FACTS:

The case involves a petition for review of the Joint Decision of the Court of Appeals affirming the Decisions of the Regional Trial Court (RTC) of Malolos, Bulacan in two civil cases. The petitioner, Valeriana L. Morente, represented the heirs of Teresa Sevilla de Leon, who owned a residential lot in Bulacan. In the 1960s, De Leon allowed the spouses Rosendo and Consuelo Florencio to construct a house on the property without any rental fees. In 1966, De Leon leased the property to Bienvenido Santos for as long as De Leon had an outstanding loan but not exceeding 15 years. Santos constructed a house on the property. In 1978, De Leon died intestate and her heirs allowed Florencio to continue staying on the property. In 1995, Florencio died but his heirs remained on the property. The heirs of De Leon demanded that the heirs of Florencio vacate the property, but they refused. As a result, Morente, on behalf of De Leon's heirs, filed separate complaints for ejectment against the heirs of Florencio and the heirs of Santos. The heirs of Florencio claimed that De Leon executed a Deed of Donation in 1976 in favor of Florencio, while the heirs of Santos argued that they occupied the property based on a lease agreement and because Florencio allowed them to remain without compensation. The cases were consolidated for trial.

The Municipal Trial Court (MTC) dismissed the complaints for lack of jurisdiction as it found that the issue of possession cannot be determined without resolving the issue of ownership first. The Regional Trial Court (RTC) ruled in favor of the plaintiffs, ordering the defendants to vacate the land and pay reasonable monthly rental and attorney's fees. The defendants appealed to the RTC, which reversed the MTC decision and rendered a new one in favor of the plaintiffs. The Court of Appeals affirmed the RTC decision, finding that the Deed of Donation presented by the defendants was insufficient to establish ownership and possession of the land.

The petitioners claimed ownership over a property through a deed of donation executed in 1976. However, the CA and RTC found the deed of donation to be lacking in credibility as evidence of ownership.

The CA agreed with the RTC's findings, stating that the deed of donation was not annotated on the title of the property, which still remained registered in the name of Teresa Sevilla. There was no record showing that the deed of donation or a copy of it was submitted to the Register of Deeds. Additionally, the real estate taxes on the property had been consistently paid by Teresa Sevilla and her caretaker throughout the years, with no claim of ownership or attempts to pay the taxes by the defendants in the case.

Furthermore, the deed of donation, which was purportedly notarized by Atty. Tirso L. Manguiat in Manila, was not found in the notarial record of Atty. Manguiat. This raised doubts as to its authenticity and raised questions as to why it was notarized in Manila when it was executed in San Miguel, Bulacan.

Finally, the Court observed that the signature of Teresa de Leon on the deed of donation was dissimilar to her customary signatures on her passports, further undermining the credibility of the document.

Given these reasons, the CA upheld the RTC's decision, dismissing the petitioners' claim over the property and affirming that the deed of donation did not transfer title over the property to the petitioners.

ISSUES:

1. Whether the deed of donation is a credible piece of evidence to support the defendants' claim of acquisition of title and ownership over the subject property.

2. Whether the failure to register the deed of donation affects its validity.

3. Whether the petitioners, as heirs of Rosendo Florencio, who appears to be the donee under the unregistered Deed of Donation, have a better right to the physical or material possession of the property over the respondents, the heirs of Teresa de Leon, the registered owner of the property.

4. Whether Florencio's failure to register the deed of donation and secure title over the property affected his claim of ownership.

5. Whether Florencio's failure to inform the heirs of De Leon about the deed of donation affected his claim of ownership.

6. Whether the respondents' payment of realty taxes and the petitioners' failure to pay constituted evidence against the petitioners' claim of ownership.

7. Whether the petitioners' failure to present the owner's duplicate of TCT No. T-44349 affected their claim of ownership.

8. Whether the respondents' evidence of falsification and perjury in relation to the deed of donation affected the petitioners' claim of ownership.

