the certified true copy of OCT No. 535 contained no annotation in favor of any person, corporation or entity. The RTC ordered the Registry of Deeds to issue a second owners copy of OCT No. 535 in favor of the Eniceo heirs and declared the original owners copy of OCT NO. 535 cancelled and considered of no further value.[12]On 6 April 1989, the Registry of Deeds issued a second owners copy of OCT No. 535 in favor of the Eniceo heirs.[13]Petitioner states that as early as 1991, respondent knew of the RTC decision in LRC Case No. 584-A because respondent filed a criminal case against Rufina Eniceo and Leonila Bolinas (Bolinas) for giving false testimony upon a material fact during the trial of LRC Case No. 584-A.[14]Petitioner alleges that sometime in February 1995, Bolinas came to the office of Alberto Tronio Jr. (Tronio), petitioners general manager, and offered to sell the Antipolo property. During an on-site inspection, Tronio saw a house and ascertained that the occupants were Bolinas relatives. Tronio also went to the Registry of Deeds to verify the records on file. Tronio ascertained that OCT No. 535 was clean and had no lien and encumbrances. After the necessary verification, petitioner decided to buy the Antipolo property.[15]On 14 March 1995, respondent caused the annotation of his adverse claim in OCT No. 535.[16]On 20 March 1995, the Eniceo heirs executed a deed of absolute sale in favor of petitioner covering lots 3 and 4 of the Antipolo property forP500,000.[17]On the same date, Transfer Certificate of Title (TCT) Nos. 277747 and 277120 were issued. TCT No. 277747 covering lots 1 and 5 of the Antipolo property was registered in the names of Rufina Eniceo, Ambrosio Eniceo, Rodolfo Calove, Fernando Calove and Leonila Calove Bolinas.[18]TCTNo. 277120 covering lots 3 and 4 of the Antipolo property was registered in the name of petitioner.[19]On 5 April 1995, the Eniceo heirs executed another deed of sale in favor of petitioner covering lots 1 and 5 of the Antipolo property forP1,000,000. TCT No. 278588 was issued in the name of petitioner and TCT No. 277120 was cancelled.[20]On 17 August 1995, the Secretary of the Department of Environment and Natural Resources (DENR Secretary) approved the deed of sale between the Eniceo heirs and respondent.[21]On 16 January 1996, respondent filed a civil complaint with the trial court against the Eniceo heirs and petitioner. Respondent prayed for the cancellation of the certificates of title issued in favor of petitioner, and theregistration of the deed of sale and issuance of a new transfer certificate of title in favor of respondent.[22]On 4 July 2000, the trial court rendered its decision dismissing the case for lack of legal and factual basis.[23]Respondent appealed to the Court of Appeals (CA). On 20 December 2004, the CA rendered a decision reversing the trial courts decision.[24]Respondent filed a motion for reconsideration, which the CA denied in its Resolution dated 10 October 2005.Aggrieved by the CAs decision and resolution, petitioner elevated the case before this Court.The Ruling of the Trial CourtThe trial court stated that although respondent claims that the Eniceo heirs sold to him the Antipolo property, respondent did not testify in court as to the existence, validity and genuineness of the purported deed of sale and his possession of the duplicate owners copy of OCT No. 535. The trial court stated that as owner of a property consisting of hectares of land, respondent should have come to court to substantiate his claim and show that the allegations of the Eniceo heirs and petitioner are mere fabrications.[25]The trial court noticed that respondent did not register the deed of sale with the Register of Deeds immediately after its alleged execution on 10 September 1973. Further, respondent waited for 22 long years before he had the sale approved by the DENR Secretary. The trial court declared that respondent slept on his rights.The trial court concluded that respondents failure to register the sale and secure the cancellation of OCT No. 535 militates against his claim of ownership. The trial court believed that respondent has not established the preponderance of evidence necessary to justify the relief prayed for in his complaint.[26]The trial court stated that Bolinas was able to prove that the Eniceo heirs have remained in actual possession of the land. The filing of a petition for the issuance of a new owners duplicate copy requires the posting of the petition in three different places which serves as a notice to the whole world. Respondents failure to oppose this petition can be deemed as a waiver of his right, which is fatal to his cause.[27]The trial court noted that petitioner is a buyer in good faith and for value because petitioner has exercised due diligence in inspecting the property and verifying the title with the Register of Deeds.[28]The trial court held that even if the court were to believe that the deed of sale in favor of respondent were genuine, still it could not be considered a legitimate disposition of property, but merely an equitable mortgage. The trial court stated that respondent never obtained possession of the Antipolo property at any given time and a buyer who does not take possession of a property sold to him is presumed to be a mortgagee only and not a vendee.[29]The Ruling of the Court of AppealsThe CA ruled that the deed of sale in favor of respondent, being a notarized document, has in its favor the presumption of regularity and carries the evidentiary weight conferred upon it with respect to its due execution. The CA added that whoever asserts forgery has the burden of proving it by clear, positive and convincing evidence because forgery can never be presumed. The CA found that petitioner and the Eniceo heirs have not substantiated the allegation of forgery.[30]The CA pointed out that laches has not set in. One of the requisites of laches, which is injury or prejudice to the defendant in the event relief is accorded to the complainant or the suit is not held to be barred, is wanting in the instant case. The CA added that unrecorded sales of land brought under the Torrens system are valid between parties because registration of the instrument is merely intended to bind third persons.[31]The CA declared that petitioners contention regarding the validity of the questioned deed on the ground that it was executed without the approval of the DENR Secretary is untenable. The DENR Secretary approved the deed of sale on 17 August 1995. However, even supposing that the sale was not approved, the requirement for the DENR Secretarys approval is merely directory and its absence does not invalidate any alienation, transfer or conveyance of the homestead after 5 years and before 25 yearsfrom the issuance of the title which can be complied with at any time in the future.[32]The CA ruled that petitioner is a buyer in bad faith because it purchased the disputed properties from the Eniceo heirs after respondenthad caused the inscription on OCT No. 535 of an adverse claim. Registration of the adverse claim serves as a constructive notice to the whole world. Petitioner cannot feign ignorance of facts which should have put it on guard and then claim that it acted under the honest belief that there was no defect in the title of the vendors. Knowing that an adverse claim was annotated in the certificates of title of the Eniceo heirs, petitioner was forewarned that someone is claiming an interest in the disputed properties.