CASE: DIAZ vs.
REPUBLIC
FACTS:
Petitioner spouses Morris and Socorro Carpo filed a Complaint for Quieting of
Title with RTC of Makati against respondent.
The Carpos claimed to be the owners of a 171,209-square meter parcel of land
covered by TCT No. 296463 issued in their names. They further alleged that
respondent was claiming to have titles (specifically TCT Nos. 125945, T-4366, T-
4367 and T-4368)) over the property covered by the Carpos TCT No. 296463
and that respondent had made such property its equity contribution to be
developed into a residential subdivision.
ARGUMENTS
Petitioner: The TCTs and their derivatives “appear to have been issued in the
name of Ayala and purport to cover and embrace the Carpo’s property or
portion thereof duly covered registered under the already indeafeasible and
incontrovertible TCT No. 296463 are inherently invalid and enforceable for not
being the duly issued derivatives of the Carpos titles. They applied for a
restraining order and writ of preliminary injunction to enjoin respondent from
doing construction and development works on the properties in purported
violation of the Carpos rights
Respondent: Ali pointed out that the areas covered by TCT Nos. T-4366, T-
4367, and T-4368 do not overlap with the Carpos claimed property and
dispute pertained only to the land covered by the Carpos TCT No. 296463
and TCT No. T-5333 (later TCT No. T-41262 in the name of ALI) in the name
of Las Pinas Ventures, Inc which merged with respondent, which was derived
from TCT No. 125945 in the name of Ayala Corporation.
ALI alleged that it is the true owner of the property covered by TCT No. T-
5333 as it traces back its title to OCT No. 242 issued in 1950 while the Carpos
titles was derived from OCT No. 8575 issued only in 1970.
ALI also claimed the Carpos complaint was barred by res judicata in view of
the 1941 decision in Guico vs. San Pedro.
ALI filed a Motion for Summary Judgment on ISSUE NO. 1 wherein RTC denied
its motion. This denial was challenged in a petition for certiorari with CA which
the CA granted. Both parties moved for reconsideration of the CA decision. ALI
file a motion for partial reconsideration entreating the CA itself to render the
summary judgment in the interest of judicial economy and on claim that the sole
issue was legal. The Carpos, in their motion insisted that there were genuine
issues in this case that must be threshed out in trial. Both motions where denied.
Both parties elevated the matter to the SC in separate petitions for review on
certiorari. The Court denied both petitions as well as the motions for
reconsideration.
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RTC rendered a Summary Judgment finding the Carpos title superior to that of
ALI.
OCT No. 242 covers the property surveyed under SWO, but the pleadings on
file fail to allege that the same was approved by the Director of the Bureau of
Lands, thereby justifying this court to be skeptical of the validity of the
issuance of OCT No. 242. In original land registration cases, it is mandatory
that the application should be accompanied by a survey plan of the property
applied for registration, duly approved by the Director of the Bureau of Lands.
A survey plan without the approval of the Director of the Bureau of Lands has
the character of being of dubious origin and it is not therefore worthy of being
accepted as evidence.
ALI filed a notice of appeal but the same was dismissed by the CA. The motion
for reconsideration was also denied. Thus, ALI was prompted to file with the SC
a petition for review wherein ALI’s petition was meritorious and reversed the CA
for further proceedings.
The CA rendered the challenged decision in favor of ALI. The Carpos filed their
motion for reconsideration which was denied by the CA. Thus, the instant
petition for review filed by Petitioner.
ISSUE:
1. Which between the 2 titles, OCT No. 242 by respondent and OCT No. 8575 of
the Carpos should be accorded priority?
2. WON the CA erred in declaring that the title of respondent is valid even without
the requisite survey plan approved by the Director of Lands
3. WON the CA erred in declaring petitioners guilty of laches and prescription
4. WON the CA erred in declaring the RTC “relied heavily” on an alleged admission”
by respondent of the validity of the title of petitioners over the disputed parcel of
land.
5. WON the CA erred in declaring that there is res judicata against petitioners
based on the case of Guico vs. San Pedro without proper determination whether
the facts in said case are directly applicable to this case and whether the
elements of res judicata are present.
RULING:
SC denied the petition and concurred with the CA.
SC said that Ali did not deny the existence of the title in the name of the plaintiffs
but admitted that the title to the properties in question completely overlaps with
each other which was further substantiated by an affidavit of Jose Rizal Mercado,
a Geodetic Engineer. He prepared a Sketch Plan clearly indicating the
overlapping and identical boundaries between the private respondents TCT No.