9. Whether the irregularities in the notarization of the deed of donation affected the petitioners' claim of ownership.

10. Whether or not the petitioner Registry of Deeds of Bulacan can be held liable for allowing the registration of illegally transferred property.

11. Whether or not the registration of the said property is valid despite being a result of a fraudulent transaction.

RULING:

1. The Court held that the deed of donation is not a credible piece of evidence to support the defendants' claim of acquisition of title and ownership over the subject property. The Court pointed out several reasons for its finding, including the absence of the deed of donation in the notarial record, dissimilar signatures in the deed of donation compared to the donors' customary signatures, and the lack of explanation for the failure to register the deed of donation.

2. The Court did not explicitly rule on whether the failure to register the deed of donation affects its validity. However, it reiterated that the unregistered claim of the defendants is insufficient to justify their possession and occupancy of the property. The Court also stated that the plaintiffs' right over the property as legal heirs and successors-in-interest of the registered owner must prevail against the unregistered claim of the defendants.

3. The petition has no merit. In ejectment cases, the issue is the physical or material possession of the property, and any pronouncement on ownership is provisional in nature. Ownership will not be conclusively determined in an ejectment case. The petitioners, as heirs of the alleged donee, have not provided sufficient evidence to establish their better right to possess the property over the respondents, the lawful heirs of the deceased registered owner.

4. The Supreme Court denied the petition, agreeing with the lower court's ruling that the deed of donation presented by the petitioners was unreliable as evidence to establish their better right over the property compared to the respondents. Florencio's failure to register the deed and secure title, failure to inform the heirs of De Leon about the deed, the respondents' payment of realty taxes while the petitioners did not, the petitioners' failure to present the owner's duplicate of the title, and the evidence of falsification and perjury in relation to the deed of donation and irregularities in its notarization all weakened the petitioners' claim of ownership.

5. The petition is denied and the decisions of the Regional Trial Court and the Court of Appeals are affirmed. The Registry of Deeds of Bulacan is held liable for allowing the registration of illegally transferred property. The registration of the property is declared null and void.

PRINCIPLES:

• A deed of donation must conform to all the essential requisites of donation as required by the provisions of the New Civil Code to be considered valid.

• The presumption of regularity in the notarization of a document may be overcome by clear, positive, and convincing evidence.

• Unregistered claims of ownership over a property are insufficient to justify possession and occupancy. The rights of legal heirs and successors-in-interest of the registered owner prevail over unregistered claims.

• Donation is one of the modes of acquiring ownership. The essential elements of donation are the reduction of the donor's patrimony, the increase of the donee's patrimony, and the intent to do an act of liberality. In the case of a donation of immovable property, it must be made in a public document and the acceptance must be made in the same deed or a separate public instrument.

• Registration of a deed of donation is not necessary for its validity and officiality. Registration is only necessary when the rights of third persons are affected. The registered owner has the right to possess, enjoy, and dispose of the property without any limitations imposed by law.

• In an ejectment case, the issue is the physical or material possession of the property, and any pronouncement on ownership is provisional in nature. A judgment rendered in an ejectment case shall not bar an action respecting title to the land and shall not be conclusive as to the facts found.

• Failure to register a deed of donation and secure title over the property affects the claim of ownership.

• Failure to inform interested parties about a deed of donation may affect the claim of ownership.

• Payment of realty taxes by one party while the purported owners fail to pay may be used as evidence against the claim of ownership.

• Failure to present the owner's duplicate of a title may weaken the claim of ownership.

• Evidence of falsification and perjury in relation to a deed of donation may affect the claim of ownership.

• Irregularities in the notarization of a deed of donation may affect the claim of ownership.

• The Registry of Deeds has a duty to exercise due diligence in the registration of properties and should be held accountable for any negligent acts or omissions in the performance of its official functions.

• Registration of a property obtained through fraudulent means is considered null and void.