[33]The CA found no merit in petitioners contention that the questioned deed of sale is an equitable mortgage. The CA stated that for the presumption of an equitable mortgage to arise, one must first satisfy the requirement that the parties entered into a contract denominated as a contract of sale and that their intention was to secure an existing debt by way of mortgage.[34]The CA stated that the execution of the notarized deed of sale, even without actual delivery of the disputed properties, transferred ownership from the Eniceo heirs to respondent. The CA held that respondents possession of the owners duplicate copy of OCT No. 535 bolsters the contention that the Eniceo heirs sold the disputed properties to him by virtue of the questioned deed.[35]The CA reversed the trial courts decision. The dispositive portion of the CA decision reads:WHEREFORE, the appealed decision of the Regional Trial Court of Rizal (Antipolo, Branch 71) is REVERSED and SET ASIDE and another rendered as follows:1.DECLARING NULL AND VOID TRANSFER CERTIFICATES OF TITLES NOS. 277747, 277120 AND 278588 OF THE REGISTRY OF DEEDS OF MARIKINA CITY (THE LAST TWO IN THE NAME OF DEFENDANT-APPELLEE KINGS PROPERTIES CORPORATION), THE DERIVATIVE TITLES THEREOF AND THE INSTRUMENTS WHICH WERE THE BASES OF THE ISSUANCE OF SAID CERTIFICATES OF TITLE; AND2.DECLARING PLAINTIFF-APPELLANT CANUTO A. GALIDO THE OWNER OF FEE SIMPLE OF LOT NOS. 1, 3, 4, 5 FORMERLY REGISTERED UNDER ORIGINAL CERTIFICATE OF TITLE NO. 535 IN THE NAME OF THE HEIRS OF DOMINGO ENICEO, REPRESENTED BY RUFINA ENICEO, AND ORDERING THE REGISTER OF DEEDS OF MARIKINA CITY TO ISSUE NEW TRANSFER CERTIFICATES OF TITLE FOR SAID PARCELS OF LAND IN THE NAME OF PLAINTIFF-APPELLANT CANUTO A. GALIDO, UPON PAYMENT OF THE PROPER FEES AND PRESENTATION OF THE DEED OF SALE DATED SEPTEMBER 10, 1973 EXECUTED BY RUFINA ENICEO AND MARIA ENICEO, AS SOLE HEIRS OF THE LATE DOMINGO ENICEO, IN FAVOR OF THE LATTER.[36]The IssuesPetitioner raises two issues in this petition:1.Whether the adverse claim of respondent over the Antipolo property should be barred by laches;[37]and2.Whether the deed of sale delivered to respondent should be presumed an equitable mortgage pursuant to Article 1602(2) and 1604 of the Civil Code.[38]The Ruling of the CourtValidity of the deed of sale to respondentThe contract between the Eniceo heirs and respondent executed on 10 September 1973 was a perfected contract of sale. A contract is perfected once there is consent of the contracting parties on the object certain and on the cause of the obligation.[39]In the present case, the object of the sale is the Antipolo property and the price certain isP250,000.The contract of sale has also been consummated because the vendors and vendee have performed their respective obligations under the contract. In a contract of sale, the seller obligates himself to transfer the ownership of the determinate thing sold, and to deliver the same to the buyer, who obligates himself to pay a price certain to the seller.[40]The execution of the notarized deed of sale and the delivery of the owners duplicate copy of OCT No. 535 to respondent is tantamount to a constructive delivery of the object of the sale. InNavera v. Court of Appeals, the Court ruled that since the sale was made in a public instrument, it was clearly tantamount to a delivery of the land resulting in the symbolic possession thereof being transferred to the buyer.[41]Petitioner alleges that the deed of sale is a forgery. The Eniceo heirs also claimed in their answer that the deed of sale is fake and spurious.[42]However, as correctly held by the CA, forgery can never be presumed. The party alleging forgery is mandated to prove it with clear and convincing evidence.[43]Whoever alleges forgery has the burden of proving it. In this case, petitioner and the Eniceo heirs failed to discharge this burden.Petitioner invokes the belated approval by the DENR Secretary, made within 25 years from the issuance of the homestead, to nullify the sale of the Antipolo property. The sale of the Antipolo property cannot be annulled on the ground that the DENR Secretary gave his approval after 21 years from the date the deed of sale in favor of respondent was executed. Section 118 of Commonwealth Act No. 141 or the Public Land Act (CA 141), as amended by Commonwealth Act No. 456,[44]reads:SEC. 118. EXCEPT IN FAVOR OF THE GOVERNMENT OR ANY OF ITS BRANCHES, UNITS, OR INSTITUTIONS, OR LEGALLY CONSTITUTED BANKING CORPORATIONS, LANDS ACQUIRED UNDER FREE PATENT OR HOMESTEAD PROVISIONS SHALL NOT BE SUBJECT TO ENCUMBRANCE OR ALIENATION FROM THE DATE OF THE APPROVAL OF THE APPLICATION AND FOR A TERM OF FIVE YEARS FROM AND AFTER THE DATE OF THE ISSUANCE OF THE PATENT OR GRANT X X XNo alienation, transfer, or conveyance of any homestead after five years and before twenty-five years after the issuance of title shall be valid without the approval of the Secretary of Agriculture and Natural Resources,[45]which approval shall not be denied except on constitutional and legal grounds.InSpouses Alfredo v. Spouses Borras,[46]the Court explained the implications of Section 118 of CA 141. Thus:A grantee or homesteader is prohibited from alienating to a private individual a land grant within five years from the time that the patent or grant is issued. A violation of this prohibition renders a sale void. This, however, expires on the fifth year. From then on until the next 20 years, the land grant may be alienated provided the Secretary of Agriculture and Natural Resources approves the alienation. The Secretary is required to approve the alienation unless there are constitutional and legal grounds to deny the approval. In this case, there are no apparent or legal grounds for the Secretary to disapprove the sale of the Subject Land.The failure to secure the approval of the Secretary does notipso factomake a sale void. The absence of approval by the Secretary does nota sale made after the expiration of the 5-year period, for in such event the requirement of Section 118 of the Public Land Act becomes merely directory or a formality.The approval may be secured later, producing the effect of ratifying and adopting the transaction as if the sale had been previously authorized.(Underscoring supplied)Equitable MortgagePetitioner contends that the deed of sale in favor of respondent is an equitable mortgage because the Eniceo heirs remained in possession of the Antipolo property despite the execution of the deed of sale.An equitable mortgage is one which although lacking in some formality, or form or words, or other requisites demanded by a statute, nevertheless reveals the intention of the parties to charge real property as security for a debt, and contains nothing impossible or contrary to law.[47]The essential requisites of an equitable mortgage are:1.The parties entered into a contract denominated as a contract of sale; and2. Their intention was to secure existing debt by way of a mortgage.[48]InLim v. Calaguas,[49]the Court held that in order for the presumption of equitable mortgage to apply, there must be: (1) something in the language of the contract; or (2) in the conduct of the parties which shows clearly and beyond doubt that they intended the contract to be a mortgage and not apacto de retrosale.