Dadizon vs. Court of Appeals

An instrument conveying unregistered land must be recorded in the Registry of Deeds to bind third persons; the mere execution of an unnotarized and unregistered deed of sale is valid only between the parties and does not affect those who are not privy to it. An appeal from an RTC decision rendered in the exercise of its appellate jurisdiction must be taken by petition for review under Rule 42; a notice of appeal is improper and shall be dismissed.

The Mocorros purchased a 224-square meter residential lot in Naval, Biliran in 1973 from Brigido Caneja, Sr. They possessed the property, obtained tax declarations consistently describing the area as 224 square meters, and even constituted a mortgage over the entire area in favor of the Rural Bank of Naval in 1975. In 1984, the tax declaration area was reduced to 146 square meters, with the western boundary now described as Cadastral Lot No. 523 belonging to the Dadizons. The Dadizons had secured their first tax declaration only in 1980, covering 147 square meters, and claimed ownership of an adjacent 78-square meter portion through an unbroken chain of unregistered conveyances originating from Ignacia Bernal. The Mocorros sued to recover the 78-square meter portion and to cancel the Dadizons’ tax declaration.

• The Mocorros’ Chain of Title: Ignacia Bernal owned a large tract of 3,231 square meters declared under Tax Declaration No. 504. On December 30, 1946, Bernal sold a 364-square meter portion to Almeda Elaba. Tax Declaration No. 1551 was issued in Elaba’s name but covered only 224 square meters. On May 29, 1971, Elaba sold the 224-square meter area to Brigido Caneja, Sr., resulting in Tax Declaration No. 4301 in Caneja’s name. On June 2, 1973, Caneja, Sr. sold the entire 224-square meter lot to respondent spouses Dominador and Elsa Mocorro. Tax Declaration No. 4518 was then issued in Dominador Mocorro’s name, later replaced by Tax Declaration No. 3478 covering the same 224 square meters. Tax Declaration No. 3478 bore an annotation of a mortgage constituted by the Mocorros in favor of the Rural Bank of Naval on July 23, 1975.

• Reduction of the Mocorros’ Holding and the Dadizons’ Emergence: In 1984, Tax Declaration No. 607 was issued to the Mocorros, reflecting a reduction of the area from 224 square meters to 146 square meters, with the western boundary now described as Cadastral Lot No. 523, Assessor’s Lot No. 049, owned by the Dadizons. The Dadizons’ first tax declaration, Tax Declaration No. 535 in the name of Felicidad Dadizon, was issued only in 1980 and covered 147 square meters. It described the eastern boundary as the Mocorros’ property (Cadastral Lot No. 524). The dorsal side of that declaration contained a note stating that the previous tax declaration was “unidentified” and “subject for further verification,” and that the lot “has no previous tax declaration and or assessed as ‘NEW’ under the Tax Mapping revision.”

• The Dadizons’ Claimed Source of Title: The Dadizons asserted ownership of the disputed 78-square meter portion through a series of unregistered conveyances from Ignacia Bernal. According to them, Bernal sold 364 square meters to Elaba in 1946; Elaba conveyed a 7x13-meter portion (91 sq m) to Donato Cabalquinto in 1952 and a 6x13-meter portion (78 sq m) to Floselfina Elaba in 1953; Floselfina sold the 78-square meter portion to Eustaquia Bernadas (Felicidad Dadizon’s mother) in 1954; Cabalquinto and Elaba transferred the 91-square meter lot and confirmed the 78-square meter sale to Bernadas in a deed dated May 3, 1954. Bernadas purportedly sold the consolidated 169-square meter property to the Dadizons on March 10, 1976 through an unnotarized “Deed of Absolute Sale of Real Property.” The Dadizons also presented an affidavit of adjoining owners executed to facilitate a housing loan application.

• Findings of the Trial Courts: The MTC found that the 78-square meter portion was part of the land sold to the Mocorros; that the Dadizons’ claimed acquisition was “feigned” to make documents appear older; and that Dominador Mocorro had been misled by Eustaquia Bernadas into fencing an incorrect boundary in the absence of Elsa Mocorro. The RTC, exercising appellate jurisdiction, affirmed these factual findings in their entirety, holding that no overlooked fact or circumstance would change the outcome.

• Mode of Appeal: Petitioners maintained that the Court of Appeals should have given due course to their appeal and not dismissed it on technical grounds, invoking the policy of liberal construction of procedural rules.

• Ownership: Petitioners argued that their chain of title, traced to Ignacia Bernal and culminating in the deed of absolute sale from Eustaquia Bernadas, established a superior right to the 78-square meter portion. They relied on the unnotarized deed of sale, the affidavit of adjoining owners, and their continuous possession and construction of a house on the land to support their claim.

• Mode of Appeal: Respondents countered that the Dadizons’ appeal by notice of appeal was improper because the RTC decision was rendered in the exercise of its appellate jurisdiction, thereby requiring a petition for review under Rule 42. They insisted that the erroneous mode warranted outright dismissal.

• Ownership: Respondents asserted a better right based on their unbroken chain of tax declarations consistently covering 224 square meters, their prior possession since 1973, and the mortgage they constituted over the entire area. They contended that the Dadizons’ unregistered and unnotarized deed of sale could not bind them as third parties.

• Mode of Appeal: Whether the Court of Appeals correctly dismissed the Dadizons’ appeal for having been taken via notice of appeal instead of a petition for review under Rule 42.

• Ownership of the Disputed Land: Whether the Mocorros established a better right to the 78-square meter portion such that the Dadizons’ appeal would fail even if it were given due course.

