Author: Earvin James M. M. Atienza Atienza
REALTY SALES ENTERPRISE, INC. and MACONRDAY FARMS, INC. v. INTERMEDIATE INTERMEDIATE APPELLATE COURT, ET AL. (1987) Petitioner/Appellant: Realty Sales Enterprise, Inc. and Macondray Farms, Inc. Respondent/Appellee: INTERMEDIATE APPELLATE COURT (Special Third Civil Cases Division), HON. RIZALINA BONIFACIO VERA, as Judge, Court of First Instance of Rizal, Branch XXIII, MORRIS G. CARPO, QUEZON CITY DEVELOPMENT AND FINANCING CORPORATION, and COMMISSIONER COMMISSIONER OF LAND REGISTRATION Ponente: Cortes, J. DOCTRINE(S): Jurisdiction, Reconstitution, Innocent purchaser for DOCTRINE(S): value, Nature of Proceedings Under Act No. 496, Land Registration Act, (1902) as amended by Act No. 2347 (1914), jurisdiction over all applications for registration of title to land was conferred upon the Courts of First Instance of the respective provinces in which the land sought to be registered is situated. Jurisdiction over land registration cases, as in ordinary actions, is acquired upon the filing in court of the application for registration, and is retained up to the end of the litigation. The issuance of a decree of registration is but a step in the entire land registration process; and as such, does not constitute a separate proceeding. "Act 3110 was not promulgated to penalize people for failure to observe or invoke its provisions. It contains no penal sanction. It was enacted rather to aid and benefit litigants, so that when court records are destroyed at any stage of judicial proceedings, instead of instituting a new case and starting all over again, they may reconstitute the records lost and continue the case. If they fail to ask for reconstitution, the worst that can happen to them is that they lose the advantages provided by the reconstitution law" (e.g. having the case at the stage when the records were destroyed). An innocent purchaser for value is one who bought the property relying on the certificate of title of the registered owner without notice that some other person has a right to or interest in such property and pays a full price for the same. It is settled that one is considered an innocent purchaser for value only if, relying on the certificate of title, he bought the property from the registered owner, "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 persons in the property." (Cui v. Henson, 51 Phil. 606 [1928], Fule v. De Legare, 117 Phil. 367 [1963], 7 SCRA 351.) He is not required to explore farther than what the Torrens title upon its face indicates. (Fule v. De Legare supra.). In this jurisdiction, it is settled that "(t)he general rule is that in the case of two certificates of title, purporting to include the same land, the earlier in date prevails . . . . In successive registrations, where more than one certificate is issued in respect of a particular estate or interest in land, the person claiming under the prior certificate is entitled to the estate or interest; and that person is deemed to hold under the prior certificate who is the holder of, or whose claim is derived directly or indirectly from the person who was the holder of the earliest certificate issued in respect thereof . . . ." (Legarda and Prieto v. Saleeby, 31 Phil. 590 [1915] at 595-596; Garcia V. CA, Nos. L-48971 and 49011, January 22, 1980, 95 SCRA 380.) x x x [I]t must be emphasized that the action filed by Carpo against Realty is in the nature of an action to remove clouds from title to real property. By asserting its own title to the property in question and asking that Carpo's title be declared null and void instead, and by filing the third-party complaint against QCDFC, Realty was similarly asking the court to remove clouds from its own title. Actions of such nature are governed by Articles 476 to 481, Quieting of Title, Civil Code (Republic Act No. 386), and Rule 64, Declaratory Relief and Similar Remedies, Rules of Court. Suits to quiet title are not technically suits in rem, nor are they, strictly speaking, in personam, but being against the person in respect of the res, these proceedings are characterized as quasi in rem. (McDaniel v. McElvy, 108 So. 820 [1926].) The judgment in such proceedings is conclusive only between the parties. (Sandejas v. Robles, 81 Phil. 421 [1948]).
FACTS: 1. Two (2) parcels of of land are in dispute dispute for allegedly being covered by certificates of title and registration decrees under three (3) different entities, namely Morris Carpo, Quezon City Dev’t. and Financing Corp. (QCDF) and Realty Sales Enterprise, Inc. (Realty). Thus, Carpo instituted a complaint before the CFI under Respondent Judge Vera against Realty and Macondray Farms, Inc. (Macondray) for the declaration of nullity of its corresponding certificate of title, on the ground that the same was issued by a court not sitting as a land registration court but one of ordinary jurisdiction, and that the judge
Author: Earvin James M. Atienza 2.
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had no authority since the records which was made basis of the title was lost during the war and is pending reconstitution; In reply, Realty denied the allegations and countered that the Reyes Court which issued its title was performing a purely ministerial duty, and that it was Carpo’s title that was null for having been issued despite being covered by another title. Realty further impleaded through a third-party complaint QCDF for nullity of its own title covering the same subject properties; In reply, QCDF filed a fourth-party complaint against Alvendia, et al. being the source of its own title, praying therefor for the reimbursement of its purchase price paid for the said properties. However, the same was dismissed for QCDF’s lack of interest in prosecuting the case; On January 20, 1981, the trial court rendered judgment annulling Realty’s and QCDF’s titles to the property in favor of Carpo. The same was appealed before the High Court by Realty, but the latter resolved to refer the case the Court of Appeals for determination of the merits; and The CA in turn set aside the trial court’s decision and issued a new one in favor of Realty. However, the case was subjected to the reorganization of the Judiciary, from which resulted a re-raffling of the case and later on, a reversal of the prior decision through Carpo’s MR. Further, the change from CA to IAC yielded a change in Justices assigned to the case.