[50]Proof by parol evidence should be presented in court. Parol evidence is admissible to support the allegation that an instrument in writing, purporting on its face to transfer the absolute title to property, was in truth and in fact given merely as security for the payment of a loan.The presumption of equitable mortgage under Article 1602 of the Civil Code is not conclusive. It may be rebutted by competent and satisfactory proof of the contrary.[51]Petitioner claims that an equitable mortgage can be presumed because the Eniceo heirs remained in possession of the Antipolo property. Apart from the fact that the Eniceo heirs remained in possession of the Antipolo property, petitioner has failed to substantiate its claim that the contract of sale wasintended to secure an existing debt by way of mortgage. In fact, mere tolerated possession is not enough to prove that the transaction was an equitable mortgage.[52]Furthermore, petitioner has not shown any proof that the Eniceo heirs were indebted to respondent. On the contrary, the deed of sale executed in favor of respondent was drafted clearly to convey that the Eniceo heirs sold and transferred the Antipolo property to respondent. The deed of sale even inserted a provision about defrayment of registration expenses to effect the transfer of title to respondent.In any event, as pointed out by respondent in his Memorandum, this defense of equitable mortgage is available only to petitioners predecessors-in-interest who should have demanded, but did not, for the reformation of the deed of sale.[53]A perusal of the records shows that the Eniceo heirs never presented the defense of equitable mortgage before the trial court.In their Answer[54]and Memorandum[55]filed before the trial court, the Eniceo heirs claimed that the alleged deed of sale dated 10 September 1973 between Rufina Eniceo and Maria Eniceo was fake and spurious. The Eniceo heirs contended that even assuming there was a contract, no consideration was involved. It was only in the Appellees Brief[56]filed before the CA that the Eniceo heirs claimed as an alternative defense that the deed should be presumed as an equitable mortgage.INPHILIPPINE PORTS AUTHORITY V. CITY OF ILOILO,[57]WE RULED THATA PARTY WHO ADOPTS A CERTAIN THEORY UPON WHICH THE CASE IS TRIED AND DECIDED BY THE LOWER COURT WILL NOT BE PERMITTED TO CHANGE THE THEORY ON APPEAL. A THEORY OF THE CASE NOT BROUGHT TO THE ATTENTION OF THE LOWER COURT WILL NOT BE CONSIDERED BY A REVIEWING COURT, AS A NEW THEORY CANNOT BE RAISED FOR THE FIRST TIME AT SUCH LATE STAGE.ALTHOUGH PETITIONER RAISED THE DEFENSE OF EQUITABLE MORTGAGE IN THE LOWER COURT, HE CANNOT CLAIM THAT THE DEED WAS AN EQUITABLE MORTGAGE BECAUSE PETITIONER WAS NOT A PRIVY TO THE DEED OF SALE DATED 10 SEPTEMBER 1973. PETITIONER MERELY STEPPED INTO THE SHOES OF THE ENICEO HEIRS.PETITIONER, WHO MERELY ACQUIRED ALL THE RIGHTS OF ITS PREDECESSORS, CANNOT ESPOUSE A THEORY THAT IS CONTRARY TO THE THEORY OF THE CASE CLAIMED BY THE ENICEO HEIRS.The Court notes that the Eniceo heirs have not appealed the CAs decision, hence, as to the Eniceo heirs, the CAs decision that the contract was a sale and not an equitable mortgage is now final. Since petitioner merely assumed the rights of the Eniceo heirs, petitioner is now estopped from questioning the deed of sale dated 10 September 1973.Petitioner is not a buyer in good faithPetitioner maintains that the subsequent sale must be upheld because petitioner is a buyer in good faith, having exercised due diligence by inspecting the property and the title sometime in February 1995.InAgricultural and Home Extension Development Group v. Court of Appeals,[58]a buyer in good faith is defined as one who buys the property of another without notice that some other person has a right to or interest in such property and pays a full and fair price for the same at the time of such purchase or before he has notice of the claim or interest of some other person in the property.InBalatbat v. Court of Appeals,[59]the Court held that in the realm of double sales, the registration of an adverse claim places any subsequent buyer of the registered land in bad faith because such annotation was made in the title of the property before the Register of Deeds and he could havediscovered that the subject property was already sold.[60]The Court explained further, thus:A purchaser of a valued piece of property cannot just close his eyes to facts which should put a reasonable man upon his guard and then claim that he acted in good faith and under the belief that there were no defect in the title of the vendor. One who purchases real estate with knowledge of a defect or lack of title in his vendor cannot claim that he has acquired title thereto in good faith as against the true owner of the land or of an interest therein; and the same rule must be applied to one who has knowledge of facts which should have put him upon such inquiry and investigation asbe necessary to acquaint him with the defects in the title of his vendor.[61]Petitioner does not dispute that respondent registered his adverse claim with the Registry of Deeds on 14 March 1995. The registration of the adverse claim constituted, by operation of law, notice to the whole world.[62]From that date onwards, subsequent buyers were deemed to have constructive notice of respondents adverse claim.PETITIONER PURCHASED THE ANTIPOLO PROPERTY ONLY ON 20 MARCH 1995 AND 5 APRIL 1995 AS SHOWN BY THE DATES IN THE DEEDS OF SALE. ON THE SAME DATES, THE REGISTRY OF DEEDS ISSUED NEW TCTS IN FAVOR OF PETITIONER WITH THE ANNOTATED ADVERSE CLAIM.CONSEQUENTLY, THE ADVERSE CLAIM REGISTERED PRIOR TO THE SECOND SALE CHARGED PETITIONER WITH CONSTRUCTIVE NOTICE OF THE DEFECT IN THE TITLE OF ENICEO HEIRS. THEREFORE, PETITIONER CANNOT BE DEEMED AS A PURCHASER IN GOOD FAITH WHEN THEY BOUGHT AND REGISTERED THE ANTIPOLO PROPERTY.INCARBONELL V. COURT OF APPEALS,[63]THIS COURT RULED THAT IN DOUBLE SALES, THE FIRST BUYER ALWAYS HAS PRIORITY RIGHTS OVER SUBSEQUENT BUYERS OF THE SAME PROPERTY. BEING THE FIRST BUYER, HE IS NECESSARILY IN GOOD FAITH COMPARED TO SUBSEQUENT BUYERS.THE GOOD FAITH OF THE FIRST BUYER REMAINS ALL THROUGHOUT DESPITE HIS SUBSEQUENT ACQUISITION OF KNOWLEDGE OF THE SUBSEQUENT SALE. ON THE OTHER HAND, THE SUBSEQUENT BUYER, WHO MAY HAVE ENTERED INTO A CONTRACT OF SALE IN GOOD FAITH, WOULD BECOME A BUYER IN BAD FAITH BY HIS SUBSEQUENT ACQUISITION OF ACTUAL OR CONSTRUCTIVE KNOWLEDGE OF THE FIRST SALE.[64]THE SEPARATE OPINION OF THEN JUSTICE TEEHANKEE IS INSTRUCTIVE, THUS:The governing principle here isprius tempore, potior jure(first in time, stronger in right). Knowledge gained by the first buyer of the second sale cannot defeat the first buyers rights except only as provided by theCode and that is where the second buyer first registers in good faith the second sale ahead of the first. Such knowledge of the first buyer does bar her from availing of her rights under the law, among them, to first her purchase as against the second buyer. But in converso knowledge gained by the second buyer of the first sale defeats his rights even if he is first to register the second sale, since such knowledge taints his prior registration with bad faith.This is the price exacted by Article 1544 of the Civil Code for the second buyer being able to displace the first buyer: that before the second buyer can obtain priority over the first, he must show that he acted in good faith throughout (i.e., in ignorance of the first sale and of the first buyers rights) from the time of acquisition until the title is transferred to him by registration or failing registration, by delivery of possession. The second buyer must show continuing good faith and innocence or lack of knowledge of the first sale until his contract ripens into full ownership through prior registration as provided by law.