G.R. No. 139672 - Gregorio Araneta University Foundation vs. Regional Trial Court of Kalookan City, Branch 120

In 1950, the Gonzales (Maysilo) Estate in Malabon, Rizal – spanning 871,982 square meters and covered by TCT No. 35487 – was expropriated by the Republic of the Philippines pursuant to a decision rendered by the then Court of First Instance of Rizal in Civil Case No. 131. This decision was later affirmed by the Supreme Court on May 14, 1954 (G.R. No. L-4918).
The expropriation was made with the understanding that the Government would subsequently resell the property to its occupants.

On October 20, 1960, tenants of the Gonzales estate filed a complaint in Civil Case No. 6376 (later known as Civil Case No. C-760) to compel the then Rural Progress Administration/PHHC to sell their respective occupied portions of the property.
On April 29, 1961, the Araneta Institute of Agriculture (now Gregorio Araneta University Foundation or GAUF) sought to intervene in the case on the basis that 52 tenants had entered into an agreement (“Kasunduan”) whereby they conveyed their priority rights to purchase a 507,376 square meter portion of the estate to the Institute.
A compromise agreement was subsequently reached and executed on November 28, 1961, which among other things, awarded Lots 75 and 54 to Gregorio Bajamonde.
Relying on this “Kasunduan” (which was later alleged to be forged), GAUF registered Transfer Certificate of Title (TCT) No. C-24153 with the Register of Deeds of Caloocan City, despite the lots having originally been awarded to Gregorio Bajamonde.

In Civil Cases Nos. 17347 and 17364, the compromise agreement entered into on November 28, 1961 was declared null and void on the ground of forgery.
On appeal, the Court of Appeals in CA-G.R. No. 45330-R sustained the nullity of both the “Kasunduan” and the related compromise agreement, thereby affecting the legal basis for GAUF’s registered title.

Acting on a motion of the heirs of Gregorio Bajamonde in Civil Case No. C-760, the Regional Trial Court (RTC) of Caloocan City, Branch 120 issued a Joint Order on August 29, 1986. This order:

Declared any transfer or conveyance from Gregorio Bajamonde to GAUF as rescinded;
Ordered the cancellation of GAUF’s TCT No. C-24153; and
Directed that new titles be issued in the name of Gregorio Bajamonde or his heirs.

On December 23, 1988, the RTC issued an order for the execution of the Joint Order. In compliance, the Register of Deeds eventually canceled GAUF’s TCT and issued TCT Nos. 174672 (for Lot 75) and 174671 (for Lot 54) in favor of the rightful owner, Gregorio Bajamonde or his heirs.
Further developments include the issuance of a writ of execution on May 27, 1988, and the sale of a portion of Lot 54 by the heirs on June 29, 1989, to Remington Realty Development, Inc.

On January 14, 1991, GAUF filed a petition for annulment with the Court of Appeals (CA-G.R. SP No. 23872), arguing that:

The cancelled title resulted from a collateral attack that violated Section 48 of PD No. 1529 (Property Registration Decree); and
The RTC acted without jurisdiction in issuing the Joint Order and subsequent Execution Order.

The CA, in its decision dated March 31, 1999 and reaffirmed in its resolution dated August 16, 1999, denied GAUF’s petition for annulment.
GAUF subsequently elevated the matter to the Supreme Court via a petition for review under Rule 45.

Whether the RTC, by virtue of its orders in Civil Case No. C-760, had proper jurisdiction to annul GAUF’s title (TCT No. C-24153).
Whether GAUF’s voluntary participation through intervention in the case rendered the RTC’s jurisdiction over its title indisputable.

Whether the cancellation of GAUF’s TCT constitutes a collateral attack on the title in violation of Section 48 of PD No. 1529.
Whether the challenge to GAUF’s title, based on the alleged irregularities in the “Kasunduan” and compromise agreement, is a direct or an indirect (collateral) attack.

Whether the nullification of the “Kasunduan” and the compromise agreement (as declared in Civil Cases Nos. 17347 and 17364) automatically renders GAUF’s title void.
Whether GAUF’s argument that its title was based on an allegedly separate withdrawal in Civil Case No. C-474 is sustainable.

Whether GAUF could properly raise the issues regarding the validity of its title and challenges on jurisdiction in a petition for review under Rule 45.
Whether these issues were already adequately raised and decided in previous proceedings, thereby barring their re-examination.