G.R. No. 130228 - Foster-Gallego vs. Spouses Galang

Vive Realty Corporation (VRC) acquired several properties at a public auction held by the Municipal Treasurer of ParaAaque on October 29, 1982.
Among these properties was a parcel in Barrio Kaybiga, ParaAaque, Metro Manila, covering 330 square meters and originally covered by Transfer Certificate of Title (TCT) No. 435402.
On November 25, 1983, the Treasurer executed a Final Bill of Sale over the property in favor of VRC.
VRC then initiated a petition (Civil Case No. 5801) seeking cancellation of titles purchased at the auction, leading to a December 19, 1983 decision by RTC-Branch 138 ordering cancellation of 11 titles (including TCT No. 435402) and directing the Register of Deeds to issue new titles in VRC’s name.

On June 22, 1984, the Spouses Romeo and Vivien Galang purchased the property from VRC by means of a Deed of Absolute Sale.
The Register of Deeds later issued TCT No. (86872) 22786 in the names of the Spouses Galang.
The Galangs took possession of the property, declared it for taxation purposes, and diligently paid the corresponding real property taxes.

In March 1989, Bernabe Foster-Gallego constructed a hollow block fence along the property’s perimeter.
In April 1989, upon returning from Saudi Arabia, Romeo Galang discovered the fence.
The matter was brought to the Barangay Lupon by the Galangs for settlement; however, Bernabe Foster-Gallego (via his lawyer) chose not to appear personally.

On May 16, 1989, the Spouses Galang filed a complaint for Quieting of Title with Damages against Bernabe Foster-Gallego.
The case was initially raffled to RTC-Branch 146 where issues of default arose when Gallego failed to appear at pre-trial (subsequently, a default order was issued against him on February 16, 1990).
Gallego claimed that his brother, Bernabe Foster-Gallego, was the true owner and alleged that there had been no notice of delinquency or auction regarding his brother’s title.
In later stages, procedural issues emerged including a motion to lift the default, a motion to admit a pre-trial brief, and a motion for intervention by Bernabe Foster-Gallego, which was eventually granted, while his answer-in-intervention was later struck off and his third-party complaint denied by the trial court.
The case was reassigned sequentially from RTC-Branch 146 to RTC-Branch 65 and finally to RTC-Branch 148 (Makati), where the trial court rendered judgment in favor of the Spouses Galang.

The trial court issued a final judgment (dated July 8, 1993) in favor of the Spouses Galang, removing any cloud on the title, declaring them the exclusive owners, and ordering defendant Lito Gallego to pay moral damages, attorney’s fees, and litigation expenses.
Subsequent orders by the trial court addressed the issues of intervention, notably striking off the answer-in-intervention and denying the third-party complaint.
The parties appealed the trial court’s rulings; however, the Court of Appeals modified part of the judgment—affiming the quieting of title while deleting the award of damages—and held that the petitioner (intervenor-appellant) lacked legal personality and filed his appeal out of time.

The Court of Appeals erred in dismissing his appeal challenging the trial court’s orders regarding his motion for intervention.
The trial court erred in reconsidering prior orders and in its handling of the default order against Gallego, which he argued effectively admitted him as a main defendant.
Various other errors, including the application of doctrines such as the innocent purchaser for value and the annulment of the auction sale and cancellation of his title, were committed.

He further sought relief to set aside the December 19, 1983 decision of RTC-Branch 138, thereby upholding his title (TCT No. 435402) and annulling the title in the name of the Spouses Galang, alleging procedural irregularities, fraud, and due process violations.

Whether the Court of Appeals erred in dismissing the petitioner’s (intervenor-appellant’s) appeal regarding the trial court’s orders denying his intervention and striking off his answer-in-intervention.
Whether the RTC-Branch 138 decision of December 19, 1983, which cancelled TCT No. 435402, can be declared void in an action for quieting of title.
Whether the petitioner is an indispensable party to the quieting of title action and if his interests are adequately represented in a suit solely aimed at removing a cloud on title.
Whether the trial court and subsequent appellate rulings improperly expanded the scope of a quiet title action to include collateral attacks on prior judgments and issues such as fraud, due process violations, and auction irregularities.
Whether the petitioner’s argument on alleged timely filing and the purported excusable delay in his appeal should overcome the strict jurisdictional requirement for timely perfecting an appeal.