Facts:

This case revolves around a land dispute involving Lot 19355, originally under the ownership of Julio Baniqued, who executed various donations of portions of this land to his children. The case was initially brought by Macaria Baniqued, Agripina Baniqued, and others against petitioners Jose Baniqued and Bibiana Soriano in the trial court. On October 23, 1923, Julio donated portions of the land to his daughters, Benedicta Gallardo and Rosa Gallardo. Later, on June 8, 1933, he made further donations to his children, including Jose Baniqued, who received 6,234 square meters. The donees took possession and paid taxes on their respective shares, while Jose worked the land as a tenant. In the late 1960s, he began to claim ownership of the entire lot.

Jose Baniqued had previously filed a petition in 1958 to recover a lost title for Lot 19355, resulting in a new title (TCT No. 27617) issued solely in his name. This became central to the disputes raised by the plaintiffs, who sought the

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Facts:

Ownership and Donation of Lot 19355

• Julio Baniqued was the registered owner of Lot 19355 under OCT No. 20468, later reconstituted as Transfer Certificate of Title (TCT) No. R.T. No. 224 (16849) covering 53,464 square meters.
• On October 23, 1923, Julio Baniqued donated two portions—1,489 sq. m. and 1,962 sq. m. pro indiviso—to Benedicta Gallardo and Rosa Gallardo, his daughters by his second wife.
• On June 8, 1933, he executed inter vivos donations in pro indiviso shares in favor of his children, allocating varying portions as follows:
• Macaria Baniqued was allotted 2,820 sq. m.
• Agripina Baniqued received 2,820 sq. m. (later amended to include an additional 2,108 sq. m.)
• Santiago Baniqued was allotted portions of 4,460 sq. m. and 5,106 sq. m.
• Catalina Baniqued received 2,820 sq. m.
• Candida Baniqued was allotted 820 sq. m.
• Jose Baniqued, petitioner, was donated 6,234 sq. m.
• Jose Baniqued also acted as an instrumental witness to the execution of these donations.

Development of the Dispute

• After the inter vivos donations, the donees took possession of their allocated shares and duly paid the necessary taxes; by common consent, they permitted Jose Baniqued to work the land as tenant.
• Starting in 1970, however, Jose Baniqued refused to deliver the donees’ shares, asserting that he had exclusive rights over the entire Lot 19355.
• Earlier on September 9, 1958, Jose Baniqued had filed a petition with the Court of First Instance (CFI) of Pangasinan for the issuance of a new owner’s duplicate certificate, alleging the loss of TCT No. 16849.
• Instead of merely issuing a duplicate title in the name of Julio Baniqued, the Register of Deeds issued TCT No. 27617 solely in the name of Jose Baniqued, thereby transferring title over the entire lot to him.

Mortgage, Foreclosure, and Subsequent Litigation

• On July 22, 1967, petitioners (Jose Baniqued and Bibiana Soriano) mortgaged Lot 19355 to the Kaluyagan Rural Bank of San Carlos City to secure a loan amounting to P3,000.00.
• Failure to pay the due debt led the bank to foreclose the mortgage, and the property was sold at public auction to the bank as the highest bidder.
• On April 4, 1968, private respondents (plaintiffs in the lower court) filed a complaint seeking the annulment of TCT No. 27617, the reinstatement of TCT No. R.T. No. 224 (16849), partition of the property, and damages.

Trial Court Decision and Its Amended Form

• The trial court, on April 7, 1971, rendered a decision declaring Lot 19355 to be owned in common pro indiviso by the donees and Jose Baniqued, with precise allocations:
• Macaria Baniqued – 5,640 sq. m.
• Agripina Baniqued – 2,820 sq. m. (later amended to 4,928 sq. m. in total)
• The heirs of Catalina Baniqued (all surnamed Perez) – 2,820 sq. m.
• Benedicta and Rosa Gallardo – 3,451 sq. m.
• Jose Baniqued – 6,234 sq. m.
• The remaining area (20,825 sq. m.) to be divided equally among other heirs pursuant to intestate succession.
• The decision also ordered:
• The annulment and cancellation of TCT No. 27617 with the reinstatement of TCT No. R.T. No. 224 (16849), to be updated by issuing a new transfer certificate reflecting the correct proportions.
• Recognition of the Kaluyagan Rural Bank as a mortgagee in good faith.
• A directive for Jose Baniqued to redeem the lot by paying the remaining mortgage debt plus accrued interest within 30 days; if he failed to do so, the donees were given the right to redeem, with requisite compensation from him.
• Payment of compensatory, moral, exemplary damages, and attorney’s fees by Jose Baniqued to the plaintiffs.
• Dismissal of the counterclaims of the intervening defendant Bank and other intervenors for lack of merit.
• On September 9, 1971, an amendment was issued to increase Agripina Baniqued’s share, reflecting documentary evidence confirming her father's original donation to her.

Appellate Proceedings and Findings

• The Court of Appeals sustained the trial court’s factual findings regarding the inter vivos donation, particularly noting that only 6,234 sq. m. was donated by Julio Baniqued to his son, Jose Baniqued.
• The CA observed that in his 1958 petition for a new certificate of title, Jose Baniqued misrepresented the donation as covering the entire Lot 19355, while the order from the CFI merely instructed the issuance of a new owner’s duplicate for TCT No.16849.
• Instead, a new title (TCT No. 27617) was improperly issued in his name by the Register of Deeds, thereby allegedly constituting fraud and demonstrating negligence or possible connivance with registration authorities.
• The CA also took cognizance of the disproportionate shares received by Jose Baniqued compared with the much smaller parcels allocated to his siblings, thereby underpinning the claim of irregularity.
• The appellate court stressed that the Torrens system, with its principles of prescription and finality, cannot be utilized as a vehicle to legalize fraud, error, or injustice in conveyance of land.

Issue:

Whether the issuance of TCT No. 27617 in the name of Jose Baniqued constituted a fraud on the part of the petitioner and registration authorities.

• Did the misrepresentation in the 1958 petition justify the issuance of a new title solely in his name?
• Is the new title valid under the strict rules of the Torrens system despite evidences of bad faith?

Whether the findings of the lower court and the subsequent ruling by the Court of Appeals correctly interpreted and applied the principles governing donations inter vivos and the division of the property among the heirs.

• Was the allocation of specific portions among the donees consistent with the original donation documents?
• Did the trial court err in denying Jose Baniqued’s counterclaim for a larger share of the property?

• Whether the inherent protections of the Torrens system, such as prescription and notice to the entire world, can be invoked to perpetuate or legalize an act tainted by fraud and misrepresentation.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)