[65]LachesPETITIONER CONTENDS THAT RESPONDENT IS GUILTY OF LACHES BECAUSE HE SLEPT ON HIS RIGHTS BY FAILING TO REGISTER THE SALE OF THE ANTIPOLO PROPERTY AT THE EARLIEST POSSIBLE TIME. PETITIONER CLAIMS THAT DESPITE RESPONDENTS KNOWLEDGE OF THE SUBSEQUENT SALE IN 1991, RESPONDENT STILL FAILED TO HAVE THE DEED OF SALE REGISTERED WITH THE REGISTRY OF DEEDS.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 have been done earlier, thus giving rise to a presumption that the party entitled to assert it had either abandoned or declined to assert it.[66]Respondent discovered in 1991 that a new owners copy of OCTNo. 535 was issued to the Eniceo heirs. Respondent filed a criminal case against the Eniceo heirs for false testimony. When respondent learned that the Eniceo heirs were planning to sell the Antipolo property, respondent caused the annotation of an adverse claim. On 16 January 1996, when respondent learned that OCT No. 535 was cancelled and new TCTs were issued, respondent filed a civil complaint with the trial court against the Eniceo heirs and petitioner. Respondents actions negate petitioners argument that respondent is guilty of laches.True, unrecorded sales of land brought under Presidential DecreeNo. 1529 or the Property Registration Decree (PD 1529) are effective between and binding only upon the immediate parties. The registration required in Section 51 of PD 1529 is intended to protect innocent third persons, that is, persons who, without knowledge of the sale and in good faith, acquire rights to the property.[67]Petitioner, however, is not an innocent purchaser for value.WHEREFORE, weDENYthe petition. WeAFFIRMthe 20 December 2004 Decision and 10 October 2005 Resolution of the Court of Appeals in CA-G.R. CV No. 68828.SO ORDERED.Republic of the PhilippinesSUPREME COURTManilaSECOND DIVISIONG.R. No. 171531 January 30, 2009GUARANTEED HOMES, INC.,Petitioner,vs.HEIRS OF MARIA P. VALDEZ, (EMILIA V. YUMUL and VICTORIA V. MOLINO), HEIRS OF SEVERINA P. TUGADE (ILUMINADA and LEONORA P. TUGADE, HEIRS OF ETANG P. GATMIN (LUDIVINA G. DELA CRUZ (by and through ALFONSO G. DELA CRUZ), HILARIA G. COBERO and ALFREDO G. COBERO) and SIONY G. TEPOL (by and through ELENA T. RIVAS and ELESIO TEPOL, JR.), AS HEIRS OF DECEDENT PABLO PASCUA,Respondents.D E C I S I O NTinga,J.:This is a petition for review1under Rule 45 of the Rules of Court of the Court of Appeals Decision dated 22 March 20052and Resolution dated 9 February 20063in CA-G.R. CV No. 67462. The Court of Appeals reversed the 12 November 1999 Order of the Regional Trial Court (RTC) of Olongapo City, Branch 734which granted the motion to dismiss filed by Guaranteed Homes, Inc. (petitioner). The appellate court denied petitioners motion for reconsideration.The factual antecedents are as follows:Respondents, who are the descendants of Pablo Pascua (Pablo), filed a complaint seeking reconveyance of a parcel of land with an area of 23.7229 hectares situated in Cabitaugan, Subic, Zambales and covered by Original Certificate of Title (OCT) No. 404 in the name of Pablo.5In the alternative, the respondents prayed that damages be awarded in their favor.6OCT No. 4047was attached as one of the annexes of respondents complaint. It contained several annotations in the memorandum of encumbrances which showed that the property had already been sold by Pablo during his lifetime to Alejandria Marquinez and Restituto Morales. Respondents also attached copies of the following documents as integral parts of their complaint: Transfer Certificate of Title (TCT) No. T-8241,8TCT No. T-8242,9TCT No. T-10863,10the Extrajudicial Settlement of a Sole Heir and Confirmation of Sales11executed by Cipriano Pascua, Sr. (Cipriano), and the Deed of Sale with Mortgage12between spouses Albino Rodolfo and Fabia Rodolfo (spouses Rodolfo) and petitioner.In their complaint,13respondents alleged that Pablo died intestate sometime in June 1945 and was survived by his four children, one of whom was the deceased Cipriano.14On 13 February 1967, Cipriano executed a document denominated as "Extrajudicial Settlement of a Sole Heir and Confirmation of Sales,"15wherein he declared himself as the only heir of Pablo and confirmed the sales made by the decedent during his lifetime, including the alleged sale of the disputed property to spouses Rodolfo.Respondents likewise averred that on the following day 14 February 1967, TCT No. T-824116was issued in the name of Cipriano "without OCT No. 404 having been cancelled."17However, TCT No. T-8241 was not signed by the Register of Deeds. On the same day, TCT No. T-8242 was issued in the name of the spouses Rodolfo and TCT No. T-8241 was thereby cancelled.18Subsequently, on 31 October 1969, the spouses Rodolfo sold the disputed property to petitioner by virtue of a Deed of Sale with Mortgage. Consequently, on 5 November 1969, TCT No. T-8242 was cancelled and TCT No. T-1086319was issued in the name of petitioner.20It was further averred in the complaint that Jorge Pascua, Sr., son of Cipriano, filed on 24 January 1997 a petition before the RTC of Olongapo City, Branch 75, for the issuance of a new owners duplicate of OCT No. 404, docketed as Other Case No. 04-0-97.21The RTC denied the petition.22The trial court held that petitioner was already the owner of the land, noting that the failure to annotate the subsequent transfer of the property to it at the back of OCT No. 404 did not affect its title to the property.Petitioner filed a motion to dismiss23the complaint on the grounds that the action is barred by the Statute of Limitations, more than 28 years having elapsed from the issuance of TCT No. T-10863 up to the filing of the complaint, and that the complaint states no cause of action as it is an innocent purchaser for value, it having relied on the clean title of the spouses Rodolfo.Impleaded as defendants, the heirs of Cipriano filed an answer to the complaint in which they denied knowledge of the existence of the extrajudicial settlement allegedly executed by Cipriano and averred that the latter, during his lifetime, did not execute any document transferring ownership of the property.24The Register of Deeds and the National Treasurer filed, through the Office of the Solicitor General, an answer averring that the six (6)-year period fixed in Section 102 of Presidential Decree (P.D.) No. 1529 for the filing of an action against the Assurance Fund had long prescribed since the transfer of ownership over the property was registered through the issuance of TCT No. T-10863 in favor of petitioner as early as 1969. They also claimed that respondents have no cause of action against the Assurance Fund since they were not actually deprived of ownership over the property, as they could have recovered the property had it not been for their inaction for over 28 years.25The RTC granted petitioners motion to dismiss.26Noting that respondents had never claimed nor established that they have been in possession of the property and