G.R. No. 112443 - Bordalba vs. Court of Appeals

Petitioner Teresita P. Bordalba sought review under Rule 45 of the Rules of Court to set aside the decision of the Court of Appeals which affirmed with modification the Regional Trial Court (RTC) decision involving Lot No. 1242 (Lot No. 799-C), 1,853 square meters, located at Barrio Looc, Mandaue City.
Respondents are the heirs of Nicanor Jayme and Asuncion Jayme-Baclay, claiming ownership over a portion of the lot.

The property originally belonged to the late spouses Carmeno Jayme and Margarita Espina de Jayme.
In 1947, an extra-judicial partition (in Spanish) divided the property into three equal parts:

One-third to their grandchild Nicanor Jayme (deceased) and his heirs (Candida Flores and children Emmanuel, Dina, Evelia, Gesila).
One-third to grandchild Asuncion Jayme-Baclay and her heirs (Angelo Baclay, Elnora Baclay, Carmen Jayme-Daclan).
One-third to their daughter Elena Jayme Vda. de Perez, mother of petitioner Teresita Bordalba.
Another one-third to an unidentified party.

Nicanor Jayme’s family occupied a house on their adjudicated portion since 1945.
In July 1964, Elena Jayme Vda. de Perez filed an amended registration application over the lot with boundaries different from those later used, claiming possession since 1947 and that Nicanor Jayme occupied a portion by permission.
Nicanor Jayme and Asuncion Jayme-Baclay opposed this registration, asserting their ownership. The case was dismissed due to lack of interest.

On January 10, 1979, petitioner applied for a Free Patent over Lot No. 1242 (same lot), which was granted on April 16, 1980, with Free Patent No. (VII-I) 11421 and Original Certificate of Title No. 0-571 (FP).
Petitioner subdivided Lot No. 1242 into six lots (1242-A to 1242-F), selling and mortgaging some portions.

Upon learning of petitioner’s patent, respondents filed suit to nullify the Free Patent, certificates of title, and to recognize their ownership. They also alleged bad faith on the part of spouses Cabahug and the Rural Bank of Mandaue who purchased/mortgaged portions from petitioner.
Petitioner claimed acquisition by purchase from her mother and possession since 1947 and denied respondents’ heirship and title claims. She admitted the 1947 extra-judicial partition but denied knowledge of it.
The trial court ruled that petitioner obtained the patent by fraud and cancellation was proper but upheld the bona fide purchasers’ titles and mortgages. Petitioner was ordered to pay damages and attorney’s fees.

The Court of Appeals affirmed the decision with the modification that petitioner must reconvey only one-third of Lot No. 1242 to respondents, corresponding to their share rather than cancelling all titles.
Petitioner filed a petition for review, contesting witness testimonies (invoking the dead man’s statute), respondent heirship, and identity of the disputed lot and the lot in the 1947 partition.

Whether the Court of Appeals erred in affirming the declaration of fraud and cancellation of the Free Patent and Original Certificate of Title obtained by petitioner.
Whether the testimonies admitted in court violated the dead man’s statute.
Whether respondents have valid heirship rights from Nicanor Jayme and Asuncion Jayme-Baclay.
Whether the lot subject of petitioner’s Free Patent is identical to the parcel of land adjudicated in the 1947 extra-judicial partition.
Whether petitioner should be ordered to reconvey one-third of Lot No. 1242 to respondents.