G.R. No. 170528 - Heirs of Tiro vs. Philippine Estates Corp.

Petitioners (Guillerma Tiro, Dominga Tiro Nunez, and Maximo Tiro) are the alleged heirs of Julian Tiro and representatives of the heirs of Pedro Tiro.
The dispute arises over a parcel of land described as Lot 2914 in the Cadastral Survey of Opon, situated in Barrio Marigondon, Municipality of Opon, Cebu, covering 8,120 square meters.
This land was originally evidenced by Original Certificate of Title (OCT) No. RO-1121 in the names of Julian and Pedro Tiro.

In 1969, OCT No. RO-1121 was cancelled, and a Transfer Certificate of Title (TCT) No. 2848 was issued in favor of Spouses Julio Baba and Olimpia Mesa.

The cancellation and reissuance were based on an Extrajudicial Declaration of Heir and Confirmation of Sale executed on 20 August 1969 by Maxima Ochea, who claimed to be the sole surviving heir of the Tiro decedents.
A separate Deed of Confirmation, also dated 20 August 1969 and executed by Spouses Amores, verified that the disputed property had been transferred to the Spouses Baba as early as 1947.

On 20 June 1979, TCT No. 2848 was cancelled and replaced by TCT No. 9415 in the name of Spouses Ronaldo Velayo and Leonor Manuel after a subsequent sale.
The property then passed from the Spouses Velayo to Pacific Rehouse Corporation, leading to the cancellation of TCT No. 9415 and issuance of TCT No. 30186 on 16 February 1995.
Finally, on 25 October 1996, upon the sale to the respondent (Philippine Estates Corporation), TCT No. 30186 was cancelled and TCT No. 35672 was issued in the name of the respondent.

The petitioners contended that they continuously possessed the disputed land since time immemorial until they were ousted in 1995 by persons claiming new ownership.
They argued that the extrajudicial document executed by Ochea was invalid since she was not related by blood or legal connection to Julian and Pedro Tiro, and therefore had no authority to effectuate the cancellation of the original OCT.
Petitioners maintained that because the original transfer was fraudulent, all subsequent transfers – including the one to the respondent – were also invalid.
Evidence tendered by petitioners consisted largely of testimonies (from Maximo Tiro and his son-in-law, Joveniano Diasana) and documentary evidence aimed at establishing their filiation with the decedents.

The respondent, Philippine Estates Corporation, asserted that its predecessor (Pacific Rehouse Corporation) acquired the land from the Spouses Velayo, who were the registered owners and were in possession of the property at the time of sale.
It emphasized that there was no indication of defect in the titles during any of the sale transactions.
The respondent argued that more than 27 years had elapsed since the cancellation of the original title, and that petitioners’ claims were barred by laches and prescription, given that neither decedent had questioned the cancellation during their lifetime.
To substantiate its claim, the respondent presented:

TCT No. 2914 in the name of the Spouses Velayo.
A Municipal Trial Court decision (28 June 1994, Civil Case No. R-1202) affirming the possession of the Spouses Velayo.
The Deed of Sale and Deed of Transfer evidencing the transactions from the Spouses Velayo to Pacific Rehouse Corporation and eventually to the respondent.
Various tax declarations issued in the names of the successive owners.

The original Complaint for Quieting of Title was filed before the Regional Trial Court (RTC), Branch 54, Lapu-Lapu City (Civil Case No. 4824-L).
On 16 April 2002, the RTC dismissed petitioners’ claim on the grounds of lack of documentary evidence concerning filiation, inconsistencies in testimonies, and prescription.
The petitioners appealed the RTC decision, but in a subsequent decision on 1 July 2005, the Court of Appeals affirmed the dismissal by emphasizing:

Petitioners failed to prove their status as rightful heirs.
The chain of transfers resulted in an innocent purchaser in the respondent, who relied on the certificate of title.

Whether the document executed by Maxima Ochea, who was not proven to be an heir of Julian and Pedro Tiro, was effective in cancelling the original OCT No. RO-1121.
Whether this purported fraud in the initial transfer rendered all subsequent transfers, including that to the respondent, invalid.

Whether the respondent qualifies as an innocent purchaser for value, having acquired the property without notice of any defect in title.
Whether registration under the Torrens system, which confirms the existing title, protects the respondent despite the allegedly fraudulent origins of the earlier transaction.

Whether petitioners’ claims are time-barred given the long lapse (over 27 years) since the cancellation of the original title and the subsequent transactions.
Whether the failure of the decedents to contest the cancellation during their lifetime precludes any remedial relief now sought by the petitioners.