that they did not present any evidence to show that petitioner has not been in possession of the property either, the RTC applied the doctrine that an action to quiet title prescribes where the plaintiff is not in possession of the property.The trial court found that the complaint per its allegations presented a case of implied or constructive trust on the part of Cipriano who had inaccurately claimed to be the sole heir of Pablo in the deed of extrajudicial settlement of estate which led to the issuance of TCT No. T- 8241 in his favor. As the prescriptive period for reconveyance of a fraudulently registered real property is ten (10) years reckoned from the date of the issuance of the title, the trial court held that the action for reconveyance had already prescribed with the lapse of more than 28 years from the issuance of TCT No. T-10863 on 5 November 1969 as of the filing of the complaint on 21 November 1997.The RTC added that it is an enshrined rule that even a registered owner of property may be barred from recovering possession of property by virtue of laches.The RTC further held that petitioner had the right to rely on TCT No. T- 8242 in the name of spouses Rodolfo. Petitioner is not obliged to go beyond the title considering that there were no circumstances surrounding the sale sufficient to put it into inquiry.Concerning the Assurance Fund, the RTC held that the claim against it had long prescribed since Section 102 of P.D. No. 1529 provides for a six-year period within which a plaintiff may file an action against the fund and in this case the period should be counted from the time of the issuance of the challenged TCT No. T-10863 on 5 November 1969 and thus expired in 1975.Undaunted, respondents appealed to the Court of Appeals.27The Court of Appeals reversed the RTCs order.28In ordering the reinstatement of the complaint, the appellate court ruled that the averments in respondents complaint before the RTC make out a case for quieting of title which has not prescribed. Respondents did not have to prove possession over the property since petitioner as the movant in a motion to dismiss hypothetically admitted the truth of the allegations in the complaint. The appellate court found that possession over the property was sufficiently alleged in the complaint which stated that "neither petitioner nor the Rodolfo spouses ever had possession of the disputed property" as "a number of the Pascua heirs either had been (still are) in actual, continuous and adverse possession thereof or had been enjoying (still are enjoying) the use thereof."29By the same token, laches had not set in, the Court of Appeals added.The appellate court further held that the ruling of the RTC that petitioner is an innocent purchaser for value is contrary to the allegations in respondents complaint.Hence, the present petition for review.The sole issue before this Court revolves around the propriety of the RTCs granting of the motion to dismiss and conversely the tenability of the Court of Appeals reversal of the RTCs ruling.The petition is meritorious.It is well-settled that to sustain a dismissal on the ground that the complaint states no cause of action, the insufficiency of the cause of action must appear on the face of the complaint, and the test of the sufficiency of the facts alleged in the complaint to constitute a cause of action is whether or not, admitting the facts alleged, the court could render a valid judgment upon the same in accordance with the prayer of the complaint. For the purpose, the motion to dismiss must hypothetically admit the truth of the facts alleged in the complaint.30The admission, however, is limited only to all material and relevant facts which are well pleaded in the complaint.31The factual allegations in respondents complaint should be considered in tandem with the statements and inscriptions on the documents attached to it as annexes or integral parts. In a number of cases, the Court held that in addition to the complaint, other pleadings submitted by the parties should be considered in deciding whether or not the complaint should be dismissed for lack of cause of action.32Likewise, other facts not alleged in the complaint may be considered where the motion to dismiss was heard with the submission of evidence, or if documentary evidence admitted by stipulation discloses facts sufficient to defeat the claim.33For while the court must accept as true all well pleaded facts in the complaint, the motion does not admit allegations of which the court will take judicial notice are not true, nor does the rule apply to legally impossible facts, nor to facts inadmissible in evidence, nor to facts which appear by record or document included in the pleadings to be unfounded.34In the case at bar, the trial court conducted a hearing on the motion to dismiss. At the hearing, the parties presented documentary evidence. Among the documents marked and offered in evidence are the annexes of the complaint.35Based on the standards set by this Court in relation to the factual allegations and documentary annexes of the complaint as well as the exhibits offered at the hearing of the motion to dismiss, the inescapable conclusion is that respondents complaint does not state a cause of action against petitioner.Firstly, the complaint does not allege any defect with TCT No. T-8242 in the name of the spouses Rodolfo, who were petitioners predecessors-in-interest, or any circumstance from which it could reasonably be inferred that petitioner had any actual knowledge of facts that would impel it to make further inquiry into the title of the spouses Rodolfo.36It is basic that a person dealing with registered property need not go beyond, but only has to rely on, the title of his predecessor-in-interest. Since "the act of registration is the operative act to convey or affect the land insofar as third persons are concerned," it follows that where there is nothing in the certificate of title to indicate any cloud or vice in the ownership of the property, or any encumbrance thereon, the purchaser is not required to explore farther than what the Torrens title upon its face indicates in quest for any hidden defect or inchoate right that may subsequently defeat his right thereto. If the rule were otherwise, the efficacy and conclusiveness of the certificate of title which the Torrens system seeks to insure would entirely be futile and nugatory. The public shall then be denied of its foremost motivation for respecting and observing the Torrens system of registration. In the end, the business community stands to be inconvenienced and prejudiced immeasurably.37Contrary to the assertion of respondents, OCT No. 404 was expressly cancelled by TCT No. T-8241. The alleged non-signature by the Register of Deeds Soliman Achacoso, , does not affect the validity of TCT No. T-8241 since he signed TCT No. T- 8242 and issued both titles on the same day. There is a presumption of regularity in the performance of official duty. The presumption is further bolstered by the fact that TCT No. T-8241 was certified to be on file with the Registry of Deeds and registered in the name of Cipriano. It is enough that petitioner had examined the latest certificate of title which in this case was issued in the name of the immediate transferor, the spouses Rodolfo. The purchaser is not bound by the original certificate but only by the certificate of