G.R. No. 120827 - Life Homes Realty Corporation vs. Court of Appeals

Life Homes Realty Corporation, the petitioner, is the registered owner of two parcels of land located in Barrio Ampid, San Mateo, Rizal, covered by Transfer Certificate of Title (TCT) No. N-28603 (Plan Psu-52080) and TCT No. 31730 (Plan Psu-52085).
Private respondent Marvi Development, Inc. owns an adjacent parcel of land to the south and southwest, covered by TCT No. 309740 (Plan Psu-52084).
Both properties had been subdivided into lots for residential or subdivision purposes, setting the stage for boundary disputes.

In 1979, petitioner discovered that the southern and southwestern portions of its properties were allegedly encroached upon, developed, and occupied by Marvi for subdivision purposes.
The alleged encroachment was estimated to cover a total area of 10,365 square meters.
The parties agreed to have an independent relocation survey conducted by a Government Geodetic Engineer to settle their conflicting boundary claims.
Marvi Development consented to the proposal, agreeing in its letter dated April 10, 1981, to share the costs and abide by the survey’s results.

On May 11, 1981, the parties jointly requested the Director of the Bureau of Lands, Manila, to conduct a relocation survey of the disputed properties.
Engr. Felipe R. Venezuela, Chief of the Technical Services of the Bureau, conducted the survey and submitted his report on April 28, 1983.
The Venezuela report detailed several findings:

It compared the relocation surveys made by Engr. Isabelo MuAoz (hired by Marvi) and Engr. Regino Natividad (for petitioner).
It noted that during the cadastral survey of San Mateo, certain plans (notably Plan Psu-177242 related to the titled property) were found defective and subsequently amended without judicial sanction.
The report recommended that the relocation survey executed by Engr. Natividad be followed and advised re-relocating Plan Psu-52084 using specific corners of Plans Psu-52080 and Psu-52085 as reference points.

After the issuance of the Venezuela report, petitioner demanded that Marvi vacate the purportedly encroached area.
On July 11, 1984, Life Homes Realty Corporation filed a complaint before the Regional Trial Court (RTC) of San Mateo, Rizal, Branch 76, for recovery of possession and damages.
In its complaint, petitioner sought:

A directive for Marvi to reset its boundaries in accordance with the findings of the relocation survey.
A mandate for the respondent to vacate the encroached area and to shoulder the expenses related to the survey, attorney’s fees, and litigation costs.

It was petitioner’s land that overlapped private respondent’s property.
The agreement to be bound by the results of an independent survey was void and that petitioner’s later survey disregarded the earlier survey of Marvi’s property.
The erection of a steep boundary had caused economic loss due to buyer reticence, claiming unrealized profits and requesting additional damages and refunds.

On May 21, 1992, the RTC dismissed both the complaint and the counterclaim on the ground of lack of basis:

The RTC emphasized that the Venezuela report, which was central to the case, contained findings of an unauthorized amendment in the technical description of a titled property.
The amendments were made without proper court order or notice, and hence, the report was deemed void and merely recommendatory.

Both petitioner and respondent appealed the RTC’s decision to the Court of Appeals (CA).

The CA reiterated that the ordinary civil action for recovery of possession was not the proper remedy, particularly since the defects in survey plans should instead be corrected through a petition under Sec. 112 of Act 496 (now Sec. 108 of Presidential Decree No. 1529).

On August 8, 1995, petitioner filed a petition for review on certiorari challenging the CA’s decision.
Petitioner’s primary contentions were:

The CA erred in holding that the Venezuela report was non-binding on the parties.
The CA mistakenly treated the recommended re-relocation survey as an impermissible alteration of a title, which should have required filing a petition for correction in the original registration case.

The CA’s rationale rested on the absence of any express agreement making the verification survey’s findings final and on procedural deficiencies—namely, that the report was never approved by the relevant Bureau of Lands authority.

Whether the Venezuela report, which was prepared following an agreement by the parties to resolve boundary disputes, is binding upon the parties.

The petitioner contended that the parties’ agreement to submit to an independent survey should render the Venezuela report conclusive.
The respondent argued that the report was merely recommendatory, and objections raised before its issuance negated its binding effect.

Whether the recommended re-relocation survey constitutes an impermissible alteration or amendment of a certificate of title requiring a petition in the original registration case, rather than being determined in an ordinary civil action for recovery of possession.

Petitioner argued that the re-relocation survey did not amount to an alteration of the title but was a necessary measure to correctly plot boundaries on the ground.
The CA held that any alteration, especially one involving an amendment made without judicial sanction, must be corrected via the appropriate petition under Sec. 108 of P.D. No. 1529 in the original case.