296463 and petitioner’s TCT No. 125945, (formerly TCT No. T-5333)
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ISSUE No. 1: Base on the affidavits and supporting documents submitted by the
parties, as well as the applicable law and jurisprudence on the matter, the
general rule is that in the case of two certificates of title, purporting to include the
same land, the earlier date prevails. Thus, the OCT No. 242 of respondent
issued in 1950 is superior and should be upheld rather than the OCT No. 8575
issued only in 1970 where the Carpos title was derived.
ISSUE No. 2:
It is admitted that a survey plan is one of the requirements for the issuance of
decrees of registration, but upon the issuance of such decree, it can most
certainly be assumed that said requirement was complied with by ALI’s
original predecessor-in-interest at the time the latter sought original
registration of the subject property. Moreover, the land registration court must
be assumed to have carefully ascertained the propriety of issuing a decree in
favor of ALI’s predecessor-in-interest, under the presumption of regularity in
the performance of official functions by public officers. The court upon which
the law has conferred jurisdiction, is deemed to have all the necessary powers
to exercise such jurisdiction, and to have exercised it effectively.
The Court need not emphasize that it is not for ALI to allege in its pleadings,
much less prove, that its predecessor-in-interest complied with the
requirements for the original registration of the subject property. A party
dealing with a registered land need not go beyond the Certificate of Title to
determine the true owner thereof so as to guard or protect his or her interest.
Hence, ALI was not required to go beyond what appeared in the transfer
certificate of title in the name of its immediate transferor. It may rely solely, as
it did, on the correctness of the certificate of title issued for the subject
property and the law will in no way oblige it to go behind the certificate of title
to determine the condition of the property. This is the fundamental nature of
the Torrens System of land registration, to give the public the right to rely upon
the face of a Torrens certificate of title and to dispense with the need of
inquiring further.
The presumption of regularity enjoyed by the registration decree issued in
Case No. 976 and OCT No. 242 includes the presumption that all the
requisites for the issuance of a valid title had been complied with. ALI need
not allege or prove that a duly approved survey plan accompanied the
issuance of OCT No. 242 in 1950 because it is presumed. It is the party who
seeks to overcome the presumption who would have the burden to present
adequate and convincing evidence to the contrary. This, petitioners did not
even attempt to do.
ISSUE No. 2:
OCT No. 242 of ALI's predecessor-in-interest was issued on May 7, 1950, or
forty-five (45) years before plaintiffs-appellees filed their complaint on March
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10, 1995. As such, it is the Court's firmly held view that plaintiffs-appellees
claim is barred not only by prescription, but also by laches.
Aside from the fact that OCT No. 242 had become incontrovertible after the
lapse of one (1) year from the time a decree of registration was issued, any
action for reconveyance that plaintiffs-appellees could have availed of is also
barred. It is now well-settled that an action for reconveyance, which is a legal
remedy granted to a landowner whose property has been wrongfully or
erroneously registered in another's name, must be filed within ten years from
the issuance of the title, since such issuance operates as a constructive
notice. Since ALI's title is traced to an OCT issued in 1950, the ten-year
prescriptive period expired in 1960.
Plaintiffs-appellees, as well as their predecessor-in-interest, are guilty of
laches because they have not shown that they have taken judicial steps to
nullify OCT No. 242, from which ALI's title was derived, for forty-five (45)
years. To allow them to do so now, and if successful, would be clearly unjust
and inequitable to those who relied on the validity of said OCT, the innocent
purchasers for value, who are protected by the precise provisions of P.D.
1529
ISSUE No. 3: Although the Summary Judgment did not expressly state that ALI
admitted the validity of Carpos title with its admission of the said title's existence,
that is the unmistakable import of the trial court's statements that ALI's admission
of the existence of Carpo's title "are conclusive upon it" and bars ALI from taking
a "position contrary to or inconsistent with its answer" followed by the statement
that the trial court is "not inclined to concur with Ayala's claim of validity of its TCT
No. T-5333 and alleged OCT No. 242, absent of (sic) any admission to that effect
by the plaintiffs." This is yet another non sequitur argument on the part of the trial
court which the CA correctly pointed out in its own Decision.
ISSUE No. 4: The case of Guico vs. San Pedro was binding on the Carpos. All
the requisites must be complied with. Plaintiffs only have objections with respect
to the 4th requisite there being no identity of parties. The SC agreed with
petitioner, however, the SC ruled that the CA’s questioned decision had sufficient
basis in fact and law even without relying on the Guico case.
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