title of the person from whom he had purchased the property.38Secondly, while the Extrajudicial Settlement of a Sole Heir and Confirmation of Sales executed by Cipriano alone despite the existence of the other heirs of Pablo, is not binding on such other heirs, nevertheless, it has operative effect under Section 44 of the Property Registration Decree, which provides that:SEC. 44.Statutory Liens Affecting Title. Every registered owner receiving a certificate of title in pursuance of a decree of registration, and every subsequent purchaser of registered land taking a certificate of title for value and in good faith, shall hold the same free from all encumbrances except those noted on said certificate and any of the following encumbrances which may be subsisting, namely:x x x xEven assumingarguendothat the extrajudicial settlement was a forgery, the Court still has to uphold the title of petitioner. The case law is that although generally a forged or fraudulent deed is a nullity and conveys no title, there are instances when such a fraudulent document may become the root of a valid title.39And one such instance is where the certificate of title was already transferred from the name of the true owner to the forger, and while it remained that way, the land was subsequently sold to an innocent purchaser. For then, the vendee had the right to rely upon what appeared in the certificate.40The Court cannot give credence to respondents claims that the Extrajudicial Settlement of a Sole Heir and Confirmation of Sales was not registered and that OCT No. 404 was not cancelled by the Register of Deeds. The Register of Deeds of Zambales certified that the extrajudicial settlement was recorded on 14 February 1967, per Entry No. 18590. This is in compliance with Section 56 of Act No. 496,41the applicable law at the time of registration, which provides that:Sec. 56. Each register of deeds shall keep an entry book in which he shall enter in the order of their reception all deeds and other voluntary instruments, and all copies of writs and other process filed with him relating to registered land. He shall note in such book the year, month, day, hour, and minute of reception of all instruments, in the order in which they are received.They shall be regarded as registered from the time so noted, and the memorandum of each instrument when made on the certificate of title to which it refers shall bear the same date. [Emphasis supplied]Registration in the public registry is notice to the whole world. Every conveyance, mortgage, lease, lien, attachment, order, judgment, instrument or entry affecting registered land shall be, if registered, filed or entered in the Office of the Register of Deeds of the province or city where the land to which it relates lies, be constructive notice to all persons from the time of such registering, filing or entering.42Thirdly, respondents cannot make out a case for quieting of title since OCT No. 404 had already been cancelled. Respondents have no title to anchor their complaint on.43Title to real property refers to that upon which ownership is based. It is the evidence of the right of the owner or the extent of his interest, by which means he can maintain control and, as a rule, assert right to exclusive possession and enjoyment of the property.44Moreover, there is nothing in the complaint which specified that the respondents were in possession of the property. They merely alleged that the occupants or possessors are "others not defendant Spouses Rodolfo"45who could be anybody, and that the property is in actual possession of "a number of the Pascua heirs"46who could either be the respondents or the heirs of Cipriano. The admission of the truth of material and relevant facts well pleaded does not extend to render a demurrer an admission of inferences or conclusions drawn therefrom, even if alleged in the pleading; nor mere inferences or conclusions fromfacts not stated; nor conclusions of law; nor matters of evidence; norsurplusage and irrelevant matters.47The other heirs of Pablo should have filed an action for reconveyance based on implied or constructive trust within ten (10) years from the date of registration of the deed or the date of the issuance of the certificate of title over the property.48The legal relationship between Cipriano and the other heirs of Pablo is governed by Article 1456 of the Civil Code which provides that if a 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.From the above discussion, there is no question that petitioner is an innocent purchaser for value; hence, no cause of action for cancellation of title will lie against it.49The RTC was correct in granting petitioners motion to dismiss.Lastly, respondents claim against the Assurance Fund also cannot prosper. Section 101 of P.D. No. 1529 clearly provides that the Assurance Fund shall not be liable for any loss, damage or deprivation of any right or interest in land which may have been caused by a breach of trust, whether express, implied or constructive. Even assumingarguendothat they are entitled to claim against the Assurance Fund, the respondents claim has already prescribed since any action for compensation against the Assurance Fund must be brought within a period of six (6) years from the time the right to bring such action first occurred, which in this case was in 1967.WHEREFORE, the petition isGRANTED. The decision of the Court of Appeals in CA-G.R. CV No. 67462 isREVERSEDandSET ASIDE. The 12 November 1999 Order of the Regional Trial Court of Olongapo City, Branch 73 in Civil Case No. 432-097 isREINSTATED.SO ORDERED.DANTE O. TINGAAssociate JusticeWE CONCUR:LEONARDO A. QUISUMBINGActing Chief JusticeChairpersonRENATO C. CORONA*Associate JusticeCONCHITA CARPIO MORALESAssociate Justice

ARTURO D. BRIONAssociate JusticeC E R T I F I C A T I O NPursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.LEONARDO A. QUISUMBINGActingChief JusticeTHIRD DIVISIONJOSE T. ABAD,G.R. No. 157002Petitioner,Present: Panganiban,J., Chairman, - versus - Sandoval-Gutierrez, Corona,* Carpio Morales, and Garcia,JJSpouses CEASAR Promulgated:and VIVIAN GUIMBA, Respondents. July 29, 2005x -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- xDECISIONPANGANIBAN,J.:O

nly questions of law may be brought before and ruled upon by the Supreme Court in petitions for review under Rule 45 of the Rules of Court. This principle holds true, particularly for regional trial court decisions brought directly to this Court. If a __________________* On official leave.review of factual questions is sought, the petition should be elevated to the Court of Appeals. For failing to observe this basic doctrine, herein petitioner should not expect this Court to pass upon the question of whether he was a mortgagee in good faith and for value. This factual question was already ruled upon by the trial court, whose findings are thus deemed conclusive and binding on the present proceedings.The Case Before us is a Petition for Review[1]under Rule 45 of the Rules of Court, assailing the November 19, 2002 Decision[2]of the Regional Trial Court (RTC) of Pasig City (Branch 167) in Civil Case No. 67131, as well as its January 24, 2003 Resolution[3]denying petitioners Motion for Reconsideration. The assailed Decision disposed thus:WHEREFORE,judgment is hereby rendered in favor of the [respondents] and against [Petitioner] Jose T. Abad as follows:a) Declaring as null and void and of no legal force and effect the Deed of Mortgage of Real Properties, Exhibit B and 5, respectively, registered and annotated on Transfer Certificate of Title No. PT-80617 of the Register of Deeds for Pasig City as Entry No. PT-9633/PT-80617 inscribed on 10 June 1997;b) Ordering the Register of Deeds of Pasig City to cancel entry No. PT-9633/PT-80617 annotated on Transfer Certificate of Title No. PT-80617;c) Ordering the [Petitioner] Jose T. Abad to return to [respondents] Transfer Certificate of Title No. PT-80617 of the Registry of Dee[d]s of Pasig City;d) Ordering the [Petitioner] Jose T. Abad to pay [respondent] the amount of Php 20,000.00, as and for reasonable attorneys fees; ande) To pay the costs.For lack of sufficient factual and legal basis, the counterclaim of [Petitioner] Jose T. Abad against the [respondent] as well as his cross-claim against the defaulting defendant[s] Gemma Dela Cruz are, as they should be, DENIED.