Facts:

The case involves a petition for certiorari filed by the Board of Liquidators and Panay Development Co., Inc. (PDCI) against Jose Roxas. The events leading to this case began with the ownership of Lot No. 3247, located in Panay, Capiz, which was originally owned by Maria Roxas Lisao. On April 15, 1940, Maria assigned the lot to PDCI in exchange for 2,680 shares valued at P26,800. This transaction was documented through Voting Trust Certificate No. 6 and Stock Certificate No. 8, confirming her ownership of the shares. Subsequently, on April 12, 1940, PDCI entered into a management contract with the National Food Products Corporation (NFPC) for the operation of its fishponds, securing a loan with a real estate mortgage on all its properties, including Lot No. 3247. The original title was later canceled, and a new title (TCT No. 12651) was issued in PDCI's name.

In 1972, the Board of Liquidators executed a contract with PDCI for the settlement of its mortgage obligation, w...

Facts:

Ownership and Transfer of Lot No. 3247:

• Petitioner Panay Development Co., Inc. (PDCI) is the owner of Lot No. 3247 under TCT No. 12651, originally owned by Maria Roxas Lisao. Maria assigned the lot to PDCI in exchange for 2,680 shares of PDCI’s capital stock valued at P26,800.00. This transfer was documented in the Stock and Transfer Book of PDCI and reflected in the Voting Trust Certificate No. 6 and Stock Certificate No. 8.

Mortgage to NFPC:

• On April 12, 1940, PDCI entered into a management contract with the National Food Products Corporation (NFPC), which financed the construction and operation of PDCI’s fishponds. As security, PDCI mortgaged all its properties, including Lot No. 3247, to NFPC. The mortgage was annotated on the original certificate of title (TCT No. R0-4331).

Abolition of NFPC and Amicable Settlement:

• NFPC was abolished in 1950, and the Board of Liquidators (Board) was created to settle its affairs. On December 13, 1972, PDCI and the Board entered into a contract of amicable settlement, wherein PDCI agreed to pay P170,000.00 to settle its mortgage obligation. The Board agreed to assist PDCI in ejecting squatters and delivering the certificates of title.

Respondent’s Occupation and Claims:

• Respondent Jose Roxas was found illegally occupying Lot No. 3247. PDCI demanded that he vacate the premises, but Roxas refused, claiming he acquired the property legally and had been in peaceful, public, and uninterrupted possession for over ten years. He argued that PDCI’s title was lost due to laches and prescription.

Trial Court Decision:

• The trial court ruled in favor of PDCI, declaring it the legal owner of Lot No. 3247 and ordering Roxas to vacate the property and pay costs. Roxas appealed to the Court of Appeals, which reversed the trial court’s decision, prompting PDCI to file this petition.

Issue:

1. Whether the Court of Appeals erred in not recognizing that the deed of transfer and assignment in trust conveyed Lot No. 3247 to PDCI, which was later mortgaged to NFPC.
2. Whether the Court of Appeals erred in considering PDCI as a registrant in bad faith, given its knowledge of Roxas’s claim and the existence of a quitclaim deed.
3. Whether the Court of Appeals erred in entertaining the issue of possession raised by Roxas in a recovery of possession case.
4. Whether the Court of Appeals erred in reversing the trial court’s decision when the records clearly show that PDCI holds title to Lot No. 3247.

Ruling:

The Supreme Court ruled in favor of PDCI, reversing the decision of the Court of Appeals and reinstating the trial court’s judgment. The Court held that:

• PDCI is the absolute owner of Lot No. 3247, having acquired it through a valid assignment from Maria Roxas Lisao.
• Roxas’s claims of ownership based on a quitclaim, deed, and donation executed by Maria Roxas Lisao are invalid, as she no longer owned the property at the time of the alleged transfer.
• Roxas’s possession of the property, even if for over ten years, does not defeat PDCI’s registered title, as the latter’s ownership cannot be lost by prescription or laches.
• Roxas acted in bad faith, as he was aware of PDCI’s ownership through the annotated title and registration.
• The verbal sale of the property by Maria’s siblings to Roxas is void under the Statute of Frauds and inadmissible in evidence.

Ratio:

1. Validity of PDCI’s Ownership: The assignment of Lot No. 3247 to PDCI in exchange for shares of stock was a valid transfer of ownership, not merely a trust arrangement. Maria Roxas Lisao no longer had any rights to the property after the assignment, making her subsequent quitclaim and donation void.
2. Prescription and Laches: Registered titles cannot be defeated by prescription or laches. Roxas’s possession, even if long-standing, does not affect PDCI’s ownership.
3. Bad Faith of Roxas: Roxas was aware of PDCI’s ownership through the annotated title and registration, making his claim of ownership in bad faith.
4. Statute of Frauds: The alleged verbal sale of the property by Maria’s siblings to Roxas is unenforceable under the Statute of Frauds and inadmissible in evidence.