Title
Bermudo vs. Court of Appeals
Case
G.R. No. L-38622
Decision Date
Oct 26, 1987
Dispute over Lot 776 ownership; reconstitution of title annulled due to bad faith, Chinese Nationalist Party's claim questioned under 1935 Constitution; escheat proceedings ordered.
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Case Digest (G.R. No. L-38622)

Facts:

  1. Ownership and Registration of Lot 776

    • Tom Chow and Go Se Pieng obtained a judicial decree of registration (No. 494657) on October 8, 1931, as co-owners of Lot 776, a 505-square meter parcel of land in Tacloban City.
    • Original Certificate of Title (OCT) No. 10256 was issued to them on November 3, 1932.
    • However, on June 27, 1931, before the issuance of the decree and title, Tom Chow and Go Se Pieng renounced their interests in Lot 776, claiming they were mere trustees of the Chinese Nationalist Party of Tacloban.
    • On September 4, 1940, Transfer Certificate of Title (TCT) No. 858 was issued to the Chinese Nationalist Party.
  2. Petition for Reconstitution of Title

    • On June 23, 1964, Valentin Bermudo filed a petition for the reconstitution of OCT No. 10256, claiming to be the vendee of one-half of Lot 776.
    • The Register of Deeds certified that the book containing OCT No. 10256 was destroyed, and no duplicate title was issued.
    • The lower court granted the petition on November 23, 1964, based on a deed of adjudication and absolute sale executed by Cristina Esperas Vda. de Chow, transferring Tom Chow’s interest to Bermudo.
    • TCT No. 1948 was issued to Bermudo and Go Se Pieng on December 8, 1964.
  3. Petition for Relief by the Chinese Nationalist Party

    • On January 23, 1965, the Chinese Nationalist Party filed a petition for relief, alleging fraud and misrepresentation in the reconstitution process.
    • The Party claimed it had owned and possessed Lot 776 for over 30 years under TCT No. 858 and was not notified of the reconstitution proceedings.
    • The lower court annulled the reconstitution order and TCT No. 1948, declaring TCT No. 858 valid.
  4. Appeals and Procedural History

    • Bermudo appealed to the Supreme Court, but his petition was denied for non-compliance with procedural rules.
    • The case was later transmitted to the Court of Appeals, which dismissed Bermudo’s petition, ruling that OCT No. 10256 had been cancelled by TCT No. 858 and that Bermudo acted in bad faith.
    • Bermudo filed another petition for certiorari and prohibition, which was ultimately dismissed by the Supreme Court.

Issue:

  1. Whether the Court of Appeals acted beyond its authority in affirming the lower court’s decision to annul the reconstitution of OCT No. 10256 after the order had been executed.
  2. Whether the Chinese Nationalist Party had the legal capacity to sue and own land under the 1935 Constitution and relevant laws.
  3. Whether Bermudo acted in bad faith in seeking the reconstitution of OCT No. 10256.
  4. Whether the ownership of Lot 776 by the Chinese Nationalist Party was valid under the 1935 Constitution and Corporation Law.

Ruling:

  1. Procedural Issue

    • The Court of Appeals acted beyond its authority in affirming the lower court’s decision to annul the reconstitution order after it had been executed and TCT No. 1948 had been issued.
    • A petition for relief is proper only when the court retains control over the proceedings, which was not the case here.
  2. Substantive Issues

    • The Chinese Nationalist Party’s ownership of Lot 776 is questionable under the 1935 Constitution, which limits land ownership to corporations with at least 60% Filipino ownership.
    • Bermudo acted in bad faith by failing to notify the actual occupants of Lot 776 about the reconstitution proceedings, violating the mandatory notice requirements under Republic Act No. 26.
    • The Party’s belated reorganization and reincorporation as the Leyte Kuomintang Cultural Association, Inc., were viewed as attempts to bolster its claim, but its ownership of Lot 776 remains doubtful.

Ratio:

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