[4]The Facts Respondent-Spouses Ceasar and Vivian Guimba are the registered owners of a parcel of land covered by Transfer Certificate of Title (TCT) No. PT- 80617.On March 7, 1997, Vivian entrusted her copy of the Owners Duplicate Certificate of Title to Gemma de la Cruz to serve as collateral for Vivians application for a loan that was to be released in four days. Afterwards, Gemma received a phone callfrom Vivian, who informed her that she had changed her mind, was no longer interested in obtaining the loan, and therefore wanted her TCT back. Told that the Certificate had been deposited in the vault of the Bank of South East Asia, Vivian inquired at the bank, but was advised that the TCT was not there.[5]In November 1997, Vivian received a telegram from Petitioner Abad, a stranger, reminding her of the impending maturity of her mortgage. It was the first time respondents learned of any actual mortgage involving their property.[6] After seeking legal advice,[7]they filed an adverse claim on their own title[8]and for the first time met with petitioner to settle the matter.[9] While he insisted that they settle the mortgage,[10]they manifested their intention to sue.[11]Accordingly, respondents filed with the Regional Trial Court of Pasig City (assigned to Branch 167) on November 18, 1998, a Complaint[12]against petitioner and Gemma de la Cruz forannulment and cancellation of mortgage. They likewise filed with the Metropolitan Trial Court of Pasig City (assigned to Branch 71) a criminal case against her for falsification of public document.[13] In his Answer, petitioner countered that respondents had connived with De la Cruz to swindle him of his hard-earned savings.[14]He testified that he had met her and a couple posing as the Guimba spouses (Guimbas) for the first time in March 1997.[15] The Guimbas allegedly asked him for a loan and presented their duplicate copy of TCT No. PT-80617 as collateral. He claimed that he accepted the mortgage only after verifying the authenticity of the Certificate with the Register of Deeds.[16] During the trial, petitioner admitted that the couple to whom he had given the loan ofP335,000 were not herein respondents, whom he met only in December 1997 to discuss the matter of the telegram.[17]The principal issue presented before the trial court was whether Abad was a mortgagee for value and in good faith. The RTC opined that this question was determinative of the validity of the Deed of Mortgage.Ruling of the Regional Trial CourtAssessing the evidence, the trial court found the testimonies offered by petitioner to be conflicting and concocted. It determined that he had never met a couple posing as respondent spouses. Rather, he had dealt solely with De la Cruz over a property that manifestly belonged to the Guimba spouses.[18] By entering into the mortgage without making the necessary inquiries as to the identity and the authority of the person he was dealing with, he could not be considered a mortgagee in good faith and for value.[19] Having determined that respondents, as registered owners, had never executed the Deed of Mortgage in favor of petitioner, the trial court held that the instrument was a forgery and, hence, an absolute nullity. Consequently, it ordered the cancellation of the annotation on the TCT of respondents. As for petitioners defense of laches, the lower court ruled that Vivian Guimba could not be belabored for negligence, considering that she had taken the necessary steps to recover her title from De la Cruz.[20] Unsubstantiated by evidence, petitioners claim of connivance and conspiracy between respondents and De la Cruz was dismissed by the RTC.[21]Denying the Motion for Reconsideration filed by petitioner, the trial court ruled that although the Certificate was admittedly clean on its face, he was not a mortgagee in good faith, because he had not made the necessary inquiries about the true identity of the persons introduced as owners of the subject property. Moreover, he had not presented convincing proof of the negotiation and execution of the mortgage Contract.[22]Skipping the Court of Appeals, petitioner lodged his Petition for Review directly with this Court.[23]Issues Petitioner raises the following issues in his Memorandum:1. Given the state of facts in the above-entitled case, will the PROPERTY REGISTRATION DECREE, (P.D. 1529) particularly Chapter V, Sections 52 and 53 thereof be totally ignored and overlooked, considering the fact that the [p]etitioner, who was an innocent third person and holder for value relied on the strength of the a (sic) CLEAN title prior to the execution of the Real Estate Mortgage Contract?2. Will not an innocent holder for value of an original Owners Duplicate Copy of a Transfer Certificate of Title who caused the registration of the Real Estate Mortgage Contract SIX MONTHS prior to the recording or registration of an Affidavit of Adverse Claim executed by the registered owner of a parcel of land be not protected by P.D. 1529?3. WILL (sic) LACHES not apply in the case at bar against the [r]espondents considering their inaction for more than NINE MONTHS prior to the execution and recording of an Affidavit of Adverse Claim over their title, which has unfortunately found its way to an innocent third person and holder for value?[24]The Courts Ruling The Petition has no merit.First and Second Issues:Applicability of PD 1529Petitioner insists on the application of Sections 52[25]and 53[26]of PD 1529 to protect his interest as aninnocentholder for value. Whether he is, indeed, is at the outset the most crucial question to be resolved in this case.Only Questions of Law Raised in a Rule 45 PetitionPreliminarily, we should stress that the remedy of appeal by certiorari under Rule 45 of the Rules of Court contemplates only questions of law, not of fact.[27] Therefore, a party who files a Rule 45 petition waives the opportunity to inquire into the findings of fact of the lower court.A question of law exists when there is doubt or controversy as to what the law is on a certain state of facts. There is a question of fact when doubt arises as to the truth or falsity of the statement of facts.[28] The resolution of a question of fact necessarily involves a calibration of the evidence, the credibility of the witnesses, the existence and the relevance of surrounding circumstances, and the probability of specific situations. It is for this reason that this Court defers to the factual findings of a trial judge, who has had the distinct advantage of directly observing the witnesses on the stand and determining from their demeanor whether they were speaking or distorting the truth.