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WON the Special Third Civil Cases Division was conferred with jurisdiction to try and render a decision of final resolution for the Court; WON a Petition for Certiorari was the proper remedy in the case; WON Carpo’s title is valid as against Realty’s and QCDF”s , since Realty’s title was issued when the records relative thereto was undergoing reconstitution; WON Carpo was an innocent purchaser for value; and WON QCDF was properly impleaded to the case.
PROVISION(S): Secs. 4 & 8, BP 129; Art. 527, New Civil Code; Sec. 4, Rule 74, Rule 65, and Rule 45 of the Rules of Court; Act No. 3110; Act No. 496; Act No. 2347; RULING + RATIO: 1. Yes. “ A reading of the law will readily show that what BP 129 prohibits is appointment from one class of divisions to another class. For
instance, a Justice appointed to the Criminal Cases Divisions cannot be assigned to the Civil Cases Divisions. Justice Bidin was reassigned from the Fourth Civil Cases Division, while Justice Camilon was reassigned from the Second Civil Cases Division. The two therefore come from the same class of divisions to which they were appointed. Thus, the reassignment of Justices Bidin and Camilon to form the Special Third Civil Cases Division in view of the voluntary inhibition of two (2) "regular" members, is still within legal bounds. x x x” 2. Yes. There are two modes by which cases decided by the then Courts of First Instance in their original jurisdiction may be reviewed: (1) an ordinary appeal either to the Supreme Court or to the Court of Appeals, or (2) an appeal on certiorari to the Supreme Court. To the latter category belong cases in which only errors or questions of law are involved. Each of these modes have different procedural requirements. x x x Realty originally filed a Petition for certiorari with this Court docketed as G.R. No. L-56471 questioning the decision of the Vera Court, and asking that it be allowed to appeal directly to this Court as it was raising only questions of law. However, this Court referred the case to the Court of Appeals "in aid of its appellate jurisdiction for proper determination on the merits of the appeal." It may thus be observed that even this Court treated the petition first filed as an appeal, and not as a special civil action for certiorari. After as, a petition for review by certiorari is also a form of appeal. (People v. Resuello L-30165, August 22, 1969, 69 SCRA 35). x x x Thus it was error for the IAC to hold that the Decision of the Vera Court "cannot be passed upon anymore in the Court of Appeals decision because appeal and not certiorari was the proper remedy." Precisely, petitioners brought the case to this Court on appeal, albeit by way of certiorari; 3. No. Applying the doctrine in the Nacua decision to LRC Case No.
657, the parties thereto did not have to commence a new action but only had to go back to the preceding stage where records are available. The land registration case itself remained pending and the Court of First Instance of Rizal continued to have jurisdiction over it. The records were destroyed at that stage of the case when an that remained to be done was the ministerial duty of the Land Registration Office to issue a decree of registration (which would be the basis for the issuance of an Original Certificate of Title) to implement a judgment which had become final (See Government v. Abural, 39 Phil. 996 [1919] at 1002; Sta. Ana v. Menla, 111 Phil. 947 [1961], 1 SCRA 1294; Heirs of Cristobal Marcos v. De Banuvar, 134 Phil. 257 [1968], 26 SCRA 316).
Author: Earvin James M. Atienza There are however authentic copies of the decisions of the CFI and the Court of Appeals adjudicating Lots 1, 2 and 3 of Plan Psu-47035 to Estanislao Mayuga. Moreover, there is an official report of the decision of this Court affirming both the CFI and the CA decisions. A final order of adjudication forms the basis for the issuance of a decree of registration.”; 4.
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No. x x x Even Carpo himself cites no factual proof of his being an innocent purchaser for value. He merely relies on the presumption of good faith under Article 527 of the Civil Code. x x x Carpo bought the disputed property from the Baltazars, the original registered owners, by virtue of a deed executed before Iluminada Figueroa, Notary Public of Manila dated October 9, 1970. However, it was only later, on October 13, 1970, that the decree of registration in favor of the Baltazars was transcribed in the Registration Book for the Province of Rizal and that an Original Certificate of Title was issued. It was on the same day, October 13, 1970, that the deed evidencing the sale between the Baltazars and Carpo was inscribed in the Registry of Property, and the Original Certificate of Title was cancelled as Transfer Certificate of Title No. 303961 in the name of Carpo was issued. x x x Thus, at the time of sale there was as yet no Torrens title which Carpo could have relied upon so that he may qualify as an innocent purchaser for value. Not being a purchaser for value and in good faith, he is in no better position than his predecessors-ininterest; Yes. Moreover, even as this Court agrees with QCDFC that the third-party complaint filed against it by Realty was procedurally defective in that the relief being sought by the latter from the former is not in respect of Carpo's claim, policy considerations and the factual circumstances of the case compel this Court now to rule as well on QCDFC's claim to the disputed property. ** To rule on QCDFC's claim now is to avoid multiplicity of suits and to put to rest these conflicting claims over the property. After an, QCDFC was afforded fun opportunity, and exercised its right, to prove its claim over the land. It presented documentary as well as testimonial evidence. It was even permitted to file a fourth-party complaint which, however, was dismissed since it failed to prosecute its case.
DISPOSITION: Decision upholding the title of Realty Sales Enterprise, Inc. was AFFIRMED.
