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:

Background of the Property and Parties

• Petitioners: The Board of Liquidators (created to liquidate the affairs of the abolished National Food Products Corporation [NFPC]) and Panay Development Co., Inc. (PDCI).
• Respondent: Jose Roxas, who was in actual possession of the disputed property.
• The disputed property is Lot No. 3247 located in Panay, Capiz, originally covered by TCT No. R0-4331 and later cancelled and reissued as TCT No. 12651 in the name of PDCI.
• Maria Roxas Lisao, the original owner, assigned the property to PDCI as her contribution in exchange for 2,680 shares in the corporation, evidenced by the Voting Trust Certificate and Stock Certificate.

Transaction and Subsequent Mortgage

• On April 12, 1940, PDCI entered into a management contract with NFPC, whereby NFPC financed the construction, maintenance, management, and operation of its fishponds.
• As security for NFPC’s financial advances, PDCI executed a real estate mortgage on all its properties—including Lot No. 3247—which was originally Maria Roxas Lisao’s property.
• The mortgage was duly reflected in the transfer of the title, cementing PDCI’s registration as the owner.

Changes in the Corporate and Legal Landscape

• NFPC was subsequently abolished under Executive Order No. 372 (1950), leading to the creation of the Board of Liquidators to wind up its affairs.
• On December 13, 1972, the Board executed a contract of amicable settlement with PDCI. Under the agreement, PDCI agreed to pay P170,000.00 to settle its mortgage obligation and to assist in removing squatters from the property.
• The contract was approved by the Office of the President and included the delivery of the title and pertinent records to PDCI upon fulfillment of its obligations.

Litigation and Claims over Possession

• The property became contested when respondent Jose Roxas was found illegally occupying Lot No. 3247, prompting PDCI to demand vacation of the premises.
• PDCI initiated an action for recovery of possession, coupled with a request for a preliminary mandatory injunction and damages, filed in the Court of First Instance of Capiz (Civil Case No. V3685).
• In his answer, respondent Roxas asserted that he acquired the property by legal means, having possessed it publicly, peacefully, and continuously for over ten years. He also contended that PDCI’s title was lost by laches and prescription.

Judicial Proceedings and Developments

• The trial court, after due hearings, issued a decision on July 19, 1977, declaring PDCI the legal owner of Lot No. 3247 and ordering respondent Roxas (and co-occupants) to vacate and turn over possession, improvements, and usufruct of the property.
• The decision was appealed by respondent Roxas to the Court of Appeals, which, on December 29, 1987, reversed the trial court’s decision regarding Lot No. 3247 without addressing damages and costs.
• A motion for reconsideration by the petitioners was denied in a resolution dated July 21, 1988, leading to the filing of the present petition for certiorari.

Errors Assigned by the Petitioners

• The petitioners claimed that the Court of Appeals erred by failing to recognize that the deed of transfer and assignment executed by Maria Roxas Lisao conveyed and assigned the property outright to PDCI, which subsequently mortgaged the property to NFPC.
• It was contended that the CA improperly deemed PDCI’s registration as being in bad faith because of alleged knowledge of Jose Roxas’ claim and the existence of a quitclaim deed and donation purportedly executed on April 15, 1952.
• The CA was also faulted for entertaining the issue of possession, which should have been procedurally proper in a recovery of possession proceeding.
• Lastly, the CA was accused of erroneously reversing the trial court’s decision when the records clearly established PDCI’s title over Lot No. 3247.

Issue:

Whether the deed of transfer and assignment executed by Maria Roxas Lisao effectively conveyed Lot No. 3247 to PDCI, thereby vesting in the petitioner absolute ownership over the property.

• Did the exchange of the property for shares in PDCI conclusively transfer title, notwithstanding subsequent alleged instruments such as the quitclaim deed and donation?

Whether the Court of Appeals erred in finding PDCI’s registration in bad faith in light of the alleged notice of Jose Roxas' claim and the existence of purported subsequent dispositions (quitclaim deed and donation).

• Is there merit to the claim that PDCI should have been aware of any competing interest due to these documents?

Whether it was proper for the Court of Appeals to entertain and decide on the issue of possession raised by respondent Roxas in a proceeding fundamentally aimed at recovery of possession.

• Was the CA’s determination on possession within its jurisdiction considering the ongoing recovery of possession action?

Whether respondent Roxas’ claim that PDCI’s title was lost by prescription and laches is tenable, given the established record and the registration of the property.

• Can adverse possession prevail over a duly registered and annotated title when the possessor acquired the property in bad faith?

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)