[29]Coming to the present case, the paramount question regarding the good faith of petitioner is obviously one of fact[30]on which the RTC already had the following findings:All told, as mortgagee of a real property, [Petitioner] Abadneglectedto make the necessary inquiries and closed his eyes to facts which should put a reasonable man on guard as to the value of the property being presented as collateral and of any flaw in the title of the mortgagor and of the identity of persons being introduced to him as the owners of the property being mortgaged. By merely relying on his belief that there was no defect in the title of the property being presented as collateral and on the identity of the prospective mortgagors being introduced to him without undertaking further investigation, [Petitioner] Abadcannotbe considered a mortgagee in good faith and for value.[31][Emphasis supplied]If petitioner wanted to assail the correctness of these findings of fact, he should have brought his appeal before the Court of Appeals. He shot himself in the foot, so to speak, by resorting to the wrong remedy and filing his petition in the wrong forum. By his error, or by his deliberate choice of remedy and forum, he must now accept the consequences: the conclusiveness of the factual finding of the trial court that he was a mortgagee in bad faith.A Mortgagee in Bad Faith Not Protectedby PD 1529 The main purpose of land registration, covered by PD 1529, is to facilitate transactions relative to real estate by giving the public the right to rely upon the face of the Torrens certificate of title.[32] Therefore, as a rule, the purchaser is not required to explore further than what the Certificate indicates on its face. This rule, however, appliesonlytoinnocent purchasers for value and in good faith; it excludes a purchaser who has knowledge of a defect in the title of the vendor, or of facts sufficient to induce a reasonably prudent man to inquire into the status of the property.[33] Under Section 32 of PD 1529,[34]an innocent purchaser for value is deemed to include an innocent mortgagee for value. By insisting on the application of PD 1529 in his favor, petitioner begs the question. He invokes Sections 52 and 53 of the law, which protectsinnocentmortgagees for value, but which the RTC has already determined he wasnot. As already discussed, such factual determination by the trial court is conclusive, because he did not question it in the proper forum. The logical consequence, therefore, is the inapplicability of the said law to his factual situation.To be sure, there are exceptions to the rule.[35] Petitioner, however, has not given us adequate reasons to apply any of these exceptions; verily, we find no ground to reverse or modify the factual findings of the RTC.RTC Decision Consistent With Jurisprudence Upon the other hand, the RTCs legal conclusions are in accordance with jurisprudence. A person who deals with registered land through someone who isnotthe registered owner is expected to look behind the certificate of title and examineallfactual circumstances, in order to determine if the mortgagor/vendee has the capacity to transfer any interest in the land.[36] One has the duty to ascertain the identity of the person with whom one is dealing, as well as the latters legal authority to convey.The law requires a higher degree of prudence from one who buys from a person who is not the registered owner, although the land object of the transaction is registered. While one who buys from the registered owner does not need to look behind the certificate of title, one who buys from one who isnotthe registered owner is expected to examine not only the certificate of title butallfactual circumstances necessary for [one] to determine if there are any flaws in the title of the transferor, or in [the] capacity to transfer the land.[37] Although the instant case does not involve a sale but only a mortgage, the same rule applies inasmuch as the law itself includes a mortgagee in the term purchaser.[38] Petitioners contention of due diligence and good faith in verifying the authenticity of the Transfer Certificate of Title and finding it clean on its face[39]is beside the point. He was not a mortgagee in good faith, not because he neglected to ascertain the authenticity of the title, but because he did not check if the person he was dealing with had any authority to mortgage the property. There is no allegation whatsoever that Gemma de la Cruz presented a special power of attorney to deal with the property of the Guimbas; and even if we accept the story of petitioner that he was duped by a woman posing as Vivian Guimba, his negligence lies in not verifying her identity before accepting the mortgage.[40]Third Issue:LachesPetitioner likewise contends that respondents were guilty of laches when they neglected to register their adverse claimimmediately. Again, he attempts to attack the RTCs factual determination that they had taken the necessary steps to protect their rights.[41] Seeking its review, he resorted to the wrong remedy in the wrong forum. We repeat, petitions under Rule 45 are limited to the determination of pure questions of law.In any case, petitioners theory that respondents are guilty of laches for belatedly registering an adverse claim is untenable.First, the law does not compel them to file an adverse claim. The purpose of that claim is to give notice to third persons of the existence of an interestadverseto that of the registered owner.[42]In the instant case, respondentsarethe registered owners. The fact that their names appear on the title as absolute owners should already notify third persons, such as petitioner, that they have a clear legal interest in the property.Second, there is no equitable basis for the application of laches, considering that (1) only nine months had elapsed from the loss of the title to the registration of an adverse claim, (2) no prejudice was caused an innocent purchaser for value, and (3) there was a factual determination by the trial court that respondents had taken the appropriate steps to protect their interests.Third, even if we assumearguendothat respondents were negligent, petitioner still cannot claim a superior right, considering that he too was negligent; he cannot feign innocence as regards their existing interests as the registered owners. Simply put, their alleged negligence did not prejudice petitioner, who was perfectly aware all the time that the property belonged to them, not to De la Cruz.Laches is a doctrine in equity and may not be invoked to resist the enforcement of a legal right.[43] Thus, the assertion of laches to thwart the claim of respondents is foreclosed by the finding that petitioner, as a mortgagee in bad faith, is not entitled to the protection of our registration laws. WHEREFORE, the Petition is herebyDENIEDand the assailed Decision and ResolutionAFFIRMED. Costs against petitioner. SO ORDERED.public of the PhilippinesSUPREME COURTManilaTHIRD DIVISIONG.R. No. 81163 September 26, 1988EDUARDO S. BARANDA and ALFONSO HITALIA,petitioners,vs.HONORABLE JUDGE TITO GUSTILO, ACTING REGISTER OF DEEDS AVITO SACLAUSO, HONORABLE COURT OF APPEALS, and