• Mode of Appeal: The dismissal was proper. The RTC decision was rendered in the exercise of its appellate jurisdiction; therefore, the correct mode of appeal to the Court of Appeals was a petition for review under Rule 42, not an ordinary appeal by notice of appeal under Rule 41. Section 2, Rule 50 of the Rules of Court expressly provides that an appeal by notice of appeal from the appellate judgment of a Regional Trial Court shall be dismissed. The error was not curable by liberal construction under Section 6, Rule 1, because the rules on the manner and period of appeal are mandatory and jurisdictional. The policy announced in Murillo v. Consul, which became the basis for Section 2 of Rule 41, strictly prohibits misdirected or erroneous appeals and requires dismissal as the only recourse.

• Ownership of the Disputed Land: Even had the appeal been entertained, the Mocorros would still prevail. The unanimous factual findings of the MTC and the RTC—that the 78-square meter portion was part of the 224-square meter property acquired by the Mocorros, and that the Dadizons’ claimed acquisition was feigned—were supported by the evidence and thus binding on the Supreme Court. The Mocorros demonstrated continuous possession and consistent tax declarations, including the annotation of a mortgage over the entire 224 square meters. In contrast, the Dadizons’ claim rested on an unnotarized and unregistered deed of absolute sale executed by Eustaquia Bernadas. Under Section 113 of Presidential Decree No. 1529, no instrument affecting unregistered land is valid against third persons unless recorded in the Registry of Deeds. The deed was therefore binding only between the parties thereto, not upon the Mocorros, who were strangers to that transaction. Moreover, the deed was res inter alios acta as to the Mocorros and could not prejudice their rights.

• Registration as the Operative Act for Unregistered Land — Under Section 113 of Presidential Decree No. 1529, a deed, conveyance, mortgage, lease, or other voluntary instrument affecting land not registered under the Torrens system is valid only between the parties unless recorded in the office of the Register of Deeds. Registration is the operative act that conveys or affects the land insofar as third persons are concerned. Applied here, Bernadas’ unnotarized and unregistered sale to the Dadizons could not bind the Mocorros, who were third parties.

• Strict Observance of the Proper Mode of Appeal — An appeal from a judgment of the Regional Trial Court rendered in the exercise of its appellate jurisdiction must be taken by petition for review to the Court of Appeals under Rule 42. An appeal by notice of appeal is improper and shall be dismissed pursuant to Section 2, Rule 50. The provisions governing the manner and period of appeal are mandatory and jurisdictional; the policy of liberal construction cannot be used to subvert the essence of the proceeding or to ignore the Rules at will.

• Conclusive Effect of Trial Courts’ Factual Findings — Factual findings of the trial court, especially when affirmed by the appellate court, are entitled to great weight and respect and are binding on the Supreme Court, absent any showing that a fact or circumstance of weight and influence was overlooked that, if considered, would alter the outcome.

• “The mere execution of a deed of sale covering an unregistered parcel of land is not enough to bind third persons. A succeeding step — the registration of the sale — has to be taken. Indeed, registration is the operative act to convey or affect the unregistered land insofar as third persons are concerned.” — This excerpt encapsulates the ratio decidendi on the effect of non-registration of instruments affecting unregistered land.

• “[T]he deed, being the unilateral act of Bernadas, did not adversely affect the Mocorros, who were not her privies. Otherwise stated, the deed was res inter alios acta as far as they were concerned.” — This passage underscores the rule that an unregistered deed cannot prejudice strangers to the transaction.

• Murillo v. Consul, Undk. No. 9748, February 27, 1990, 183 SCRA xi — Served as the controlling authority for the strict policy against misdirected appeals, which was later codified in the 1997 Rules of Civil Procedure. The Court followed its directive that an appeal taken by the wrong procedure must be dismissed.

• Dee Hwa Liong Electronics Corporation v. Papiona, G.R. No. 173127, October 17, 2007, 536 SCRA 482 — Cited for the proposition that liberal construction of the rules cannot be used to ignore the Rules of Court at will and to the prejudice of the orderly presentation and resolution of issues.

• Valdevieso v. Damalerio, G.R. No. 133303, February 17, 2005, 451 SCRA 664 — Although involving registered land, the principle requiring registration of a deed of sale was applied by analogy to unregistered land in light of Section 113 of Presidential Decree No. 1529.

• Section 113, Presidential Decree No. 1529 (Property Registration Decree) — Provides that no deed, conveyance, mortgage, lease, or other voluntary instrument affecting unregistered land shall be valid except between the parties unless recorded in the Register of Deeds. Applied to hold that the unrecorded sale from Bernadas to the Dadizons could not bind the Mocorros.

• Section 2, Rule 41, Rules of Court — Delineates the modes of appeal: ordinary appeal by notice of appeal for RTC decisions in original jurisdiction, petition for review for RTC decisions in appellate jurisdiction, and appeal by certiorari to the Supreme Court for pure questions of law. The Dadizons’ failure to comply resulted in the dismissal of their appeal.

• Section 2, Rule 50, Rules of Court — Mandates the dismissal of an appeal taken by notice of appeal instead of by petition for review from an appellate judgment of the RTC. The provision was directly applied to affirm the CA’s resolution.

• Section 28, Rule 130, Rules of Court — States that the rights of a party cannot be prejudiced by an act, declaration, or omission of another. Referenced to support the conclusion that Bernadas’ deed was res inter alios acta as to the Mocorros.

Chief Justice Reynato S. Puno (Chairperson), Associate Justice Renato C. Corona, Associate Justice Minita V. Chico-Nazario, and Associate Justice Teresita J. Leonardo-De Castro.